step, the youth digital banking service backed by TikTok star Charli D’Amelio, this morning announced the completion of a $ 100 million Series C financing round after going on just six months after launch 1.5 million users had grown. The new round, led by General Catalyst, comes shortly after Step’s $ 50 million Series B, announced late last year after the startup hit half a million users in just two months of launch.
The new round also includes the participation of the existing investors from Step, Coatue, Stripe, Charli D’Amelio, The Chainsmokers, Will Smith and Jeffrey Katzenberg. Newcomer Franklin Templeton signals that an investment plan is in sight. This includes the actor and musician Jared Leto. Step also officially announces NBA All-Star Stephen Curry as an investor, who was previously undisclosed, as well as former Square managers Sarah Friar, Jacqueline Reses and Gokul Rajaram.
As a result of the fundraiser, General Catalyst’s Kyle Doherty joins Step’s board of directors. To date, Step has raised over $ 175 million.
Credit: step
According to CEO CJ MacDonald, Step has not yet spent the money from its Series B, but believes the additional funds can help the startup grow faster.
“We opened more than one and a half million accounts in the first six months. We open more than 10,000 accounts a day and there are just a lot of things we want to do to make this possible for billions and billions of households so the next generation can be smarter with money, ”he says. At the time of Series B, for comparison, Step announced that around 7,000 to 10,000 accounts were being added per day.
“Frankly, we don’t need the capital,” added MacDonald. “We just think that getting to market is really crucial and we believe we can accelerate our growth and invest in infrastructure.”
The company is also planning to hire operations, engineering, product and design employees in order to double its 65-strong team over the next year.
Step today competes in a crowded market of mobile banking services aimed at a younger population. However, it is one of the few aimed at teenagers between the ages of 13 and 18. The Step app gives young people free of charge and secure access to an FDIC-insured bank account Visa card, which they can use to accumulate credit before the age of 18. The app also has Venmo-like features for sending money to friends.
Credit: step
Step’s growth to date has benefited from a combination of factors such as word of mouth, social media usage, and the popular referral program that paid out a few dollars per sign-up. Step has also leveraged its partnerships with social media influencers like D’Amelio and Josh Richards, as well as celebrities like Step investor Justin Timberlake.
The company believes Curry’s announcement can also help raise awareness about the banking app. When Curry, the father of three children, talks about introducing Step to his own children, people will notice.
While the additional funding is focused on driving growth, Step is also thinking about its future as its existing users get older. The company plans to enter the credit and credit market and introduce investments at a later date. The Franklin Templeton investment could come in handy here, MacDonald notes.
“Franklin [Templeton is] obviously one of the largest financial institutions in the world. And when we think about investing and the client’s journey to have a great brand like Franklin Templeton invested in this round, I think that is just a testament to where the world is going, ”he says.