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.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Extends Rent Day Promotion for Black Friday and Beyond

In October, the unique Bilt Mastercard unveiled its inaugural Rent Day promotion, which included the opportunity for cardholders to earn double rewards and nearly all of their purchases on the first of the month. That deal returned in November alongside the addition of a United Airlines status match offer and more. Now, just in time for Black Friday, Small Business Saturday, and Cyber Monday, Bilt is extended December's Rent Day...

Venmo App Adds Charitable Giving Interface

Although Thanksgiving and retail holidays such as Black Friday, Small Business Saturday, and Cyber Monday may be on the minds of many people, a popular peer-to-peer payment app is looking ahead to Giving Tuesday. This week, Venmo announced the rollout of a new interface that will make it easier for users to discover and donate to various charities. The feature is now live in the latest version of the Venmo...

American Express Introduces New Credit Card Approval Process

For some consumers, applying for a new credit card can be anxiety-inducing as there's a chance that they could not only be declined for the product but also have their credit impacted by the credit inquiry. To give these applicants better peace of mind, American Express is rolling out a new approval process. Amex has announced a new pilot program for its U.S. Personal Cards (meaning non-business cards) that will allow...