Silicon Valley FinTech startup Step has raised $50 million in a Series B funding round, the company announced Wednesday (Dec. 2). The funding round was led by new investor Coatue Management, a slew of celebrity backers and Big Tech executives. Founded in 2018 and launched in October, the all-in-one banking app has a half-million users and is geared toward teenagers and young adults to help them gain financial independence.
Additional new investors included celebrities like Justin Timberlake, The Chainsmokers, Eli Manning, Charli D’Amelio, Kelvin Beachum, Larry Fitzgerald and Andre Iguodala. Participating tech investors included executives from Facebook, Square, Venmo, Visa and others. To date, Step has raised more than $75 million from investors, including $22.5 million in a June Series A funding round led by Stripe. Stripe invested in this round as well, as did returning investors Crosslink Capital, Collaborative Fund and Will Smith’s Dreamers VC.
“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,” Step Founder and CEO CJ MacDonald said in the press release announcing the funding.
Step customers get a bank account that is insured by the FDIC, as well as a secured spending card backed by Visa and the P2P payments platform. Users can transfer funds in real time without any fees.
“Gen Z is a very passionate and engaged group and they also have an estimated spending power of $75 billion,” said Michael Gilroy, general partner at Coatue.
Dancer, TikTok influencer and investor Charli D’Amelio is aiming to partner with Step to promote financial literacy and money management to her 100 million-plus followers.
“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,” said D’Amelio.
Will Smith, Dreamers VC co-founder, said he knows firsthand the importance of financial literacy since he himself “hasn’t always had financial stability, and made many mistakes.”
Americans aren’t known for being financially savvy, as evidenced by a recent six-question quiz by GoBankingRates. Just 3 percent of respondents passed. Experts have said that introducing financial literacy to people at a younger age will help since many were never taught at all.
Teens have long been drivers of commerce and the 86 million born between 1997 and 2016 influence some $600 billion of spending by families.