Stripe backs teen fintech Step and scoops up TaxJar

28 Apr 2021646 Views

Stripe’s Patrick Collison and John Collison. Image: Stripe

The payments giant is continuing its investment streak, backing a digital banking start-up for teenagers and parents.

Stripe is busy investing again, this time backing teen fintech start-up Step and snapping up tax software outfit TaxJar.

The payments giant was one of the backers in Step’s $100m Series C round, which was led by General Catalyst and also attracted investment from Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC.

Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.

Step provides digital banking services for teens and their families, with a banking and payments app and a linked Visa card. It allows parents to set controls and limits on spending and encourage responsible finances.

CJ MacDonald, chief executive of Step, said the company is looking to “improve the financial futures of the next generation”.

To date, the San Francisco-headquartered start-up has raised more than $175m from investors and now has 1.5m users.

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“Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right,” said Kyle Doherty, managing director at General Catalyst, who is now joining Step’s board.

Taking on TaxJar

Stripe, meanwhile, has also announced plans to acquire TaxJar, which builds software for online businesses that automates the reporting and filing of sales taxes. TaxJar’s software will likely be integrated with Stripe’s services like Billing.

No terms for the deal have been disclosed. The Boston start-up had raised more than $60m from investors including Insight Partners.

“With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally,” Stripe chief financial officer Dhivya Suryadevara said.

Stripe, which recently closed a $600m funding round that valued the company at $95bn, has been investing heavily in start-ups of late, backing several fintech companies like Ramp and Check.

Updated, 1.45pm, 28 April 2021: A previous version of this article stated that Stripe led Step’s latest funding round. It was updated to clarify that Stripe led a previous funding round in 2019 and was just a participant in the fintech start-up’s latest Series C round.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com