The actor Will Smith has, through his Dreamers fund, made a significant investment in Step – a mobile app designed to educate teens on financial literacy. A banking service app, Step combines free basic banking facilities such as being able to receive and send money with tools designed to help build the financial literacy learning missing in the mainstream education syllabus.
As explained by Step CEO and co-founder CJ MacDonald in an interview with TechCrunch:
“Schools don’t teach kids about money. We want to be their first bank accounts with spending cards, but we also want to teach financial literacy and responsibility. Banks don’t tailor to this, and we want to be a solution for teaching the next generation of adults to be more responsible with money in the cashless era. It was easy with cash to go to the mall but now everyone is using their phone for Uber and more.”
The round Smith’s fund participated in was led by online payments service Stripe and saw Step raise a total of $22.5 million (£18.34 million). Other investors included the rapper Nasir “Nas” Jones, consumer tech company WndrCo and Noah and Jonah Goodhart – the co-founders of online behaviour data analytics company Moat. An earlier round attracted active Silicon Valley VCs including Crosslink Capital, Collaborative Fund and Sesame Ventures.
Step hasn’t even yet actually come to market but already has a reported waiting list of over 500,000. The funding raised from the most recent investment round will be used to launch its first product in partnership with Mastercard.
The funding will be used to bring Step’s first product to market, banking accounts with payment cards attached. This will be done in partnership with Mastercard. The start-up will hope the involvement of rapper Nas proves to be a good omen. He was an earlier investor in Ring, the smart doorbells and home security company acquired by Amazon last year for over $1 billion. He is believed to have made over $40 million as a result. Some of that seems to have been put back to work with his latest investment n Step.
So how exactly does Step help teach teens financial literacy? The difference between the app and other start-ups in the space in the USA such as Current and Greenlight is that Step put teens in direct control with ownership over their finances. Parents have access but the account holder, the teen, is the primary decision maker. The app includes the kind of budgeting tools such as savings pots that UK users of online-only banking apps for adults may be familiar with.