Financial technology company Current today announced today it has raised $5 million in a Series A funding round led by QED Investors, with additional investment from Cota Capital.
In conjunction with the investment, QED's Founding Partner Frank Rotman will join Current's Board of Directors. Current is building a mobile, digital-first payments platform free of traditional banking constraints. The company has focused its efforts on families, and in particular, teens – mobile and digital natives with no preconceptions about traditional banking and payment methods.
"More and more consumers and retailers are eschewing cash for digital payments, yet the market seems to want teenagers to start-off with a traditional checking account," said Current Founder and CEO Stuart Sopp. "We are introducing teenagers into the financial system with digital payments and a set of mobile tools that leave behind the outdated structures of traditional banking and better prepare them for the future."
There are 30 million teenagers currently in the United States, with five million more aging into this demographic each year. Teens approach money, transactions, and value differently than their parents' generation -- they're abandoning cash more quickly, only using it when absolutely necessary, and half as often as adults. Teen behavior on Current follows this trend, with ATM withdrawals representing less than four percent of their transactions.
Additionally, teens are twice as likely to shop online than adults, with online purchases accounting for 17.9 percent of teen spending, versus only 8.6 percent of adult purchases. Current is building products and solutions that meet the needs of digital payments natives now, and when control their own purchasing activities when they grow older.
"While the need for a Family Banking product has been around for decades, the available technology wasn't able to address these needs. With the proliferation of smartphones and the increase in digital payments being accepted universally, the timing is perfect for a company like Current to emerge," said Frank Rotman, founding partner at QED Investors. "Traditional bank products designed on top of legacy infrastructure can't solve the problem. Current can."
Founded in June 2015, Current's early development was backed by Expa and Human Ventures. The company brought its teen-oriented debit card and app -- the Current Student Account -- to market in May 2017.
Teens appreciate the control Current provides them over spending and saving, the reliability of knowing when their funds will be transferred, and the ability to check their balance at any time.Parents value the convenience of Current, including instantly transfers of money to their kids for allowance, chores and one-time events or emergencies. They also value the visibility Current provides into spending, with real-time spending alerts letting them keep an eye on purchases while giving their kids the space and relative independence to mature.
With the Series A round of investment, Current has assembled a group of strong business partners who believe in the company's vision, have confidence in the business, and bring invaluable experience, counsel and resources. "The commitment of our Series A investors to our business is recognition of our hard work to date, and a big vote of confidence for our future," said Sopp.