GoHenry, the UK-based financial education app and prepaid debit card provider for kids, is expanding into Europe for the first time with the acquisition of French startup Pixpay. The terms of the deal were not disclosed.
Founded in London in 2012, GoHenry has grown into one of the preeminent fintech companies for children, targeting 6-18 year olds with a digital platform that allows parents to allocate and control funds while their children learn , how to budget and get insights into their spending habits. GoHenry expanded into the US back in 2018, and today the company claims more than two million users across those two markets — it’s also said that one in six 12-year-olds now has a GoHenry debit card.
For its part, Pixpay was launched less than three years ago in Paris and is a similar offering to GoHenry, but with a stronger focus on slightly older children aged 10+. The company had already expanded into Spain in November, helping to increase its membership to nearly 200,000 across the two markets.
GoHenry goes to Europe
In many ways, the acquisition of Pixpay serves as an ideal vehicle for GoHenry to broaden its horizons. The US has always been his priority after his home market, and when GoHenry raised a $40 million funding round 18 months ago, the message at the time was very strong of continued expansion in the UK and US, but GoHenry CEO Alex Zivoder told TechCrunch that Europe was never far from his thoughts.
“When we launched in the UK in 2012, we were pioneers of a new category in fintech and so had to build a whole category from scratch without learning from anyone before us,” he said. “When we decided to expand internationally, our timing in Europe was always part of the plan. Our first step was to launch in the US, which we did in early 2018 and experienced triple-digit year-over-year growth. After our funding round in December 2020, we were looking for the right opportunity to expand into Europe.”
GoHenry: Mobile app and prepaid debit card
While GoHenry has practically had to build itself from the ground up in the US, it’s clear that it’s taking a radically different approach to markets closer to home – and there are plenty of benefits to buying an established brand with traction, like Pixpay’s case was. Perhaps the most important among them is that GoHenry doesn’t have to worry so much about hiring, localization, and launch campaigns. Indeed, GoHenry said it has no plans to integrate the two companies, leaving their respective brands, leadership teams and headquarters as they are.
“As an established leader in teen banking in France and Spain, and as a trusted brand, the acquisition of Pixpay made perfect sense to accelerate growth across Europe, enhance our competitive advantage and solidify our global leadership position,” said Zivoder.
That doesn’t mean, however, that there won’t be a pooling of resources at some point.
“With Pixpay solely focused on teenagers and GoHenry targeting children as young as six, this acquisition will allow us to combine our expertise in financial literacy for the benefit of our members,” added Zivoder.
Pixpay mobile app
show me the money
GoHenry is touting strong growth for 2021, claiming its sales more than doubled to $42 million, which Zivoder attributes to — you guessed it — the pandemic.
But what exactly is the connection? Well, while the company’s core offering is essentially a financial management product that helps parents give their children some financial independence, it’s also very much about education. Through GoHenry, kids can learn how to set up a budget, while there are so-called “Money Missions” that offer mini-lessons on all things financial.
Add to that a broader societal shift away from cash, a movement that’s accelerated in recent years, and it seems GoHenry was well-placed to capitalize on it.
“Financial literacy is a crucial life skill and a secular trend, period,” Zivoder said. “But during the pandemic, the need to teach children how to be smart about money in a cashless world has been compounded by social distancing measures and school closures, pushing more people online, and many shopkeepers are still not accepting cash.”
Money Missions: GoHenry teaches kids money skills
The acquisition of Pixpay makes sense for GoHenry to fuel its expansion plans without having to start from scratch in new markets. With this one deal, GoHenry has two more markets under its wing right away, and two more are planned for later this year as Pixpay prepares to launch in Italy and Germany.
And from a Pixpay perspective, it makes sense, too, since GoHenry already has a strong presence in two huge markets and ten times as many members as Pixpay. Consolidation – instead of competition – makes life easier for both companies.
“It made sense to combine our expertise with GoHenry’s to drive our growth plans,” Benoit Grassin, CEO of Pixpay, told TechCrunch. “With shared values and ambitions, we believe this combination with GoHenry will allow us to go faster and further than if we were operating alone.”
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