- Step — a modern financial services company built for teens and families — announced it has raised $50 million in Series B funding. These are the details.
Step — a modern financial services company built for teens and families — announced it has raised $50 million in Series B funding. This round of funding was led by Coatue with participation from returning investors Stripe, Crosslink Capital, Collaborative Fund and Will Smith’s Dreamers VC. Step also added several new investors such as Charli D’Amelio, Justin Timberlake, The Chainsmokers, Eli Manning, Kelvin Beachum, Larry Fitzgerald, and Andre Iguodala alongside prominent fintech executives at Facebook, Square, Venmo, Visa and others. Including this funding round, Step has raised more than $75 million from investors.
Step — which launched two months ago — has seen rapid growth with over 500,000 users on the platform. Step offers users a free FDIC insured bank account, secured spending card backed by Visa, and a P2P payments platform so teens can send and receive money instantly. And unlike its competitors, Step does not charge fees of any kind and enables teens to start building credit earlier by simply using their Step Card.
With Step partner Charli D’Amelio’s recent investment, the renowned social media star is hoping to play a more active role in helping to close the financial literacy gap by working with Step to share important money management lessons with her dedicated following of more than 100 million people.
The company has already seen teens start to develop healthier financial habits, thus saving an average of 3 times what they spend. And users say their top motivations for using Step’s banking platform — in some cases breaking away from their families’ long-time bank — is because the company has no fees, helps teach financial literacy and makes it easy to track spending.
With this new round of funding, Step is planning to accelerate growth and will continue to expand the team — which has doubled in size since the start of the pandemic. The company also announced it is welcoming Michael Gilroy of Coatue to its board.
Step was launched by CJ MacDonald and Alexey Kalinichenko with the goal of providing teens and families with the financial tools for today’s modern-day banking needs in order to promote financial literacy for the future. The founding team has over 50 years in combined financial technology experience from companies from companies like Square, Google, Gyft, and First Data.
KEY QUOTES:
“Since Step’s launch, we’ve seen massive demand for this new type of all-in-one banking solution, making it much easier for teens to learn about money management. We founded Step to help improve the financial future of the next generation and this investment not only validates what we’ve built, but it will also help us continue to innovate and grow with our users.”
— CJ MacDonald, Founder and CEO at Step
“Gen Z is a very passionate and engaged group and they also have an estimated spending power of $75 billion. As this generation continues to mature, they’ve been vocal about the importance of establishing healthy financial habits—with many having lived through two recessions. We’ve invested in Step because we think their game-changing technology and grass-roots approach will help capture the next generation.”
— Michael B. Gilroy, General Partner at Coatue
“As a Step partner and customer, I’ve been able to see firsthand how easy Step makes it to manage your money while providing the educational resources that today’s teens need but have largely been unable to find—myself included. I’m excited to be able to use my platform to help close this gap and have made a direct investment in Step to help them develop even more useful products.”
— Charli D’Amelio, social media personality and TikTok star
“As a person who hasn’t always had financial stability, and made many mistakes in that arena as a young man, I know the importance of financial education and having access to economic platforms that can work for everyone. While I’ve tried to instill that same mentality in my own children it was hard to find a banking platform that was intuitive and met our needs as a family. We’ve reinvested in Step because not only are their products built specifically for teens but they’ve started an important conversation around financial literacy that kids are actually engaged in.”
— Will Smith, Co-Founder at Dreamers VC; Actor; Rapper
