GoHenry: Making Every Child Smart With Money

Debit card and financial education app GoHenrydesigned for kids ages 6-18, has one simple mission: to make every child smart with money.

GoHenry says they enable families to do just that by providing them with the financial education tools to help their children learn the essential pillars of money management.

They launched in 2012 and raised $70 million; their last round was in December 2020. They raised $40 million in a funding round led by US private equity firm Edison Partners, with investments from Revaia (formerly Gaia Capital Partners), Citi Ventures and Muse Capital.

They now have over 2 million customers in the UK and US

“It’s clear that parents want to guide their children with a solid financial understanding. We are here to provide a practical, interactive and fun tool to help families with this important area of ​​their lives,” explains Allyce Buniak, US Public Relations Manager.”

The lack of financial literacy in schools has become a growing concern. Financial advisory service conducted research in schools in the UK and found that the least common activities provided were teaching learners where and when to get financial advice 43% and giving learners experience in planning /budgeting 40%.

After recognizing a need in their own families, Alex Zivoder, Dean Brauer and Louise Hill founded the company as a group of friends.

“Schools and banks weren’t helping teach kids about money, so we decided to create a tool that would allow us to educate our kids while helping them save and spend in a world increasingly cashless. Our first transaction was by a British boy named Henry in November 2012 (Voila! GoHenry!),” Buniak said.

“With access to e-commerce, social media and other online platforms from an early age, children today are early consumers in ways they never have been before.”

Louise Hill, Co-Founder and COO, gohenry

the National endowment for Financial Education revealed that 75% of children could not apply their financial knowledge to real life. And, according to a study by Cambridge UniversityChildren’s financial habits are formed by the age of seven.

At this point, most young people have formed basic behaviors that they will adopt as adults and affect financial decisions for the rest of their lives.

The urgency and need for GoHenry was amplified during the pandemic as the world became increasingly cashless. In the UK, cash payments continued to decline in 2020, falling 35% to 6.1 billion, while contactless payments made in the UK increased by 12% to 9.6 billion, according to UK finances.

“We have seen an increased urgency among parents and other family members to teach the children in their lives money management skills. We’ve noticed an increase in money flowing into GoHenry accounts from grandparents to their grandchildren due to the pandemic and lockdowns, and it has continued (like many other Covid habits).

Users

According to GoHenry, 96% of parents say their kids manage their money better because of them. Their users come from a variety of backgrounds and use GoHenry for different reasons:

  • Some use GoHenry because they have financial problems and don’t want their children to make the same mistakes.
  • Others have more resources and want their children to understand the value of money – that it should be earned, spent wisely and can be used to help others.
  • Users also use GoHenry to save money by reducing additional expenses that can often occur when using a traditional allocation system or no allocation at all.

As GoHenry expands into a US market, they are seeing strong demand from customers across the country in all 50 states – their community is connected by a desire to help their children grow up confident in managing their money and of their finances.

“All children from elementary school age and up deserve a financial education that gives them the skills and knowledge to manage their money effectively as adults, regardless of their background. A smart money management app money paired with a debit card and content, nudges and notifications can go a long way in helping kids and teens become financially fit and confident with money,” says Buniak.

Challenges

One of the main early challenges for GoHenry was building trust with parents and children. While educating the market on the necessity of the service, they must demonstrate that they value education as much as parents.

Another challenge was to design a product for a diverse landscape of parents and children of different ages, and life stages are more complex than it seems.

And finally, Bunaik points to best practices as a challenge “we had no best practices to follow and no brands that had come before us to emulate. We pioneered the concept of a monthly subscription in our space which worked well. Now everyone seems to be embracing this concept, not just others directly in our space but also neo-banks.

These challenges have lessened over time as awareness of the need to start financial education young has accelerated.

Competitors:

Another challenge for GoHenry could be the increasingly competitive space for financial literacy apps and products.

  • Guardian – is a goal-based savings and giving platform for kids. It combines the best of goal-based savings platforms like Digit and Acorns with the best of gift registries like Zola and Honeyfund, and doing so. It’s targeting the millennial mom with a platform that empowers families to contribute to kids’ future goals instead of buying them more consumer goods.
  • Poplet – is a family-friendly debit card and app that teaches kids financial skills they can easily understand, practice and remember. A solid foundation of financial skills helps achieve life goals.
  • Oddity– is a financial platform designed for Gen-Z, allowing them to create wealth. Quirk is a completely personalized app, using psychology, gamification and social features, where Gen-Z can learn about, track and grow their money all in one place.
  • Your Juno – is a financial education platform for women and non-binary people focused on Millennials and Gen Z, which we covered last month.

However, the rise of bespoke products, aimed at a wide range of people, and the diversity of companies’ financial needs make the economic literacy space exciting.

For GoHenry, their competitive advantage is to combine a physical product and in-app play money courses. With the introduction and expansion of Money Missionsthis is the only financial education app that offers the theory (the financial education and skills around which Money Missions is centered) and practice (map and app use) in a one-stop package.

Related:

Money Missions

Recently they launched Money Missions (Level 2 will be live in the coming weeks), which are fun, in-app money lessons designed to educate kids and promote better financial literacy.

Missions offers a comprehensive curriculum aligned with national standards for K-12 personal finance education and development with teachers and financial experts. Topics cover: money basics, income, saving, responsible spending, borrowing, credit, investing, money security, and more.

Kids can watch animated videos on money-related topics, take quizzes, and earn XP points and badges while gaining real-world experience with money. As children grow and complete missions, levels are unlocked and adjusted to their age, skills and confidence.

“We know kids learn best by doing – and our customers tell us our product helps them do just that. The combination of banking features for kids with built-in lessons provides a seamless source of knowledge and practice,” says Buniak .

Long term

Their long term plan is simple, making every kid smart with money. They want to continue providing financial education and money management tools to families on both sides of the Atlantic. Therefore, the focus will be on ensuring that we continue to provide a service that meets the financial needs of our customers.

Fun fact: Their cards can be personalized by adding a child’s name and choosing from fun card designs, making learning about money something kids can get excited about. They have exciting partners who have helped create limited edition cards featuring beloved characters. They recently worked with sonic the hedgehog 2 to create a range.