20 Things You Didn’t Know About Step

Mobile Banking

Step is a new startup in the financial services industry that serves teenage clients. It’s designed to provide mobile banking to help teens learn how to manage their finances. It’s a practical and easy-to-use resource that helps young people to learn how to use banking services to prepare them for independence as they enter adulthood. It’s an educational tool that is created with benefits and safeguards that provide a useful service for its target audience. To help you become familiar with this new startup, here are 20 things you didn’t know about Step.

1. Step was founded in 2018

This is a new company that has only been in existence since 2018. It has been in operation for just under three years, but the business has already gained ground in its growth and expansion. The founders of Step are Alexey Kalinchenko and CJ MacDonald. The two entrepreneurs had a vision for helping your people to become familiar with how banking operations work. Step offers a financial product that helps young people prepare for independent life and managing their financial resources, according to Crunchbase.

2. Step falls under three business categories

Technically, step is a FinTech company because it provides a unique technology that provides teens with an app that helps them learn how to manage their money. It’s also listed as a financial services company, and found in the finance category. The mobile app is designed to offer a platform that is easy for new customers to use. It’s an exceptional learning tool for teens.

3. Step has raised $191 million in venture capital funding

Step has participated in five rounds of venture capital funding to get the new startup on its feet. The first Seed Round of funding closed on January 31, 2019, raising $3.8 million with 3 investors. A Series A round closed on June 6, 2019, raising $22.5 million with 12 investors. A round of Series B funding closed on December 2, 2020, adding another $20 million. A Debt Financing round closed on February 25, 2021, raising $15 million. The most recent funding activity was a Series C round that closed on April 27, 2021, adding another $100 million in venture capital funding with 10 investors.

4. Step has 5 lead investors and 29 total investors

The owners of Step have been successful in attracting financial backing for the new fintech startup. So far, the five rounds of venture capital funding have been led by five large financial firms. They’re joined by an additional 24 investors. These include Charli D’Amelio, General Catalyst, Will Smith, Jared Leto, The Chainsmokers, Stephen Curry, Jeffrey Katzenberg, Coatue, Stripe, Franklin Templeton Investments, and Bridge Bank to name a few.

5. Step is led by a 6-person executive team

The new fintech startup currently has 6 members in its executive team. The CEO and founder are CJ MacDonald. Alexey Kalinichenko is a co-founder and CTO. George L. Bowen is the COO. Greg Hill is the head of Design. The Head of the Product division is Guillaume Lebleu.

6. Step is advised by a 3 member board

The board of directors for Step is comprised of three members. Michael Gilroy is a General Partner for Coatue and serves on 7 other boards and advisory panels. He is a current investor. Eric Chin joined the board in February of 2019. He is a Partner for Crosslink Capital and serves on 1 board. Jordan Angelos is the third member of the board for Step. He is an investor in the company.

7. Step uses complex technologies to power its website and mobile banking app

While users enjoy an easy-to-navigate and seamless user experience, there are many complex technologies at work behind the scenes. Step currently actively uses 57 different technologies to power its mobile banking app and website. These technologies are distributed through 23 technology products. They include HTML5, Google Analytics, Google Fonts, Viewport Meta, iPhone/Mobile Compatible, and SPF, just to name a few of them. These are expensive technologies that contribute to a high overhead cost for operation. If you’re wondering why it takes millions in startup investments to get a company off the ground, this is just one of the associated costs of doing business.

8. Step is a unique platform that is trademark protected

Step’s developers have registered 1 trademark for patent protection. It’s listed in the scientific and technology services class. Registering a trademark helps to guarantee that the unique platform and the accompanying technology cannot be imitated by any of Step’s competitors in the fintech industry. They’ve taken this step to maintain the uniqueness of Step in the industry niche that it falls under. This helps Step to maintain a competitive edge in the market.

9. Step has attracted the attention of multiple celebrity backers

According to Tech Crunch, Step has provided an interesting investment opportunity that has attracted the attention of several celebrities. The financial service for teens is backed by Tik Tok Star Charli D’ Amelio, The Chainsmokers, Will Smith, and Jeffrey Katzenberg. Other notable celebrity figures who have invested in Step include musician and actor Jared Leto, and one of the latest celebrities to join in the support includes Stephen Curry, NBA All-Star player. The influx of celebrity support is because of the positive social implications of Step in assisting young people in entering into adult responsibilities.

