Historically speaking, we haven’t thought too much about the financial habits of people under the age of 18, because kids aren’t legally allowed to be part of the financial system. A minor can open a bank account with their parent as a co-owner, but like voting, smoking and serving in the miliary, they must be 18 to be an independent participant in the financial system.
Until very recently, financial services for those younger than 18 was limited to co-opening that checking account with Mom or Dad at the local credit union or bank — and most kids would just use an empty coffee can or jar to store their unspent allowance. But the market is clearly changing, as the youth-focused financial services app Greenlight announced this week that it has captured $260 million in Series D funding, nearly doubling its valuation to $2.3 billion.
Though best known for offering debit cards for kids, Greenlight’s ambition is to provide an all-in-one money management platform for minors, via a suite of financial services for earning, saving, spending, giving and investing. The debit card is just part of the offering, along with a companion app and educational resources designed to teach financial management skills to young consumers. To date, Greenlight serves three million families, helping them collectively save more than $120 million so far.
“Greenlight has quickly emerged as the leader of the family finance category,” said Andreessen Horowitz General Partner David George, who will join Greenlight’s board of directors. “Greenlight was built to help parents raise financially smart kids, and with its breakthrough combination of easy-to-use money management tools and educational resources, the company is well-positioned to become one of the most loved and trusted brands for families around the world.”
It’s an offer that is clearly showing strong appeal. At the time of its last funding round in September of last year, Greenlight claimed two million parents and kids having saved $50 million. Overall, Greenlight says it has “more than tripled” its revenue, more than doubled the number of parents and kids on its platform, and doubled the size of its team within the past year.
“Our vision at Greenlight is to create a world where every child grows up to be financially healthy and happy,” said Tim Sheehan, co-founder and CEO of Greenlight.
Greenlight is not alone in that mission, as the idea of locking up the next generation of consumers’ financial services preferences is catching on with a proliferating number of startups. Kard, Step, Till Financial and Current are all pitching businesses similar to Greenlight’s.
And those businesses are also raising money and stoking interest. Step, a teen-focused U.S. mobile banking startup, has captured $100 million in a Series C funding round led by General Catalyst, and has brought in a lot of high-profile interest from the likes of Stripe, actor Will Smith, actor Jared Leto and the NBA’s Stephen Curry. According to Step, the new funds will help it meet the needs of the now 1.5 million customers that have signed on for its mobile-based, interest-bearing bank account with Evolve Bank, which is specifically designed for teens and has no overdraft fees. Like Greenlight, Step advertises its apps as offering educational resources to help teenagers learn smart money habits and build positive credit, while also giving parents visibility into their kids’ spending.
“As a parent of three young kids, I know what a critical life skill money management is, but it’s hard to know when and how to start talking to them about finances,” Stephen Curry noted. “Step helps facilitate conversations about money and makes it easy for parents to give their kids a taste of…