Step Raises $100 Million In Series C Funding

Step, a teen-focused US banking service, has raised $100 million in a Series C funding round led by General Catalyst, and payment platform Stripe. Other investors include celebrities Will Smith, Jared Leto, Stephen Curry, Franklin Templeton, and the Chainsmokers' Mantis VC.

Founded in 2018 by Alexey Kalinichenko and CJ MacDonald, Step is a teen banking service that focuses on getting young adults to achieve financial independence and literacy. The company’s mission is to be the first point in exposure to the financial world for young people, by creating tools that make users more money-conscious. 

According to a review of the app, it is a free teen account that includes a secured-spending Visa card that combines the features of a debit and credit card. It helps teens build credit while restricting them to only spend the funds in their accounts. Step cards can be used anywhere Visa is accepted, and adults can use the Step app to fund and monitor their teen’s account. However, there’s no ATM access or mobile check deposits.

This funding comes after the company's Series B funding round, which raised $50 million, and was led by investors Coatue, and Stripe. In 2019, the company announced a round of $22.5 million led by Stripe.

In an interview with TechCrunch, CJ MacDonald, Step's CEO, disclosed that the company had registered over 1.5 million accounts on its platform, and continue to sign over 10,000 accounts daily. 

According to him, "There’s just a lot of things that we want to do to bring this to millions and millions of households to help educate the next generation to be smarter with money. Honestly, we don’t need the capital. It’s just we think speed to market is really key and we think we can accelerate our growth and invest in infrastructure.”

A large part of the company's popularity is due to its onboarding of Charlie D'Amelio, a teenage TikTok star who has been promoting the service to her followers of over 100 million.

The new funding will reportedly be used to build new products and features that will help teenagers save and budget to make new hires.