FinTech Step Announces $50 Million Round with Celebrity Participants
As 2020 draws to a close, it seems that FinTech deals aren’t done just yet. Last week, the online banking platform Step announced it had raised $50 million. The Series B was led by Coatue with participation from Stripe, Crosslink Capital, Collaborative Fund, and Dreamers VC. Additionally, several celebrities have invested in the startup, including Charli D’Amelio, Justin Timberlake, Eli Manning, Larry Fitzgerald, and others. With the latest funds, Step has now raised a total of $75 million to date.
While digital bank accounts have become a major FinTech trend, Step does things a bit differently in that it’s geared towards teens and families. In addition to a free banking account, the platform also enables P2P payments and even allows its teen users to build credit by using their Step Card — a debit card meets secured credit card. To offer these banking services, Step currently partners with Evolve Bank & Trust, Member FDIC.
Since launching a mere two months ago, Step has already amassed more than half a million users. In addition to its digital banking services, the app also teaches financial literacy and spending tracking tools. According to the company, the average teen customer currently saves three times more than they spend on the platform.
In a statement announcing the funding round, Step founder and CEO CJ MacDonald said, “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.” Meanwhile, 16-year-old social media star and Step investor Charli D’Amelio said of the service, “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.”
Although celebrity investment doesn’t guarantee FinTech success by any means, it can certainly raise a startup’s profile. In the case of Step, having a famous partner who’s also in the key demographic for your brand is a double win. With that — not to mention an extra $50 million in reserve — Step seems well poised to breakout as new FinTech to watch throughout what’s left of 2020 and into the new year.