GoHenry, the UK-based financial education app and prepaid debit card provider for kids, expanded into Europe for the first time with the acquisition of French startup Pixpay. The terms of the contract are not disclosed.
Founded in London in 2012, GoHenry has become one of the preeminent fintech companies for kids, targeting 6-18 year olds with a digital platform that allows parents to allocate and control funds, while their children learn to budget and gain insight into their spending habits. GoHenry expanded to the United States in 2018, and today the company claims over two million users in both 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 a similar proposition to GoHenry but with more emphasis on slightly older children, from 10 years old. The society had expanded into Spain in November, helping to bring its membership to nearly 200,000 in both markets.
GoHenry goes to Europe
In many ways, the acquisition of Pixpay is the perfect vehicle for GoHenry to expand its horizons. The United States, until now, has always been its priority after its 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 United Kingdom and the United States. But GoHenry CEO Alex Zivoder told TechCrunch that Europe was never far from his thoughts.
“When we launched in the UK in 2012, we launched a new category in fintech, so we had to develop a whole category from scratch with no one to learn from before 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 United States, which we did in early 2018 and saw triple-digit year-over-year growth. Following our financing round in December 2020, we were looking for the right opportunity to expand in Europe.
While GoHenry has pretty much had to build itself from the ground up in the US, it’s clearly taking an entirely different approach for markets closer to home – and there are plenty of benefits to buying an established brand with traction like it did with Pixpay, perhaps the main one is that GoHenry doesn’t have to worry so much about hiring, locating, and launching campaigns. Indeed, GoHenry said it has no plans to integrate the two companies, with their respective brands, management teams and headquarters remaining as is.
“As an established leader in teenage banking in France and Spain and a trusted brand, acquiring Pixpay made perfect sense to help accelerate growth in Europe, improve our competitive advantage and solidify our global leadership position” , said Zivoder.
That’s not to say there won’t be a pooling of resources at some point, though.
“With Pixpay focused solely on teens and GoHenry targeting children as young as six years old, this acquisition will allow us to combine our expertise in financial education for the benefit of our members,” added Zivoder.
show me the money
GoHenry is touting strong growth for 2021, saying its revenue has more than doubled to $42 million, which Zivoder attributes to — you guessed it — the pandemic.
But what is the correlation there, exactly? Well, while the company’s core offering is essentially a money management product that helps parents give their kids some financial independence, it’s also a lot about education. Through GoHenry, kids can learn how to budget, while there are so-called “money missions” that offer mini-lessons in all things finance.
Add to that a broader societal shift away from cash, a move that has accelerated over the past couple of years, and it looks like GoHenry was well positioned to capitalize.
“Financial education is a crucial life skill and an age-old trend, period,” Zivoder said. “But during the pandemic, the need to teach children how to be good with money in a cashless world, amplified by social distancing measures and school closures is pushing more and more people online, and many shop owners are still not accepting cash anymore.”
The acquisition of Pixpay makes sense for GoHenry in terms of fueling its expansion plans without having to start from scratch in new markets. With this deal, GoHenry immediately has two more marketplaces under its wing, with two more planned later this year as Pixpay prepares to launch in Italy and Germany.
And from Pixpay’s perspective, that also makes sense, given that GoHenry already has a significant presence in two massive markets and ten times the membership of Pixpay. Consolidation – rather than competition – makes life easier for both companies.
“It made sense to combine our expertise with that of GoHenry to boost our growth plans,” Benoit Grassin, CEO of Pixpay, told TechCrunch. “With shared values and ambitions, we believe that this combination with GoHenry will allow us to go faster and further than if we had operated alone.”