Branch, a Minneapolis-based financial tech company, has secured $48 million from private investors and a $500 million line of credit to build its system that lets businesses pay workers more quickly.
The infusion of capital is a sign of investor excitement about the way Branch and companies like it are shortening the time in which people are paid for their work.
The new investment is a second, or Series B, capital round for Branch. It was led by the New York City-based investment firm Addition and included investments from Matchstick Ventures, which is run from Minneapolis and Boulder, Colo, and Great North Labs, based in Minneapolis. It brings Branch's outside investment total to roughly $60 million.
Meanwhile, the massive credit facility comes through funds managed by New York-based Neuberger Berman and will allow Branch to assist a far larger group of employers and employees.
Branch said the fresh capital will be used on development of the company's software, which will help them expedite payments and financial services to W-2 and 1099 workers, and in hiring more people.
Branch anticipates doubling payroll to as many as 200 employees over the next year, about half of them in Minnesota, CEO Atif Siddiqi said.
After noticing how the COVID-19 pandemic affected the gig economy, Branch is moving more into accelerating payments for contractors, Siddiqi said.
"One of the things we've seen, especially over the last year, is that market segment really growing as people have become their own independent business owners and operators," he said. "There's unique products and services we're looking at to really meet their needs. Things like providing them rewards on common business expenses and helping them with tax tracking, which is a big thing for these contractors."
