Gig economy, independent contractor workers can face challenges when it comes to pay — many are underbanked or do not use a bank at all. On the flip side, talent platform companies and others that work to match 1099 workers with clients can also face obstacles when it comes to paying workers.
Enter Gig Wage, a Dallas-based company that aims to enable 1099 workers to get paid more quickly and flexibly.
“Our big vision is to bank the gig economy,” Gig Wage founder and CEO Craig J. Lewis says.
Gig Wage handles payroll and payments for a range of online talent platforms. The types of workers that go through its system also run the gamut from graphic designers to delivery drivers and more.
In January, Gig Wage announced a $2.5 million funding round, which followed a $7.5 million Series A round in October. The most recent investment was led by Jaclyn Hester of Foundry Group, an investment firm based in Boulder, Colorado.
Hester wrote in a blog post that 1099 workers have different needs than traditional workers, often needing to be paid sooner than the traditional bi-monthly paycheck, and many do not have a bank account.
“Gig Wage offers modern payroll, payments and banking to companies and contractors,” Hester wrote. “Their payroll product enables business to seamlessly and instantly pay contract workers, while offering optionality around payment timing that serves as a mechanism for contractor retention in a very competitive market.”
The company launched in 2014 as a payroll company but pivoted to the gig economy 1099 space in 2017.
Gig Wage combines all aspects of paying 1099 workers — it operates as a B2B2C, offering a comprehensive solution for payments.
For example, it has been difficult in the past for some gig economy 1099 workers to rent an apartment, get a student loan or buy a car on credit. Such things often require a proof of income report. Part of Gig Wage’s solution is to offer 1099 workers access to proof of income.
The company also has plans with Green Dot to launch a debit card for 1099 workers later this year for underbanked and unbanked workers. Green Dot is also an investor in the company.
Client companies that use its services receive a free bank account as part of the deal.
Payment for Gig Wages’ services can be handled in several ways. The client company can pay outright, it can elect to split the fees between it and 1099 workers or there is a worker-paid model.
Looking to the future, Gig Wage is also working on a partnership with Mass Mutual and plans on growth. Gig Wage operates in all 50 states and plans to focus on the US for the next 24 months. However, the company is also getting a lot of interest about offering its services internationally.
It’s definitely a growing market. Talent platforms — both B2C such as Uber and B2B firms — appear set for continued growth. Total talent platform spend rose 42% in 2019, according to the most recent numbers from SIA. Although 2020 was a tough year for everyone, some talent platform segments are continuing to see growth despite the pandemic.