Greenlight, the startup that provides a debit card for children in which funds can be reloaded from a mobile app and places restrictions on the merchants at which children can make purchases, has raised $7.5 million in funding.
According to a report in TechCrunch, the round of funding came from Relay Ventures, Social Capital, New Enterprise Associates (NEA) and TTV Capital. The company, which has been in the market for under six months, has 10,000 paying customers. The capital raised will go to expand the number of employees and gain more customers. The startup was created in part because cofounder and Chief Executive Tim Sheehan was looking for ways to give his kids money to spend when he didn’t have any cash on him. After polling other parents and realizing he wasn’t alone, he launched the company.
With the Greenlight debit card, partners have complete control and transparency about how the debit card is used. The mobile app not only provides account information but also transaction data. Parents pay a fee each month to transfer money into the account, get alerts when purchases are made and set controls as to where the child or children can shop. The cards can easily be frozen via the app if it is lost or stolen. The fee is $4.99 a month and geared toward parents with children age 8 through 18. For the $4.99 a month, families get up to five debit cards. Greenlight earns money from the subscriptions and interchange fees from transactions that are completed with the card, noted TechCrunch.
Greenlight isn’t the only company going after families with a debit card. In May startup Current launched a new app aimed at helping parents give kids their allowance. According to another report in TechCrunch, Current offers customers a Visa debit card that lets teenagers purchase things in stores or on the internet using money from their own bank account that they get via allowance for doing chores. The money is transferred from the parents’ bank account to their children’s accounts and the app. Parents can use the mobile app that accompanies the debit card to set a list of chores, track the spending of their children, encourage their kids to save and teach their children how to manage money.