Fintech company Payactiv, valued at more than $500 million in 2020, is looking for a minority investor

Payactiv, a leader in Earned Wage Access, or EWA, movementis exploring selling a minority stake in the company, four venture capital and banking executives told Fortune.

Payactiv has appointed Moelis to manage the trial, which targets private equity firms, the sources said. It’s unclear how much Payactiv might raise, but the company will likely use those funds to expand its product mix and build a better digital portfolio, an executive added.

Payactiv is not for sale but is evaluating several opportunities as they are presented, the same executive said, adding that Payactiv’s process to sell that minority stake is more than halfway there.

EWA has emerged as a rapidly growing segment in fintech. Companies in the space provide technology that allows employees, usually hourly workers, to access wages earned before scheduled paydays. EWA technology has been used by companies such as Walmart, Amazon and McDonald’s.

Founded in 2012 by current CEO Safwan Shah, San Jose-based Payactiv is one of EWA’s pioneering companies, with more than 5,000 companies having used its technology. It employs around 80 people and is profitable as a certified company Company Band how to public benefit agency. According to the data, the fintech has raised around $134 million in funding Crunchbase, with investors including Eldridge Industries, Generation Partners and SoftBank Capital. Payactiv was valued at over $500 million in 2020 after a $100 million funding round, Bloomberg reported.

Payactiv, together with DailyPay, remains one of the largest players in the industry. New York-based DailyPay has raised $1.2 billion in funding, according to Crunchbase. In January, DailyPay lifted up $175 million in debt and equity, resulting in a valuation of $1.75 billion on a pre-money basis.

DailyPay has also been the subject of takeover interest. In May 2022, Chime offered to buy it for $1.6 billion and then raised the offer to $2 billion, Fortune reported. DailyPay investors rejected the proposal hoping for a higher offer.
DailyPay, second Axiosis aiming for an IPO in 2025.

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