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February 11, 2021

Innovation for informal workers in Europe

Meet the startups helping informal workers access their wages in real-time, build a credit history, and purchase affordable benefits

Mike Minett and Des Mathewman know the challenges faced by informal workers across Europe. “For over a decade, Des and I worked as freelancers in the insurance and financial services industries,” said Minett. “We know, firsthand, that the platforms available to independent workers are broken. After meeting Des by chance at a London pub, we set out to build a company that supports the more than 50% of the global workforce that are defined as informal workers.”

Minett and Mathewman are co-founders of Portabl, a UK-based startup designed to help informal workers like freelancers and gig-economy workers access ‘employee-like’ flexible insurance, benefits and financial packages at the click of a button. The need for products from companies like Portabl is palpable: to date, nearly 500+ customers sit on the companies waiting list.

Portabl is just one of dozens of tech-driven startups built in the past five years that are helping informal workers access their wages in real-time, build a credit history, and purchase affordable benefits. Each of these startups has a unique and creative approach to offering services that are traditionally provided by employers. 

In Europe, roughly 1 in 5 working age adults are working in the informal economy, which means they lack a formal contract or benefits like health care or pension coverage. Globally, a staggering 75% of gig workers are un- or under- insured. This enormous population has been particularly exposed during the coronavirus pandemic – without a safety net they struggle to pay for items such as workplace accident insurance, and without a contract they suffer from income volatility as their employer can change their conditions without penalty.

Traditional financial institutions have struggled to serve people working in the informal sector. Large banks make their money by selling financial products and lending money to consumers. As a result, they are not incentivized to help informal workers who traditionally have scattered financial histories and volatile incomes. This leaves millions of informal workers across Europe vulnerable, despite the fact that they are responsible for nearly 40% of the region’s GDP.

Insurers have also struggled to serve the informal workforce. Legacy policy pricing structures, long-term contracts with underwriters and internal bureaucracy have all made it difficult for traditional insurance providers to adapt and cater to the rapidly expanding informal workforce on the continent. Without tailored insurance, millions of informal workers across the continent are left vulnerable during crises like the pandemic.

Financial health-oriented startups are filling the gap. 

Iziwork and Trezeo are two notable names building products for gig economy workers. Iziwork is a Paris-based startup that offers a digital platform for temporary workers. Iziwork offers a 'worker centric' approach to attract, develop and retain the most reliable and competent workers. For client companies, this translates to recruitments that are not only more reliable, but also more responsive and more economical. 

Trezeo, a Dublin based startup, has developed a banking solution for gig-workers, recognising that the financial safety net created by employers in the industrial age no longer caters for these populations. As Garrett Cassidy, CEO and Co-Founder of Trezeo notes, “For a lot of people, independent work gives them more personal freedom, but this shouldn’t come at the expense of financial security, (..such as..) protecting earnings in the case of an accident, gaining the reassurance of speaking to a doctor at any time or having access to essential sickness cover.”

Informal work is at a crossroads in Europe: on the one hand, workers are essential to the economic growth and expansion of the region. On the other hand, they are not afforded the traditional benefits and security that come with full time work. In order to ensure both economic growth for the region and stability for workers who choose this path, startups with entrepreneurs who intimately know the problem will play an important role moving forward.

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