Gen Z neobank Step launches crypto investment, rewards

Dive card:

• Fresh off securing $300 million in debt financing, neobank Step has rolled out crypto investments and rewards on its platform, the Gen Z-geared fintech announced Tuesday.
• The new offering allows teenagers, with the consent of a guardian or parent, to buy and sell Bitcoin. Step said it 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 cryptocurrency transactions and custody services.

Diving Insights:

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

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

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

To date, the fintech has raised more than $500 million in equity and debt funding from a group of investors that includes Stripe, Coatue, Cross connection Capital and General Catalyst, as well as TriplePoint.

The startup has also received investment from celebrity investors such as singer/actor Justin Timberlake, NBA player Steph Curry, social media personality Charlie D’Amelio and others.

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

“In less than two years, we have been able to help more than 3 million customers establish a strong financial foundation and start thinking long-term goals,” said CJ MacDonald, founder and CEO of Step, in a statement. “We’re excited 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 see crypto product offerings, joining the likes of Current, MoneyLion and Stash in expands into space in response to customer interest.

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

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

Step said the program is being taught in over 100 high schools across the country.