After IPO, gig-work fintech eyes expansion

A Toronto fintech offering bank accounts that get gig workers paid faster plans to use the money from its “massively oversubscribed” initial public offering to fund ambitious expansion plans, with one pilot already underway.

“It's not just large workforces that represent the gig economy we would target,” said Marco Margiotta, chief executive at Payfare Inc., in an interview with The Logic. “There's other areas of opportunity where our same business model can be applied.”

Payfare's clients include gig-economy companies like Uber and DoorDash. It provides their workforce with a payment card, digital bank account through which they can get paid faster than they can through other banks or third-party services. It also offers rewards, such as cash back on delivery drivers' gas purchases.

The company's shares started trading on the TSX last month after it completed a $65-million IPO, with common shares priced at the top of its initially expected range. Last week, Payfare announced its total gross proceeds rose to more than $75 million after its underwriters exercised their over-allotment option in full. While its share price has dipped briefly below the $6 mark, it has been on an upward trajectory in recent weeks, trading at $7.60 on Friday afternoon.

Payfare went public amid a tech-stock frenzy that saw several other Canadian companies, including MindBeacon and Telus International in late 2020 and early 2021, respectively, list with upsized offerings. The market has since cooled.

Margiotta said Payfare's already looking at offering its services throughout the United Kingdom and other parts of Europe, then Australia and parts of Latin America. Those expansions would be with both existing and new clients, he said.

The company's ambition stretches into other services and even beyond the gig economy. In early marketing filings, Payfare suggested it could provide its services to companies as diverse as pet-services booking platform Rover, car-sharing company Turo, home-rental giant Airbnb and grocery-delivery company Instacart. It highlighted truckers, social media influencers and e-commerce merchants as potential new sources of growth. Recent additions to Payfare's board may hint at its future, as well. In late March, it announced three new directors, including the CTO of Booking.com and the co-founder of a last-mile logistics company.

Payfare started a trial run about a month ago to see how independent truckers could use its platform, said Margiotta. It partnered with an undisclosed Dallas-based company; about 100 users are testing a version of the service.