Step, a digital bank for teenagers, named several celebrities and executives from major companies as investors in its latest round of funding.
On Wednesday, the San Francisco company announced a $50 million series B round of funding, led by the investment advisory Coatue Management with participation from returning investors Stripe, Crosslink Capital, Collaborative Fund and the singer and actor Will Smith’s Dreamers VC. New investors include the dancer and social media personality Charli D’Amelio, the singer Justin Timberlake, the musical duo The Chainsmokers, former NFL quarterback Eli Manning and executives from Facebook, Square and Visa.
D’Amelio, a teenager herself, has also partnered with Step to promote its app to her millions of social media followers. In a recent Instagram post, for example, she posed with her new debit card and encouraged others to choose their own card color.
Step launched to the public in September and has more than 500,000 users. Its no-fee account and app is meant for teens, but those under 18 will need a parent to “sponsor” and oversee the account. Step offers peer-to-peer payments, reminds users of their balances when they make a transaction and lets users build their credit through what Step calls a secured spending card. This card behaves like a debit card by only allowing users to spend what they have deposited in their accounts, but like a credit card in that they can choose to have their positive repayment behavior reported to the credit bureaus. Deposits are held by the $647 million-asset Evolve Bank & Trust in West Memphis, Ark.
"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 Smith, a co-founder of 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.”
The company has raised more than $75 million from investors to date.
“We founded Step to help improve the financial future of the next generation,” CJ MacDonald, founder and CEO of Step, said in a press release. “This investment will help us continue to innovate and grow with our users.”
Step is one of
