As digital banks compete for teen consumers, Copper Banking raises $9 million in investment. The TechCrunch

Facebook
Twitter

Copper Banking , a teen-focused digital banking service, revealed today that it has secured $13.3 million in early funding.

An affiliate of Pioneer Square Labs called PSL Ventures oversaw the raising of $4.3 million last year and an additional $9 million this year for Seattle-based Copper. Clocktower Ventures, Index Ventures Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Fiat Ventures, and Arnold Ventures are a few additional investors in the fintech business.

Eddie Behringer, the co-founder and CEO of Copper Banking, thinks the firm has a few competitive advantages.

One example is Snap! Raise, a youth-focused crowdfunding site that has collected more than $90 million in venture capital, which Behringer and CFO Stefan Berglund previously co-founded. The duo credits strong grassroots contacts at the high school level for Snap! Raises’ success. They are replicating that strategy to fuel Copper’s expansion.

In our previous company, we worked with millions of parents and teenagers, Behringer told TechCrunch. That playbook is a major factor in the rapid and tremendous development we have experienced. We’ve already collaborated at the community level using this approach. That is something that modern technological models frequently ignore.

Additionally, Copper Banking has added financial education to its menu of services so that teenagers can not only spend money but also manage it more effectively. For instance, the business claims that financial advice integrated within the app is meant to assist kids in learning the crucial financial lessons they’ll need throughout their lives.

Teens’ capacity to communicate their desires to Copper, which we then translate into savings objectives that genuinely teach them, is one excellent illustration of that, according to Behringer.

Copper’s approach appears to be effective thus far. Over 350,000 people are using the two-year-old startup’s platform as of this writing. Since its introduction, Copper has experienced growth of over 70% month over month, and according to Behringer, 70% of users are brought to the platform through natural word-of-mouth. According to the corporation, the typical Copper customer is 15 years old and frequently recommends a friend in addition to their own siblings.

Copper Banking uses a network of young ambassadors to spread the word about the platform through clubs, sports teams, and schools in a manner similar to Snap! Raises. Less fees are as a result, says Behringer, for its teen clients. Additionally, Copper claims that the strategy has produced customer acquisition expenses that are far lower than those of traditional banks.

Behringer told TechCrunch that as Snap! Raise grew, it became clear that not much had been done to get this generation ready for financial success. One of the first things we observed was how low the bar had been set for pre-18 banking by banks.

An FDIC-backed digital bank account offered by Copper Banking is connected to 50,000 ATMs. Additionally, teens receive a customized Copper debit card, choices for P2P payments, direct deposit, and automated savings. In order to automatically pay a teen salary allowance, parents must register their teens for accounts and attach link their traditional bank accounts to Copper Banking cards. They also get notifications and intelligent controls over their spending habits.

Copper Banking, Img.
For divorced parents with separate homes, Copper provides co-parent functionality.

The company intends to use its additional funding primarily to concentrate on its go-to-market strategy while also continuing to build its banking infrastructure and offerings. Naturally, it is also hiring across a number of divisions, including engineering, compliance, marketing, sales, and operations. Currently, Copper employs roughly 25 people.

The management team at Copper has vast expertise growing early-stage firms, according to Geoff Entress, managing director and co-founder of lead investor PSL Ventures, and it truly shows in their analytics.

It speaks to Copper’s great resonance with clients that their adoption, conversion to funded accounts, and recommendation metrics outperform most DTC metrics you see, he stated in an email. Those are the signals you want to see as an investor. We think Copper Banking is in the best possible position to guide the next generation of Americans toward improved financial health.

Neobanks find the teen market to be very alluring, but teens don’t want one forced upon them by their parents, according to Ben Savage, partner at Clocktower Ventures.

He claimed in a written statement that Copper had the brand, the product, and the go-to-market strategy to fill that gap.
The fact that Copper is a digital bank is emphasized. The banking services are provided by Evolve Bank and Trust.
Even though the startup focuses on teens, anyone over the age of six who has a phone can open an account.

The market for banking services geared toward young people is becoming more and more crowded. In a Series D investment round in April, Step, which also focuses on teens, closed on a $100 million Series C round of funding , while Greenlight, a fintech startup that pitches parents on kid-friendly bank accounts, closed on raised $260 million . This raised the valuation of Step to $2.3 billion, virtually doubling it.

Facebook
Twitter

Related topics:

you may like

Leave a Reply

Your email address will not be published.