Fintech firm Payactiv—valued at over $500 million in 2020—is seeking a minority investor

Payactiv, a leading firm in the earned wage access, or EWA, movement, is exploring the sale of a minority stake in the company, four venture and banking executives told Fortune.

Payactiv has tapped Moelis to run the process, which is targeting private equity firms, the people said. It’s unclear how much Payactiv could raise, but the firm likely would use those funds to expand its product mix and build a better digital wallet, one exec added.

Payactiv is not up for sale but is evaluating different opportunities as they’re presented, said the same exec, who added that Payactiv’s process to sell that minority stake is more than halfway done.

EWA has emerged as a rapidly growing segment in fintech. Companies in the space provide technology that allow employees, usually hourly workers, to access earned wages before their scheduled paydays. EWA tech has been used by companies like Walmart, Amazon and McDonalds.

Founded in 2012 by current CEO Safwan Shah, San Jose-based Payactiv is one of EWA’s pioneering firms, with more than 5,000 businesses having used its technology. It employs about 80 people and is profitable as a certified B corporation, and as a public benefit company. The fintech has raised about $134 million in funding, according to 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, along with DailyPay, remains one of the biggest players in the space. DailyPay, of New York, has raised $1.2 billion in funding, according to Crunchbase. In January, DailyPay raised $175 million in debt and equity, snagging a $1.75 billion valuation on a pre-money basis.

DailyPay has also been subject to takeover interest. In May 2022, Chime offered to buy it for $1.6 billion and then bumped that bid to $2 billion, Fortune reported. DailyPay’s investors rejected the proposal hoping for a higher offer.
DailyPay, according to Axios, is eying an IPO in 2025.

This story was originally featured on Fortune.com