Current announced today that it has raised $ 5 million in Series A funding for its children's debit card that parents can control with one app. The company first introduced its Visa debit card into the market in May. Children can use the card to shop in-store or online using funds from their own card-linked bank account, after receiving a digital allowance from mom or dad.
The new round was led by QED Investors and included the participation of Cota Capital. In addition, QED's founding partner Frank Rotman will join Current's Board of Directors.
The company, incubated from Expa Studio, had previously raised $ 3.6 million from Expa and Human Ventures in March 2017.
The idea behind Current is to move pre-teens and teens from cash to digital funds at a younger age. This reflects the biggest transition to a more money-less society – at least here in the US, where you can use a debit card to pay almost anything these days.
The system works by offering a Visa debit card that is linked to the child's account with the funds. Parents can finance the child's account by transferring money from their own bank account.
But what distinguishes Current from previous "kid debit cards" – like Visa Buxx, for example – is its mobile app. The application is not only used to manage money transfers, it also allows parents to establish a list of tasks that must be completed and reviewed before the allowance is paid, if they wish. Parents can also opt for weekly automatic transfers.
In addition, although the card allows children to have a sense of autonomy, parents can also manage the child's expenses by setting daily spending limits, limiting ATM withdrawals and blocking certain categories of expenses. (Although, without a doubt, if your children purchase airline tickets and are playing without your knowledge, you may have problems that a debit card can not solve.)
"More and more consumers and retailers are avoiding money for digital payments, but the market seems to want teens to start with a traditional account," said current founder and CEO Stuart Sopp. new.
"For Current, the focus on adolescents was a strategic decision and one of our ways of differentiating.We not only see the opportunity to create solutions to the problems families are facing. with funds that are not addressed by the market, but we also see the opportunity to work with a clientele that has never been exposed to traditional banks. "an email to TechCrunch.
"This is an untouched open audience and interested in a financial experience quite different from previous generations."
Current also noted that there are 30 million teenagers in the United States, with 5 million aging in the population each year. And this generation is abandoning money faster than their parents – using it half as often. In addition, teen ATMs account for less than four percent of their transactions, according to Current, and are twice as likely to shop online as adults.
Here is a pretty compelling argument in favor of a friend and parenting debit card.
However, Current refused to share its subscriber numbers, citing competitive reasons.
"While the need for a Family Banking product has been around for decades, the available technology was not able to meet those needs. With the proliferation of smartphones and the increase in Digital payments that are universally accepted, the timing is perfect for a company like Current, "said Current's new board member, Frank Rotman of QED." Traditional banking products designed on legacy infrastructure can not solve the problem. The current can, "he said.
Rotman may exaggerate on a lack of family banking products. These exist, but they do not necessarily have all the components that new startups like like current offer.
That is, the current map is not without competition. In addition to former players, like Bluebird, other newcomers operate in this space, like Greenlight, whose debit card also operates outside the United States.
The company says that it will use the funding to invest in the business, customer acquisition and product development.