Copper, a digital banking service aimed at teens, has raised $29 million in Series A funding.
The investment comes just over seven months after the startup revealed it had raised $9 million in a seed round and included participation from all existing investors. Since its inception, it has raised a total of $42.3 million.
Since its launch last May, Copper has grown to have more than one million users. That's up from 350,000 last October. The company said that its revenue growth is in line with its user growth, which has more than doubled since October 2021.
Seattle-based Copper offers features such as personalized debit cards, access to 50,000 ATMs, and support for digital wallet like Apple Pay, Google Pay and Samsung Pay.
Parents use Copper to send money to teens and monitor their spending. Teens can use P2P transfers to pay friends and set up direct-deposit for summer jobs. There are tips on what it describes as finance fundamentals, such as dividends, budgeting and compound interest.
Within the next month, Copper plans to onboard its first group of customers, as the company gears up to expand into investing. The startup wants to give its customers the ability to direct funds from their accounts into a wide range of investments. Eddie Behringer said that the move was based on demand from its users.
It was driven by a lot of demand from teens. When we asked parents about it, they assigned the highest value to the topic of being able to provide their teens access and the education behind that access.
The company's mission of being a teen was one of the reasons for the move.
The image is called Copper.
Despite parents' best intentions, teens are getting access to investing and cryptocurrencies. We wanted to build a product that worked in a completely different fashion.
Investing through Copper gives teens a supervised setting where they can learn as they invest, and where parents can see where their money is going.
Several teen-focused fintechs have recently expanded their offerings to include acryptocurrencies component. Step, a Series C fintech app providing banking services to teenagers, recently announced that it would be offering a new product that will enable its 3 million-plus users to invest in equities and cryptocurrencies on its app. The new product, Step Investing, will be launched early this summer.
Onu launched custodial accounts for children with access to 22 cryptocurrencies last month, and children's social network Zigazoo started dropping NFTs in April. According to Noah Kerner, the startup plans to include cryptocurrencies as an option for customers who would like to participate.
Copper Banking adds $9M in funding as digital banks clamor for teen customers
Copper wants to grow in large part by using an offline strategy and hopes to beat its competitors to market.
The co-founder and CFO of the company previously co-founded another company. Raise has raised over $90 million in venture funding. The pair attribute is snap! There are deep grassroots-level relationships in high schools. They are emulating that model to power Copper's growth and say that it acquires over 60% of its new customers through word of mouth.
interchange fees make up the majority of copper's revenue. It can make money if a parent funds their account instantly through a feature it offers.
Copper was not a traditional investment because of the way it was learned. The venture arm of the marketing agency is called Fiat Growth. The startup had been working with the agency since it was founded.
They were able to see our growth metrics from the inside and quickly put together a term sheet when we weren't actively raising.
Alex Harris, who was head of growth at digital bank Chime in its early days, is joining the board of Copper. The agency leaned in from the venture side after seeing the product and traction of Copper.
Simple, the market leader, was forced to sell due to unsustainable economics. Chime was the clear market leader because of disciplined economics, smart acquisition tactics and deep industry expertise.
I see the same parallels for Copper, he said.
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