Fintech startup Step raises $22.5 million Series A led by Stripe to disrupt banking for teens
Step, a fintech startup built for families and teens, 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 other backers 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.
Founded last year by financial industry veterans CJ MacDonald and Alexey Kalinichenko, Step is the next generation financial services company building the best banking experience to help teens and young adults achieve financial independence and knowledge at an earlier age. Step was founded 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.
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.