SAN FRANCISCO — Step, a banking service built for teens and families, has raised a $100 million Series C round of funding from major investment firms to celebrities. The round was led by General Catalyst, with participation from returning investors Coatue, Stripe, Charli D’Amelio, The Chainsmokers, Will Smith and former Quibi chairman Jeffrey Katzenberg. Step also welcomed actor Jared Leto and Franklin Templeton to the round and formally announced NBA All-Star Stephen Curry as an investor, who has supported the company from the early days.
These investors join a group that includes Golden State Warriors’ star Stephen Curry, Alex Rodriguez, Justin Timberlake, Josh Richards and former Square executives Sarah Friar, Jacqueline Reses and Gokul Rajaram. To date, Step has raised more than $175 million from investors and says it has added over one million new users since its $50 million round in December 2020.
“Our mission is to help improve the financial futures of the next generation and we’re thrilled to have such a massive vote of confidence from investors, especially during Financial Literacy Month,” said CJ MacDonald, Founder and CEO at Step. “Thirty-eight percent of teens say they lack the financial resources needed to achieve financial independence and this is a problem Step is well positioned to help solve as we educate millions of households every day.”
In less than six months, the company has amassed more than 1.5 million users, 88% of whom say Step is their first bank account. As the ultimate financial utility, Step’s app provides users with access to a free, FDIC insured bank account, secured spending card and a P2P payments platform allowing them to send and receive money instantly. Additionally, Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
“Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right,” said Kyle Doherty, Managing Director at General Catalyst, who will also join Step’s board. “The team has built the elusive offering that teens want and families need, which has been validated by their incredible growth and market momentum.”
A recent Step survey revealed that 97% of teens think financial literacy is important but have largely turned their backs on traditional banks after being repeatedly underestimated and overlooked by these institutions. Instead, Gen Z is prioritizing fintechs, and say they’re looking for a financial partner that is trustworthy (34%), built for teens (26%) and fee-free (24%).
“For too long, conversations about money –– specifically how to manage it –– have been avoided despite what a critical role they play in shaping the future of the next generation,” said Jared Leto, legendary actor, musician and serial tech investor. “Over twenty years ago, I set out to tackle this problem by starting a company in the space, so I’m excited to see Step addressing the financial literacy crisis head on with game-changing technology built to help young people learn about money in their digitally native environments.”
While Step has made great strides in helping to educate the next generation to be smarter with their money, they’ve also helped normalize conversations about personal finances among families. The company regularly publishes content on its website to arm parents with the tools they need to tackle these important discussions. Parents point to Step’s fee-free model and commitment to financial education as some of their favorite benefits of using the app.
“As a parent of three young kids, I know what a critical life skill money management is but it’s hard to know when and how to start talking to them about finances,” said 2x NBA MVP and early Step investor, Stephen Curry. “Step helps facilitate conversations about money and makes it easy for parents to give their kids a taste of financial freedom with a built-in safety net and lots of teachable moments.”
Step’s financial products are powered by its bank partner Evolve Bank & Trust, Member FDIC and insured up to $250,000.