Step, the new modern-day financial services company built for teens and families, today announced a $100 million Series C round of funding. The round was led by General Catalyst, with participation from returning investors Coatue, Stripe, Charli D’Amelio, The Chainsmokers, Will Smith and Jeffrey Katzenberg. Step also welcomed 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.
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These investors join a prominent group that includes the likes of 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 continues to deliver explosive growth, adding 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.”
With this new round of funding, Step plans to accelerate investment in product infrastructure, building innovative products and features that help teens budget and save in a more intuitive way. The company will also be hiring for a number of key roles as it looks to continue closing the financial literacy gap and empower the next generation to be smarter with their money.
Step was founded by financial industry veterans CJ MacDonald and Alexey Kalinichenko to provide teens and their families with financial tools for today’s modern-day banking needs and to promote financial literacy for the future. The founding team has 50+ years in combined financial technology experience from companies like First Data, Google, Gyft and Square. Step is backed by Coatue, Collaborative Fund, Crosslink Capital, General Catalyst and Stripe. Step’s financial products are powered by its bank partner Evolve Bank & Trust, Member FDIC and insured up to $250,000. To learn more, please visit: www.step.com.
About General Catalyst
General Catalyst is a venture capital firm that invests in powerful, positive change that endures –– for our entrepreneurs, our investors, our people and society. We support founders with a long-term view who challenge the status quo, partnering with them from seed to growth stage and beyond to build companies that withstand the test of time. With offices in San Francisco, Palo Alto, New York City and Boston, the firm has helped support the growth of businesses such as: Airbnb, Deliveroo, Guild, Gusto, Hubspot, Illumio, Lemonade, Livongo, Oscar, Snap, Stripe and Warby Parker. For more: www.generalcatalyst.com.