GoHenry latest in kid’s banking sector to land funding of $40m
GoHenry, a pre-paid card and banking app for six to 18-year-olds, has landed $40 million is funding.
The round – its first institutional fundraise – was led by US growth-equity firm Edison Partners, with participation from Gaia Capital Partners, Citi Ventures, and Muse Capital.
The round follows hot on the heel of Step’s, a US-based teen-focused challenger which raised a $50 million Series B this month.
Whilst the UK is home to Strive, which launched last month, and Revolut, which launched its junior accounts earlier this year.
GoHenry was founded in 2007.
It charges parents £2.99 for its prepaid card and account. It claims a 1.2 million-strong user base.
According to TechCrunch, the fintech has doubled its customer base annually for the last six years.
But it still made a pre-tax loss of £5.8 million in 2019. CEO Alex Zivoder told Reuters last month it was on track to make a profit within” a few years”.
He claims GoHenry made an underlying profit in the second and third quarters of 2020.
Over 2019, GoHenry says parents on its app paid £98 million in pocket money to their children. For chores, children earnt a cumulative £2.2 million.
But the UK-based junior banking market is still overdue disruption. It was only at the end of July that UK rival Beanstalk launched its Junior ISAs (JISAs).
Parents with just £5 to invest on behalf of their children can sign up. The launch marked a significant shift in competition for the junior banking market, as many digital challengers are still unable to offer a product as complex as a JISA.