Atlanta-based fintech Greenlight became the U.S.’s latest unicorn Thursday, announcing a US$215-million investment round valuing the company at US$1.2 billion. 

The raise, led by Canapi Ventures and TTV Capital, is a boon to Toronto-based Relay Ventures, which in 2017 led Greenlight’s US$7.5-million seed round and which remains one of its biggest shareholders.

Greenlight’s products are focused on financial management for kids. Since launching its children’s debit card in 2017, it’s amassed about two million customers who have collectively saved more than US$50 million in their Greenlight accounts. Its previous investors include JPMorgan Chase, Wells Fargo and the Amazon Alexa Fund. 

With its new financing, the firm plans to grow its workforce—currently about 180 employees—and launch an investment vehicle for kids in the fourth quarter of this year. The latest round brings its total funding to over US$296 million. 

Alex Baker, a partner at Relay—which is an investor in The Logic—became Greenlight’s first institutional investor in 2017. The startup had about 12,000 users at the time, each paying a monthly fee. “Almost every other fintech we looked at that was consumer-focused was free, and these guys were charging US$5 a month, and they were getting it on great conversion rates,” said Baker. 

Relay has participated in all three funding rounds since leading Greenlight’s seed financing. “Our goal is to be life-cycle investors and participate in every round of investing,” said Baker. “We get the most leverage out of our investment by being able to invest at the riskiest stage and basically own the most for the least amount.” Baker declined to disclose how much Relay contributed to the latest round, or the value of its ownership stake in the startup. 

Relay, which has offices in Toronto, Calgary and San Francisco, focuses on early-stage companies. The 12-year-old venture capital firm raised its last fund in 2016 at $200 million, and has $600 million in assets under management. Its investments include home-security firm ecobee, legal-tech startup Blue J Legal and electric-scooter company Bird. 

Parents can use the Greenlight app to monitor how much and precisely where their kids can spend money with their cards. Kids can also monitor their spending using the app, set savings goals and request money transfers from their parents. Parents can also pay their kids interest on their savings. The forthcoming investment tool will let kids buy and sell partial shares in publicly listed companies, which parents will also have to approve. 

“We’re trying to create generations of financially smart adults, and the way we’re going about it is helping parents teach their kids healthy financial habits at a young age,” said Greenlight co-founder and CEO Timothy Sheehan. “They will take those habits with them to adulthood, and that is likely going to lead to them being financially literate, financially confident, and, hopefully, financially successful.” 

Several money-management tools for kids have entered the market since Greenlight launched in 2014. A New York-based fintech called Current launched a debit card for teens in 2017 that parents can load through allowance money and transfers using an app. BusyKid is another prepaid card, to which parents can transfer money after their kids confirm they’ve completed their chores. Palo Alto-based Step also offers mobile banking services for teens; the startup has raised US$26.3 million, according to Crunchbase, since launching in January 2019. Baker said adding products like its forthcoming investing tools helps give Greenlight an edge over its competitors.

While the company has explored the possibility of expanding outside the U.S., including into Canada—“they’ve been up here a couple times meeting with several of the banks,” said Baker—the company has room to grow in the U.S. for the near term. “We don’t want to be distracted right now outside the U.S.,” he said. “When you’re growing hundreds of thousands of new users a month, it’s hard to say you want to focus on any other geography.”