Rain, a Los Angeles-based fintech startup, has secured $75 million in an all-equity Series B funding round, led by Prosus, at a post-money valuation of $340 million. The new investment will be used to expand Rain's product offerings, including the addition of credit card and savings products, and further develop its financial wellness features.

Rain's employer-integrated earned wage access (EWA) app allows employees to access a portion of their earned wages before payday, with a small fee. This service is particularly useful for the 35% of US households living paycheck to paycheck, according to a Bank of America report. Rain's approach differentiates itself from other EWA platforms by automating the onboarding process for employers, making it easy to integrate with existing payroll and timekeeping systems.

The startup has already onboarded over 2.5 million employees and distributed over $2 billion in earned wages. Rain targets mid-market and enterprise customers with over 300 employees, charging a fee equivalent to an ATM fee for instant transactions, while also offering a free ACH option. The app also provides financial education, one-on-one coaching, and free tax filing and refund services, which account for 70% of its monthly adoption rate.

Rain's CEO, Alex Bradford, stated that the startup's goal is to help employees reduce their reliance on EWA by promoting savings and financial wellness. The company plans to launch an EWA-secured credit card with a dynamic credit limit based on verified earned wages in Q3, as well as a product that makes it easier for employees to use their Health Savings Account (HSA) later this year. Savings accounts with auto-save and rewards features are also in the pipeline.

The funding comes amid a mixed environment in the fintech ecosystem, with venture funding in global fintech companies declining 45% year-over-year to $50 billion in 2023, according to PitchBook data. However, the average deal size has increased 20% year-over-year, and venture funding in the EWA space grew 19% year-over-year to $569 million last year. Rain's approach, which focuses on employer-integrated EWA and financial wellness, helps it stand out in a crowded market.

Rain's funding will also be used to scale its go-to-market efforts, including building a sales team, investing in sales enablement and marketing, and forming channel partnerships. The startup plans to invest more in tooling to add convenience for employers managing their services. With 175 employees, Rain is poised to continue its growth and expansion in the fintech space.

In 2023, Rain raised a $116 million Series A funding round, comprising $66 million equity and $50 million in debt. The latest funding round saw participation from Nextalia Ventures, Spark Growth Ventures, and Rain's existing investors, including QED, Invus Opportunities, and others.

As Rain continues to expand its product offerings and user base, it is clear that the startup is committed to its mission of helping millions of people achieve financial freedom. With its employer-integrated approach and focus on financial wellness, Rain is well-positioned to make a significant impact in the fintech space.