Mobile Bank Current Raises $220M Series D, Valuation Triples

Current Secures $220 Million in Series D Funding

Current, a U.S.-based fintech company serving nearly 3 million customers, has announced a $220 million Series D funding round. Leading the investment is Andreessen Horowitz (a16z), a new investor for the challenger bank.

Rapid Growth and Valuation Increase

This funding arrives quickly after Current’s $131 million Series C round concluded last year. At that time, the company had experienced a doubling of its user base to surpass 2 million in just six months.

Consequently, the fintech firm has seen its valuation approximately triple in five months, now reaching $2.2 billion.

Investors Participating in the Round

The investment round also saw participation from existing investors, including:

• Tiger Global Management
• TQ Ventures (managed by Scooter Braun)
• Avenir
• Sapphire Ventures
• Foundation Capital
• Wellington Management
• EXPA

David George, who spearheaded the round for a16z, will be joining Current’s board of directors.

Evolution of Current’s Services

Initially launched as a debit card for teenagers managed by parents, Current has broadened its offerings to include personal checking accounts. These accounts are built upon the same core banking infrastructure.

Similar to other neobanks, Current provides features such as fee-free overdrafts, no minimum balance requirements, accelerated direct deposits, real-time spending alerts, banking insights, access to surcharge-free ATMs, and mobile check deposits.

Last year, the company also introduced a points-based rewards program to distinguish itself within a competitive market. Furthermore, Current was among the first financial institutions to distribute early stimulus payments during the pandemic.

Strategic Partnerships and Creator Collaboration

Current is actively forging partnerships with content creators. Notably, MrBeast (Jimmy Donaldson) recently announced on his YouTube channel that he will personally reward $1 to the first 100,000 individuals who sign up using his unique Creator code. MrBeast is also an investor in the company.

Appealing to a Younger Demographic

Current benefits from the increasing preference of younger generations for mobile banking applications over traditional banks. The average Current customer is 27 years old.

By avoiding the costs associated with physical branches, digital banks like Current can offer benefits like reduced or eliminated account fees and enhanced consumer protections.

Competition in the Teen Banking Space

Current continues to provide teen banking services, directly competing with Step, another mobile app leveraging social media influencers to reach younger users. However, Step focuses on the 13-18 age group, offering banking services and a secured card, while Current primarily targets parents.

Account Options and Target Audience

Current’s teen account is available for $36 annually. Personal checking accounts are offered in both free and premium tiers, priced at $4.99 per month.

The company’s primary focus remains serving the over 130 million Americans who live paycheck to paycheck, though its services may attract a wider audience over time.

CEO’s Vision for the Future

“Our ongoing commitment is to integrate individuals into the financial system, ensuring universal access and then democratizing value in this evolving landscape,” states Stuart Sopp, CEO and founder of Current. “As our scope expands, we anticipate reaching an even greater number of people.”

Expansion into Cryptocurrency

The newly acquired funds will be allocated to company growth, member acquisition, and the expansion of Current’s banking product suite. A key area of investment will be cryptocurrency, involving a partnership and educational resources for users.

Founders’ Background in Crypto

Interestingly, Current’s founders, Stuart Sopp and CTO Trevor Marshall, have a background in cryptocurrency. An early iteration of Current initially incorporated Bitcoin wallet addresses and Ripple gateways.

However, the team determined that the technology was not yet mature enough at the time and shifted their focus to mobile banking. “We possess this foundational knowledge, and we don’t necessarily need to rebuild everything ourselves,” Sopp explains.

Democratizing Access to Financial Systems

Cryptocurrency aligns with Current’s mission of democratizing access to financial systems for underserved populations in the U.S. The company aims to provide secure and trustworthy financial services within the crypto space.

“Significant value is being generated in crypto, and we want to ensure we provide safe, trustworthy financial services in that realm, alongside our existing offerings,” Sopp notes. He also highlights the importance of responsible lending and credit card offerings, considering that a majority of Current’s members have a FICO score of 650.

Hiring Plans and Company Growth

Current will utilize the new funding to expand its team across all departments, including marketing, product development, engineering, finance, customer support, fraud prevention, risk management, and cryptocurrency-related roles.

Currently employing 100 individuals, the company plans to grow to approximately 200-300 employees within the next 18 months.

Competitive Landscape

Current’s funding announcement coincides with similar funding rounds for competitors Step and Greenlight, both of which focus on families.

Industry Perspective

“The next generation of customers doesn’t desire traditional physical branches,” stated David George of a16z. “We anticipate a shift towards mobile and consumer-centric banking services driven by technological innovation, and Current’s exceptional growth demonstrates their leadership in this trend. Their product is top-tier, and they’ve proven their ability to reach customers previously unserved or underserved by traditional banks.”