10. Step is stockpiling funding

Step’s CEO revealed that the money the organization has raised from its Series B funding round has not yet been spent. He acknowledged that they don’t need money, but they do have plans for it. The funds stockpiling is a part of Step’s strategy for helping the new startup to grow and expand at a faster rate. The reason for the fundraising was not to help them with operations, but rather to have the necessary funding to investing the infrastructure of the company. The funds will be used to accelerate the growth of the company at a strategic point in time. It will help to speed growth.

11. Step is growing on its own

The company is evolving and growing organically. Usage of the apps is going up at an impressive rate. New clients are realizing the value of the service provided and this is fueling a frenzy of new banking customers signing up with up to 10,000 new accounts and more daily. On slow days the new account statistics are around 7,000 daily.

12. Step is planning to double its operations

Over the next year, Step plans to add to its operations, product and design, and engineering teams. It is operating with a 65-person team currently. Over the next 12 months, it is expected that the numbers of the workforce will double. This will no doubt bring in double the revenues once the larger infrastructure is in place, and the startup has plenty of funds in reserve to finance the expansion.

13. Step has a young target audience

Other financial companies provide banking services for teens, but Step has carved out a unique niche for itself. It has a younger target group than most companies. While most are geared toward those age 18 and older, Step takes their services to a new level with a target group of teens that are age 13 through 18. It’s trying to reach kids that are just entering their teen years, to help acclimate them to the workings of the banking industry at an earlier age than most.

14. Step helps teens establish credit

Step offers FDIC-insured banking service for people in their early teen years. It also offers a secured Visa card option. This will help teenagers as young as 13 years old to start building their credit scores. By the time these kids are 18 years old, they can already have a good credit score if they manage their finances well.

15. Teens can send and receive funding

Step provides teenagers with mobile banking options in an app that provides them with functionality that is similar to Venmo. It allows them to send money to friends, and to receive funds as well. There are no fees charged for the bank accounts that are made for teens, so there won’t be surprise service charges just for the privilege of having an account. It’s free.

16. Step has a unique and effective marketing strategy

While some companies pour millions of dollars into their marketing and sales campaigns, Step takes a different approach. Behind the scenes, it is busy leveraging partnerships with social media influencers including Justin Timberlake, also an investor, Josh Richards, and Charli D’Amelio. Endorsements from these popular influencers help to promote Step, but it also uses word of mouth and social media strategies. Step also has a popular referral program that pays existing customers for signing up new accounts.

17. Step is planning its strategy for the future

Investors will also benefit from knowing that Step has plans to focus on driving new growth in the market for its existing customer base as they age. As teens using the mobile banking app approach adulthood, Step plans to offer additional services that will retain them as loyal customers. There are plans in place to enter into the lending and credit market. Step also plans to introduce a market for making investments, possibly leveraging a partnership with The Franklin Templeton investment. This is a brilliant strategy that will follow their current client base through their lifespan. It also represents the perfect opportunity for Step to grow and expand into new markets incrementally. It allows for careful planning for each new phase of development and it suggests that Step has plans to evolve into a more holistic financial services provider as it matures. It’s not rushing into the expansion, but rather taking it one phase at a time, which means that there won’t be a financial strain on the institution at any given point in time.

18. Step has already doubled its workforce and is still hiring

According to Step’s LinkedIn page, Step has reached its goal of doubling the workforce from 65 employees to roughly double that size. It achieved the goal with a current headcount of 138 employees. The company is still hiring and expanding its operations. There are 28 more job openings listed on its official site. All of the new job openings are listed for the Palo Alto, California area where Step has its headquarters. It has become necessary to recruit new hires to help manage the massive influx of new accounts that are happening daily.

19. Step is still a privately held company

So far, there has been no indication that Step plans to take its business to a public platform. It has done remarkably well through venture capital funding, along with private investors from the celebrity arena of musicians, actors, social media stars, and even sports figures. It is still a privately held company with the original owners maintaining control of the operation. It’s unlikely that you will see Step shares offered for sale on the stock exchange at any point shortly. An IPO isn’t something that is needed at this stage of its development

20. The current valuation of Step is not being disclosed

When we attempted to learn about the current valuation of Step, we discovered that this figure is not being disclosed at this time. As of June of 2019, the valuation was estimated at $80 million. With the addition of between 7,000 to 10,000 new accounts daily, the generated revenues must be high. Step is playing its cards close to the vest at this point. The CEO acknowledged that the company does not need funding and it is sitting on all of the funding raised since its round of Series B funding, which is more than $100 million. Hopefully, the company will disclose its new valuation shortly.

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