Greenlight Financial Technology helps parents teach children how to save with its app and debit card products. Now the Atlanta-based company has a new cash infusion to do even more while propelling it into unicorn status.
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The fintech company secured a $1.2 billion valuation after closing on $215 million in Series C funding led by Canapi Ventures and TTV Capital with participation from new investors BOND, DST Global, Goodwater Capital, Fin VC and Relay Ventures. The new investment gives Greenlight approximately $297 million in total funds raised since the company was founded in 2014, according to Crunchbase data. That includes a $54 million Series B led by Drive Capital in 2019.
The app is $5 per month and includes parent-managed, fee-free debit cards for up to five children, Tim Sheehan, co-founder and CEO of Greenlight, told Crunchbase News. Parents and children can work together to manage chores, allowances and spend controls. In addition, there are educational components on earning, saving, spending and giving.
“I have four kids of my own and learned that more parents needed help doing this,” Sheehan said. “Parents are so busy and personal finance is not taught in schools, so we fill this void. Our goal is for everyone to grow up financially savvy, no matter how much their parents know.”
Helping children save
Greenlight is operating in a space–financial education and children–that is attracting more startups and funding. In July, we reported on intech startup Meemo, which launched its social finance app with $10 million seed investment.
Last month, we reported on two startups that graduated from Y Combinator’s recent cohort including CapWay, which is developing a mobile bank aimed at millennials, and Mozper, a debit card and app designed for children and parents in Latin America. In addition, Copper Banking, a digital bank for teens that helps them build financial literacy, recently raised a $4.3 million seed round.
Greenlight was started in 2014, but didn’t launch its debit card until 2017. Today, Greenlight serves more than 2 million parents and kids, of which it has helped collectively save more than $50 million, he said.
Much of the growth was driven by the COVID-19 pandemic, which put money into focus for parents who want their children to form healthy financial habits. That growth attracted investors and led to the larger raise, Sheehan added.
The new funding will help the company reach more families, provide additional educational tools, redevelop the app, and create new investing tools designed for children.
“We have discovered a whole new category called ‘family finance’ that has unmet or poorly met needs,” he said. “We want children to start to manage their own money and learn to make decisions. When it is their money, they are more thoughtful about their purchases.”
Next steps for Greenlight
Meanwhile, Greenlight will begin rolling out its investment product in the fourth quarter, add more value to the product, and continue helping parents navigate this challenging duty.
A unique aspect of this investment is that many of the investors use the product, he said.
One is Gardiner Garrard, founding partner at TTV Capital, who said in a written statement that he and his wife use Greenlight’s tool to help their children manage money.
“Greenlight’s rapid growth is a testament to the value they bring to millions of parents and kids every day,” he said. “TTV Capital is thrilled to provide continued investment to help the company empower more parents.”
Illustration: Li-Anne Dias