Neobank Gen Z Step Launches Crypto Investing and Rewards

Diving Brief:

  • After securing $300 million in debt funding, neobank Step has rolled out crypto investments and rewards on its platform, the Gen Z-focused fintech announced Tuesday.
  • The new offering allows teenagers, with the consent of a legal guardian or parent, to buy and sell Bitcoin. Step said he plans to add stocks and other cryptocurrencies to the platform soon.
  • The fintech, which claims to have more than 3 million customer accounts, said it is partnering with digital asset infrastructure and regulatory platform Zero Hash to offer crypto transaction and custody services -change.

Overview of the dive:

“Gen Z is the generation of creators, entrepreneurs and investors. They redefine standards and take control of your financial future earlier in life with products like Step,” said Jim Labe, co-CEO of TriplePoint Capital, which participated in Step’s recent debt financing round. “We are thrilled to partner with the Step team to continue to grow the business to millions of financially savvy teens and young adults.”

Step users under 18 need a parent or legal guardian to co-sign a Step account, which comes with a secure payment card that allows users to build credit.

The fee-free account is offered in partnership with Step’s sponsor bank, Evolve Bank & Trust, which also participated in the recent neobank round.

To date, the fintech has raised over $500 million in equity and debt funding from a group of investors including Stripe, Coatue, Cross link Capital and General Catalyst, as well as TriplePoint.

The startup has also secured investment from celebrity investors such as singer/actor NBA player Justin Timberlake Stephen Curry, Social Media Personality charlie improvement and others.

Step said its new digital asset offering allows customers to earn crypto rewards when they use their Step card. The rewards offer is an extension of its recently launched cash rewards platform, the company said.

“In less than two years, we have been able to help more than 3 million customers establish a solid financial foundation and start thinking about their long term goals,” CJ MacDonald, founder and CEO of Step, said in a statement. “We are thrilled to be able to offer teens and young adults the opportunity to build credit, budget, spend, save, earn and now invest in their financial future directly in the Step app.

The startup is the latest fintech to offer crypto products, joining companies like Current, MoneyLion and Stash in expanding in space in response to customer interest.

Step, like many other fintechs getting into crypto, said it complements the new service with a focus on education.

The company launched a six-lesson financial literacy program called Money 101, designed to help students and parents understand the fundamentals of modern banking, investing in stocks and cryptocurrencies.

Step said the program is taught in more than 100 high schools across the country.

Michael J. Birnbaum