Copper, a teen banking app with nearly 1 million users, lands $29 million to expand in investments

Kupfer co-founders Stefan Berglund (left) and Eddie Behringer. (copper picture)

If Eddie Behringer When he asked his mother how he used a tech app to store cash as a teenager, she scoffed.

But the times have changed.

Behringer’s teen-focused fintech startup, copperhas attracted more than 800,000 users in less than three years and just completed a $29 million investment round to fuel growth.

“Parents have historically made decisions about where to set up your first bank account,” Behringer said. “Gen Z is very powerful in making household decisions.”

The company, formerly known as Copper Banking, is targeting users aged 10 to 19 with a debit card and app experience that includes parents. It gives teens an incentive to save money by giving cash in exchange for meeting a savings goal or paying parents back on time. You can also make money just by passing a quiz about finance.

Now the 30-person startup is expanding into investments and plans to funnel users funds from their accounts into investments like stocks, mutual funds, and cryptocurrency.

It’s all part of the plan that Behringer and his co-founder have outlined Stephen Berglund When they founded Copper, they theorized that America’s teens were massively underserved when it came to financial education and opportunities.

A number of factors are contributing to Copper’s rapid growth, including the meme stock mania of recent years, which has lured young people to financial markets and investment apps like Robinhood.

The pandemic also forced physical bank locations to close temporarily; Parents could not go to a branch and create an account for their children.

Part of Copper’s secret recipe is its marketing strategy. It lowers customer acquisition costs by going straight to middle and high schools, conducting financial education workshops, and providing access to its app. It’s the same tactic used by Snap! Raise, a Seattle software startup co-founded by Behringer and Berglund that helps facilitate fundraisers for schools.

Copper is part of a bevy of financial startups targeting younger users, including Step and Greenlight. Stack, a Seattle startup, is also trying to help teens invest, but with a focus on cryptocurrency.

Some financial education advocates are skeptical of these types of apps, noting that children may not fully understand the nuances of the stock market and may take more risks The New York Times reported last year.

Behringer said traditional financial business models rely on more frequent trading or the monetization of credit and credit. On the other hand, fintech platforms have enabled the opposite and don’t need to make money from “predatory practices,” he said.

“We don’t have to support the overhead of physical offices and we can really align the business model with the outcomes of our users,” he said. “We bet that providing real education behind this approach will be good for business.”

“We bet that providing real education behind this approach will be good for business.”

Copper, a finalist for Startup of the Year at the GeekWire Awards, generates revenue primarily from a fee charged to merchants who make payments through a Copper debit card. It also makes money from debit charges when parents fund their kids’ accounts with a debit card.

A constant challenge for Copper is not only to resonate with teenagers, but also to convince parents that its app is safe and secure. Parents must provide personal information so their children can legally bank and invest with something like copper.

“We do everything in partnership with parents,” Behringer said.

Fiat Ventures led the Series A round, which included participation from Panoramic Ventures, Insight Partners, Invesco Private Capital and all existing investors. PSL Ventures, the venture capital arm of Pioneer Square Labs, was an early investor alongside Mana Ventures, Western Technology Investment, Clocktower Ventures, Index Ventures, Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Samsung Next and Arnold ventures.

Copper closed a $13.3 million seed round in October. Total funding to date is $42.3 million.

Virginia C. Taylor