Step is Greenlight's cooler cousin. While Greenlight targets parents, Step targets the teens themselves. A no-fee banking app for teenagers with a Visa card, direct deposits for part-time jobs, and peer-to-peer payments. They got Charli D'Amelio (100M+ TikTok followers) to promote it. Half a million users signed up in the first month. Turns out Gen Z wants a bank account that doesn't look like their parents' bank account. Or charge their parents' fees.
Founded
2018
HQ
Palo Alto, USA
Total Raised
$175 million
Founder
CJ MacDonald, Alexis Ohanian (advisor)
Status
Private
Website
www.step.comTHE ORIGIN STORY
CJ MacDonald, a serial entrepreneur, noticed that traditional banks either didn't serve teenagers at all or charged fees that ate into a part-time worker's paycheck. Teens couldn't get a bank account without a parent co-signing.
They couldn't build credit. And they were stuck using cash in a cashless world.
He founded Step in 2018 to build a banking app designed specifically for teenagers. The app is free, which was the key differentiator from Greenlight's subscription model.
WHAT THEY ACTUALLY DO
Step is completely free for users. No monthly fees, no overdraft fees, no minimum balance.
The company makes money from interchange revenue, the small fee merchants pay when a Step card is used.
The bet is that teens who adopt Step will become lifelong customers. If Step can capture a user at 15, they have them through college, first job, and beyond.
Customer lifetime value is measured in decades.
THE PRODUCTS
The Step Visa card with no fees. Peer-to-peer payments between friends.
A spending tracker that shows exactly where money goes. Stock and crypto investing for teens (with parental consent).
A credit-building feature that helps teens establish credit history before they turn 18.
HOW THEY GREW
Influencer marketing was the rocket fuel. Step partnered with Charli D'Amelio (TikTok's most-followed creator) for its launch.
The partnership generated massive awareness among Gen Z. Half a million users signed up in the first month.
The social features drive virality. Teens invite friends to Step so they can send each other money.
The peer-to-peer payment feature creates a network effect.
THE HARD PART
Monetization at scale. Interchange revenue on small teen purchases ($5 boba tea, $12 movie ticket) generates very little per transaction.
Step needs millions of active users spending frequently to make the economics work.
Competition from Cash App, Venmo, and Apple Pay is fierce. These established platforms also target young users with peer-to-peer payments.
MONEY TRAIL
Series A
2019 · Led by Stripe
$22M raised
Series C
2021 · Led by General Catalyst
$100M raised
$750M valuation
WHO BACKED THEM
Step raised $175 million from Stripe, General Catalyst, Collaborative Fund, and celebrity investors including The Weeknd, Will Smith, and Jared Leto.
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