Teen banking app Step raises $50 mn in Series B funding

By Pavithra R

Step, improving the financial future of the next generation has a $50 million Series B round of funding. The investment round was led by Coatue, with participation from returning investors Stripe, Crosslink Capital, Collaborative Fund and Will Smith’s Dreamers VC. 

The FinTech has added several new investors including Charli D’Amelio, Justin Timberlake, The Chainsmokers, Eli Manning, Kelvin Beachum, Larry Fitzgerald and Andre Iguodala alongside prominent FinTech executives from the likes of Facebook, Square, Venmo, Visa and others. To date, Step has raised more than $75 M from investors.

“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,” said CJ MacDonald, Founder and CEO at Step.

Step, which announced its official launch two months ago, has seen tremendous growth with over 500,000 users on the platform. The firm offers users a free, FDIC insured bank account, secured spending card backed by Visa and P2P payments platform so teens can send and receive money instantly. Unlike its competitors, the FinTech does not charge fees of any kind and enables teens to start building credit earlier by simply using their Step Card.

“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,” said Step partner Charli D’Amelio’s.

The company is planning to use the investment to accelerate its growth and continue to expand the team, which has doubled in size since the start of the pandemic. The company will also be welcoming Michael Gilroy of Coatue to its board.

“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,” said Michael Gilroy, General Partner at Coatue.