Step Raises $22.5 Million Series A Led by Stripe to Disrupt Banking for Teens

Step partners with industry leaders Mastercard, Stripe and Evolve to
power first-of-its-kind, all-in-one banking solution for the next
generation

Waitlist demand exceeds 500,000 people in less than three months

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.

About Step:

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.

Contacts

Jody Kramer
[email protected]

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