SAN FRANCISCO--(BUSINESS WIRE)--Step, the new modern-day financial services company built for families and teens, today announced that it has closed $22.5 Million in Series A funding for its all-in-one banking solution that integrates certain key features and benefits of checking, savings, credit and debit cards into one easy-to-use no fee account. The funding round was led by Stripe, with participation from Will Smith’s Dreamers fund, Nas, Wndrco, Ronnie Lott, Matt Rutler, Kevin Gould, Noah and Jonah Goodhart as well as existing investors Crosslink Capital, Collaborative Fund and Sesame Ventures. The investment comes as Step’s waitlist demand exceeds 500,000 people since its offering was announced just a few months ago.
Step has partnered with Mastercard, Stripe and Evolve to launch the all-in-one solution, and it wants to be a teen’s first spending card and first bank account. The Step card is co-branded with Mastercard, a globally trusted and universally accepted payment network that provides cardholders with the peace of mind of Zero Liability Protection against unauthorized purchases or charges. Step’s bank accounts are securely held and FDIC insured through their sponsor bank, Evolve Bank and Trust. Evolve Bank and Trust, established in 1925, also enables easy ATM access for Step card holders at thousands of locations with no fees. Stripe provides issuing and processing technology that will help Step empower teens to fully participate in the economy while teaching financial literacy firsthand.
“Teens and parents are ready for a seamless mobile banking experience, one meticulously designed for their needs,” said Step co-founder and CEO, CJ MacDonald. “We’ve partnered with the best in the business to create the right solutions for the next generation. As we move into a cashless era where digital content and transactions fuel our daily lives, the need for innovation in financial services increases. We want Gen Z to be more equipped and educated when it comes to money.”
“Today’s young people are digitally savvy, having grown up with technology as a mainstay in their day-to-day lives. As a result, we also need to ensure that they become familiar with the unique aspects of digital payments including providing education about the various finance and payment products available,” said Sherri Haymond, EVP Digital Partnerships, North America for Mastercard. “Step has taken a thoughtful approach to developing an offering for teens and families that provides that first step in educating and acclimating today’s youth to help them gain confidence and awareness around their finances.”
The Step card is linked to the Step mobile app which enables users to send and receive money instantly, shop online or in-store as well as leverage digital wallet platforms such as Apple Pay and Google Pay. The Step card is integrated with a fee-free, interest-bearing deposit account. Step customers are not required to have a minimum balance and are not charged any hidden or overdraft fees. The Step offering also allows parents oversight into their teen’s spending, providing the opportunity for them to set limits and guidelines as well as have a view into card use.
Additional Step benefits include:
- Deposits: Industry-leading interest on deposits at a current rate of 2.5% with round-up savings capabilities in an FDIC-insured account up to $250,000
- ATMs: Access to a network of 35,000 ATMs nationwide with no hidden fees or ATM fees
- Spending: Controlled spending limits, help building credit and fraud protection; Step offers Zero Liability Protection on all spending card purchases from unauthorized use with no overdraft fees
- Mobile: Real-time budgeting tools as well as transaction and balance tracking
- Parents: Ability to set limits and guidelines as well as visibility into spending
- Digital Cash: Send and receive money instantly on your phone; access it right away
“Stripe is committed to searching for new ways to remove barriers to commerce and broaden economic access to more people,” said Jordan Angelos, head of corporate development at Stripe, who is joining Step’s board. “Step will help teenagers responsibly participate in a financial system that’s moving online and teach money management skills through direct experience. We’re thrilled to support its efforts.”
With strong support and the addition of $22.5 million in funding, Step can accelerate its roadmap, add several new hires and respond to the strong demand for its services. The excitement for the Step card in particular is driven by the fact that people have become far less dependent on cash as they increasingly shop online, order services from their mobile devices or repay friends and family on the go. This shift has largely left teens behind because they have not had access to the types of solutions that are standard in today’s economy and there is nothing that exists in the market today specifically tailored for this demographic. Step effectively addresses the needs of the pre-banked population, which is comprised of approximately 75 million people under the age of 21 in the U.S.
“We knew from the first meeting with CJ that Step was creating something special and filling a real void in the market,” said Eric Chin, general partner at Crosslink Capital. “We expected this team to move forward at an impressive clip, but Step has exceeded our expectations. We have not seen such explosion from a consumer launch and are excited for millions of Americans to experience the product.”
Step recently began beta testing to friends and family, with widespread commercial availability occurring in the Fall. Access to the Step platform is determined by a first-come, first-served basis. In the meantime, parents and teens can sign up for early access to the Step waitlist and begin earning money prior to release by inviting friends. With each friend invited, you each get $1 in your account when the friend signs up. To learn more, please visit www.step.com or download the Step iOS or Android app.
Step was founded by financial industry veterans CJ MacDonald and Alexey Kalinichenko to provide teens and their families 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 Gyft, First Data, Square and Google. Step is backed by Stripe, Crosslink Capital, Collaborative Fund and Sesame Ventures. To learn more, please visit www.step.com.