GoHenry raises USD 55 million in funding

The equity funding is coming from previous backers Edison Partners and Revaia (formerly Gaia), with a strategic investment from Italian payments company Nexi, a new backer.

Now the plan will be to expand its existing products with a new ISA product for savings accounts and the launch of a new gamified educational experience called Money Missions; to expand geographically in Europe; and to start considering where there might be opportunities to do more for those aging out of the core service.

GoHenry is a parent account that acts as the control centre for up to four child accounts, and the kids’ cards are funded from this. Money can be transferred to the parent account by bank transfer, debit card or standing order, although they only get one free top-up each calendar month. Additional ‘loads; cost 50p a time. However, moving money from the parent account to the child’s card is free. UK and overseas ATM withdrawals are free, and GoHenry no longer charges foreign exchange fees when the card is used abroad.

GoHenry’s fundings

The company is not disclosing its valuation, but according to TechCrunch it is more than USD 250 million and less than USD 500 million. It brings the total raised by GoHenry to USD 125 million, including a USD 40 million round led by Edison in 2020 and a USD 15 million angel round. Early on, GoHenry also raised USD 15 million in crowdfunding in 2016 and 2018 and it likes to say that it has 5,000 shareholders as a result of those campaigns, with half of them also users.

GoHenry now has 2 million customers – all between 6 and 18 years of age – across the UK, the US, and more recently France and Spain after acquiring French rival Pixpay in July 2022. Today, they use two main services from the company, a prepaid debit card and a ‘financial education’ app that links to that card.

GoHenry itself is not yet profitable even if it posted UD 42 million in revenue in 2021, which was double what it made in 2020.

Youth banking

In order to serve young people financially, banks have to adapt to their demand for fast information. It’s important to remember that they hail from generations accustomed to direct communication via digital platforms, and that they prefer not to depend on cash for their transactions and want to solve their problems as quickly as possible.

Gen Z, the generation currently between the ages of 8 and 23, represents around USD 150 billion in spending power, according to McKinsey. Therefore, even though most children under the age of 16 don’t have much income, fintechs are banking on their growing spending power. In the US, Gen Z will surpass Baby Boomer spending by 2025, according to a recent report.

Moreover, kids represent low or reduced risk clients because parents credit and actively monitor their accounts. Junior accounts can be a significant source of new, commission, or fee-based revenue. They can also be packaged with other products, creating easily sold one-stop solutions for parents and while developing brand loyalty among kids.