It’s never too early to teach children how to manage their finances. Greenlight Financial Technology is capitalizing on that, raising $39.1 million in funding.
The Atlanta financial technology startup that makes a debit card geared toward children with built-in parental controls, disclosed in a Securities and Exchange Commission filing it raised $39.1 million in funding as part of efforts to raise $54 million. The fintech company startup said 17 investors participated in the funding round.
Started in 2014, Greenlight offers a prepaid debit card that parents fund. They can put restrictions on what the money can be used for. Parents can track spending, create a list of approved vendors and even set an interest rate they will pay if their kids save money instead of spending it. Parents can choose to fund the account with money earned through chores, allowances, and bonuses.
Greenlight has been drawing interest from investors, who are directing funds its way. In 2017 it raised $5 million in funding, which went to develop its product. That was followed by a fundraising round of $50 million in 2018. Amazon’s Alexa Fund, SunTrust Banks and Ally Financial were investors in that round.
Greenlight isn’t the only fintech company going after the market. A handful of startups including Current, FamZoo, and gohenry have similar offerings. They are part of a group of financial technology startups that want to cater to segments of the population that have been ignored by traditional financial services companies. While credit card issuers have long courted college students, they have caused more harm than good for countless Americans. These fintech companies argue that teaching children about personal finance in classrooms isn’t enough, kids need real-life experiences to better understand how it works.
The idea appears to be resonating, at least at Greenlight. The company counts 400,000 parents and children as customers. It was able to grow its customer base more than 300% less than six months after it launched. “Parents want to teach their children how to be smart with money at an early age so they will make good financial decisions in the future,” said Tim Sheehan, CEO, and co-founder of Greenlight said last year when announcing its growth rate. “By using the Greenlight Card and App, kids can see in real-time what’s happening with their money, keeping them engaged and invested, while creating natural opportunities for parents to have financial conversations with them.”