Child finance startup GoHenry enters Europe with Pixpay acquisition

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GoHenrya British financial education app and provider of prepaid debit cards for kids, expanded to Europe for the first time since acquiring a French startup. pixpey. The terms of the deal were not disclosed.

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Founded in London in 2012, GoHenry has become one of the leading fintech companies for kids, targeting kids aged 6-18 with a digital platform that allows parents to allocate and control funds while their kids learn how to budget. and get an idea of ​​their shopping habits. GoHenry expanded into the US back in 2018, and today the company claims more than two million users in those two markets — it also says that one-sixth of 12-year-olds have a GoHenry debit card.

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Pixpay, for its part, was founded less than three years ago in Paris and is similar offer for GoHenry but with more attention to children a little older, starting from the age of 10. The company entered the Spanish market back in November, helping to bring its membership to almost 200,000 in the two markets.

GoHenry goes to Europe

In many ways, the Pixpay acquisition is the ideal vehicle for GoHenry to expand its horizons. So far, the US has always been a priority for him after the domestic market, and when GoHenry raised $40 million in funding, 18 months ago The message at the time was mostly about continued expansion in the UK and US, but GoHenry CEO Alex Zivoder told TechCrunch that Europe was never far from his thoughts.

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“When we launched in the UK in 2012, we pioneered a new category in fintech, and so we had to develop an entire category from scratch because there was no one to learn from before us,” he said. “Once we decided we were ready for international expansion, our time in Europe was always part of the plan. Our first step was the US launch, which we did in early 2018 and saw triple digit year-on-year growth. Following our funding round in December 2020, we have been looking for the right opportunity to expand in Europe.”

GoHenry: mobile app and prepaid debit card

While GoHenry has largely had to build itself from the ground up in the US, it is clear that it is taking a very different approach to markets closer to home, and there are many benefits to buying a well-known brand with support, as was the case with Pixpay. perhaps chief among them is that GoHenry doesn’t have to care as much about hiring, localizing, and running campaigns. Indeed, GoHenry has said it has no plans to integrate the two companies, with their respective brands, leadership teams and headquarters remaining the same.

“Pixpay is a recognized leader in teen banking in France and Spain and a trusted brand. The acquisition of Pixpay made sense to help accelerate growth in Europe, improve our competitive edge and strengthen our global leadership position,” said Zivoder.

However, this does not mean that at some point there will be no pooling of resources.

“Because Pixpay is exclusively focused on teenagers and GoHenry caters to children ages six and up, this acquisition will allow us to combine our expertise in financial education for the benefit of our members,” Skinner added.

PixPay mobile application

show me money

GoHenry claims strong growth in 2021, saying its revenue has more than doubled to $42 million, which Zyvoder attributes to, you guessed it, the pandemic.

But what is the correlation? Well, while the company’s main offering is essentially a financial management product that helps parents give their kids some financial independence, it also has a lot to do with education. Through GoHenry, kids can learn how to budget, and there are also so-called “money missions” that give mini-lessons on all things financial.

Add to that the broader public move away from cash, a move that has accelerated over the past couple of years, and it looks like GoHenry was well placed to capitalize.

“Financial education is an essential life skill and a secular trend, period,” said Skinner. “But during the pandemic, the need to teach kids how to handle money in a cashless world, reinforced by social distancing measures and school closures, is driving more and more people online, and many shopkeepers are still no longer accepting cash.”

Money Missions: GoHenry teaches kids how to handle money

The acquisition of Pixpay makes sense for GoHenry in terms of implementing expansion plans without having to start from scratch in new markets. With the deal, GoHenry immediately gets two more markets under its wings, with two more scheduled for later this year as Pixpay prepares to launch in Italy and Germany.

And from a Pixpay perspective, it also makes sense, given that GoHenry already has significant exposure in two major markets and ten times as many members as Pixpay. Consolidation, not competition, makes life easier for both companies.

“It makes sense to combine our expertise with that of GoHenry to accelerate our growth plans,” Pixpay CEO Benoît Grassin told TechCrunch. “Through our shared values ​​and ambition, we believe that this association with GoHenry will allow us to move faster and further than if we were acting on our own.”

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