Teens are experts at spending money. The trouble is, many never learn how to save it, manage it and make it grow. A third of American teenagers have no bank account of their own, relying on their parents’ credit cards and Venmo accounts to pay for routine purchases.
They get no help in the classroom either, with money management poorly taught — or not taught at all — in school. It’s no wonder the U.S. ranks 14th in the world for financial literacy, a knowledge deficit that leads to lack of savings, crushing debt and even bankruptcy.
It’s a cycle Copper Banking aims to end with its teen-first bank accounts, which combine the mobile banking experience teens want with the financial education they’re missing. Copper announced today that it has completed a Series Seed financing round totaling $13.3 million from new investors including Clocktower Ventures, Index Ventures Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Fiat Ventures, Samsung Next and Arnold Ventures, as well as lead investor PSL Ventures.
Where other youth-oriented neobanks lean heavily on advertising to spread the word, Copper Banking relies on a network of youth ambassadors who promote the platform through schools, clubs and sports teams. For teens, it means fewer fees. For Copper, it’s a stronger business model that dramatically increases trust and adoption while reducing acquisition costs.
Copper Banking was co-founded by Chief Executive Officer Eddie Behringer and Chief Financial Officer Stefan Berglund, who previously co-founded Snap! Raise, the largest youth-oriented crowdfunding platform in the country. Snap! Raise owed its own success story to deep grassroots-level relationships in high schools. The pair are emulating that model to power Copper’s growth. Copper, which launched earlier this year, already has over 350,000 users on its platform, with 70% of users coming from organic word of mouth.
“Copper is teen-first banking and a teen’s first bank account. We provide this generation with the cheat codes to saving that we all wished we had earlier in life,” said Behringer. “Access alone does not equal literacy. Despite having the greatest digital access in history, we still have astronomical credit card and student loan debt. If we want to put a generation of teens onto firmer financial footing, we have to reimagine the banking experience.”
Copper Banking provides an FDIC-backed digital bank account linked to 50,000 ATMs. Teens also get a personalized Copper debit card, P2P payments, direct deposit and automatic savings options. Parents can link their traditional bank accounts to Copper Banking cards to provide an automatic ‘teen salary’ allowance. They also receive alerts and smart controls over spending behavior. Copper offers co-parent functionality for separated parents living in different households. The average Copper customer is 15 years old and refers another friend, not including their own siblings.
“The teen market is incredibly attractive for neobanks, but teens don’t want one imposed on them by their parents,” said Ben Savage, Partner at Clocktower Ventures. “Copper has the brand, the product and the go-to-market model to fill that void, and we’re extremely excited to support Copper as they continue to build on the strong organic growth they are already seeing.”
Copper Banking had previously announced $4.3 million in initial seed funding in August 2020. Clocktower Ventures and other new investors chose to invest subsequently, after seeing the rapid growth. The total funding is now $13.3 million.
The company will use the funding to continue the development of its banking platform and products, as well as to drive customer adoption in target markets. Based in Seattle, the company is hiring across several departments including engineering, compliance, marketing, sales and operations.