GoHenryUK-based financial education and prepaid debit card app for kids has expanded to Europe for the first time with the acquisition of French startup pixpay† The terms of the deal have not been disclosed.
Founded in London in 2012, GoHenry has emerged as one of the leading children’s fintech companies, targeting six to 18-year-olds with a digital platform that allows parents to allocate and manage money, while helping their kids learn to budget and gain insight. in their spending habits. GoHenry expanded into the US in 2018, and today the company claims more than two million users in these two markets — it also says that one-sixth of 12-year-olds now have a GoHenry debit card.
Pixpay, for its part, was founded in Paris less than three years ago and is similar to GoHenry, but with more focus on slightly older children, from 10 years old. The company had expanded to Spain in November, bringing membership in the two markets to nearly 200,000.
GoHenry goes to Europe
In many ways, the Pixpay acquisition serves as the ideal vehicle for GoHenry to broaden its horizons. The US has so far always been her priority after the domestic market, and when GoHenry raised a $40 million funding round 18 months ago, the message at the time was very much about continued expansion in the UK and US. But GoHenry CEO Alex Zivoder told londonbusinessblog.com that Europe was never far from his mind.
“When we launched in the UK in 2012, we pioneered a new category in fintech and therefore had to build an entire category from scratch with no one to learn from for us,” he said. “Once we decided we were ready 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 have experienced triple digit year-over-year growth. After our financing round in December 2020, we were looking for the right opportunity to expand into Europe.”
While GoHenry has had to rebuild itself pretty much from scratch in the US, it’s clear that it’s taking an entirely different approach to markets closer to home – and there are many benefits to buying from an established brand with traction as it has done with Pixpay, perhaps the most important of these is that GoHenry doesn’t have to worry as much about hiring, localizing, and launching 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 a trusted brand, the acquisition of Pixpay made perfect sense to accelerate growth across Europe, improve our competitive advantage and strengthen our global leadership position,” said Zivoder.
However, that’s not to say that resource pooling won’t happen at some point.
“With Pixpay focused solely on teens and GoHenry for kids ages six and up, this acquisition allows us to combine our expertise in financial education for the benefit of our members,” added Zivoder.
Show me the money
GoHenry touts strong growth for 2021 and claims sales have more than doubled to $42 million, something Zivoder attributes to — you guessed it — the pandemic.
But what exactly is the correlation there? While the company’s core offering is essentially a financial management product that helps parents give their kids some financial independence, it’s also very much about education. GoHenry allows kids to learn how to budget, while there are so-called “money missions” that give mini-lessons on all things finance.
Throw into the mix a broader societal shift away from cash, a move that has accelerated in recent years, and it seems that GoHenry was well positioned to capitalize.
“Financial education is a vital life skill and a secular trend, period,” Zivoder said. “But during the pandemic, the need to teach children how to manage money well in a cashless world has been amplified with social distancing measures and school closures causing more and more people to go online, and many shop owners are still not accepting cash. ”
The acquisition of Pixpay makes sense for GoHenry to enable its expansion plans without having to start from scratch in new markets. With this one deal, GoHenry has two more markets under its belt immediately, and two more scheduled for later this year, as Pixpay gears up to launch in Italy and Germany.
And from Pixpay’s perspective, it makes sense too, given that GoHenry already has a significant foothold 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 that of GoHenry to drive our growth plans,” Pixpay CEO Benoit Grassin told londonbusinessblog.com. “With shared values and ambitions, we believe this combination with GoHenry will allow us to go faster and further than if we had operated alone.”