Copper Banking Adds $ 9 Million in Funding as Digital Banks Claim Teenage Customers – TechCrunch
Copper bank, a digital banking service for teens, today announced it has raised a total of $ 13.3 million in seed funding.
PSL companies, an arm of Pioneer Square Labs, led a $ 4.3 million increase for Seattle-based Copper last year and an additional $ 9 million this year. Other investors in the fintech startup include Clocktower Ventures, Index Ventures Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Fiat Ventures and Arnold Ventures.
CEO and Co-Founder of Copper Banking Eddie behringer believes the startup has some competitive advantages.
On the one hand, Behringer and Chief Financial Officer Stefan Berglund previously co-founder of Snap! Raise, a youth-focused crowdfunding platform that has raised over $ 90 million in venture capital funding. The pair attribute Snap! Increase the success of deep relationships at the local level in high schools. They mimic this model to fuel Copper’s growth.
âWe worked with millions of teens and parents at our old company,â Behringer told TechCrunch. âThis playbook is one of the main reasons we’ve grown so quickly so quickly. We have taken this route before – in partnership at the community level. This is something that is generally overlooked in today’s technology models.
Additionally, Copper Banking has made financial education part of its offering so that teens can not only spend money, but also manage it better. For example, the in-app financial advice aims to help teens “learn the essential money lessons they’ll need throughout their lives,” the company says.
âA great example of this is that teens have the ability to tell Copper what they want, which we then translate into savings goals that really teach them,â Behringer added.
So far, Copper’s strategy seems to be working. The two-year-old startup launched earlier this year and now has more than 350,000 users on its platform. Since its launch, Copper has seen approximately 70% month-over-month growth, and around 70% of users are drawn to the platform through âorganic word of mouth,â Behringer said. The average Copper customer is 15 and often refers another friend, not counting his own siblings, according to the company.
By emulating Snap! Raise model, Copper Banking also relies on a network of young ambassadors who promote the platform through schools, clubs and sports teams. The result, Behringer adds, is lower fees for its teenage customers. And for Copper, the approach has resulted in customer acquisition costs that it says are significantly lower than traditional banks.
âWe realized that by cultivating Snap! Raise, that very little has been done to prepare this generation for financial success, âBehringer told TechCrunch. âOne of the first things we noticed was that the banks set the bar extremely low for banking before age 18. “
Copper Banking provides an FDIC-backed digital bank account linked to 50,000 ATMs. Teens also get a personalized Copper debit card, P2P payments, direct deposits, and automatic savings options. Parents must open an account for their teenagers and can link their traditional bank accounts Copper Banking cards to provide an automatic ‘teenage salary’ allowance. They also receive smart alerts and controls over spending behavior.
Copper offers a co-parenting feature for separated parents living in different households.
The company plans to use its new capital primarily to further develop its platform and banking products as well as to focus on its go-to-market strategy. Naturally, she also hires from multiple departments including engineering, compliance, marketing, sales, and operations. Copper currently has approximately 25 employees.
Geoff Entress, managing director and co-founder of lead investor PSL Ventures, said the The copper management team’s vast experience in growing start-up companies is really reflected in their metrics.
âTheir adoption, conversion to funded accounts, and referral metrics outperform most of the DTC metrics you see out there, a testament to Copper’s incredible resonance with customers,â he wrote. -mail. âAs an investor, these are the signals you want to see. We believe Copper Banking is uniquely positioned to help put the next generation of Americans on the path to better financial health. “
Ben Savage, Partner at Clocktower Ventures, says the teen market is incredibly attractive to neobanks, but âteens don’t want their parents forced on them.
âCopper has the brand, product and model to market to fill that void,â he said in a written statement.
Copper points out that this is a digital bank. Evolve Bank & Trust provides its banking services.
Although the startup is focused on teens, anyone over the age of six can get an account if they have a phone.
The landscape of banking services for young people is increasingly crowded. In April, Step – which also caters to teenagers – shut down on $ 100 million Series C funding round and Greenlight, a fintech company that provides child-friendly bank accounts for parents, raised $ 260 million in a Series D funding round that nearly doubled its valuation to $ 2.3 billion.