SAN FRANCISCO — Step, a financial services company built for teens and families, has landed a $50 million Series B round of funding. The round was led by Coatue, with participation from returning investors Stripe, Crosslink Capital, Collaborative Fund and Will Smith’s Dreamers VC. Step also added several celebrity investors including Tik Tok star Charli D’Amelio, Justin Timberlake, The Chainsmokers, athletes 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 million 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,” said CJ MacDonald, Founder and CEO at Step. “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.”
Launched just two months ago, Step has seen tremendous growth with over 500,000 users on the platform. A first of its kind, Step 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. Additionally, 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.
“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. “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.”
Additionally, with Step partner Charli D’Amelio’s recent investment, the digital megastar 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.
“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 Charli D’Amelio. “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.”
The company has already seen teens start to develop healthier financial habits, saving an average of three times what they spend. Additionally, 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.
“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,” said Will Smith, Co-Founder at Dreamers VC. “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.”