Copper Banking, a digital banking service aimed at teens, announced today it has raised a total of $13.3 million in seed funding.
PSL Ventures, an arm of Pioneer Square Labs, led a $4.3 million raise for Seattle-based Copper last year and an additional $9 million this year. Other investors in the fintech startup include Clocktower Ventures, Index Ventures Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Fiat Ventures and Arnold Ventures.
Copper Banking CEO and co-founder Eddie Behringer believes the startup has a few competitive advantages.
For one, Behringer and CFO Stefan Berglund previously co-founded Snap! Raise, a youth-oriented crowdfunding platform that has raised over $90 million in venture funding. The pair attribute Snap! Raise’s success to deep grassroots-level relationships in high schools. They are emulating that model to power Copper’s growth.
“We worked with millions of teens and parents in our previous company,” Behringer told TechCrunch. “That playbook is one of the core reasons we’ve seen such great growth so quickly. We’ve gone this route before — partnering at the community level. That’s something that is typically overlooked in tech models today.”
Also, Copper Banking has incorporated financial education into its offering so that teens are not just able to spend money, but also better manage it. For example, financial tips built into the app are aimed at helping teens “learn the essential money lessons they’ll need throughout life,” the company says.
“One really good example of that is that teens have the ability to tell Copper what they want, which we then translate into savings goals that really teaches them,” Behringer added.
Copper offers co-parent functionality for separated parents living in different households.
The company plans to use its new capital mostly to continue the development of its banking platform and products as well as to focus on its go-to-market strategy. It also, naturally, is hiring across several departments — including engineering, compliance, marketing, sales and operations. Copper currently has about 25 employees.
Geoff Entress, managing director and co-founder of lead investor PSL Ventures, said the Copper management team’s extensive experience growing early-stage companies really shows in their metrics.
“Their adoption, conversion to funded accounts and recommendation metrics beat most DTC metrics you see out there, which speaks to Copper’s incredible resonance with customers,” he wrote via email. “As an investor, those are the signals you want to see. We believe Copper Banking is ideally positioned to help set the next generation of Americans on a path to better financial health.”
Ben Savage, partner at Clocktower Ventures, believes that the teen market is incredibly attractive for neobanks, but that “teens don’t want one imposed on them by their parents.
“Copper has the brand, the product and the go-to-market model to fill that void,” he said in a written statement.
Copper emphasizes that it is a digital bank. Evolve Bank & Trust provides its banking services.
While the startup’s focus is on teens, anyone over the age of six can get an account if they have a phone.