Z1, a Brazilian startup that offers a digital account for teenagers, announced an investment of 10 million dollars (55 million reais) this Wednesday, 24. With the check, the company's proposal is to expand financial education for young people of the generation Z, especially those aged between 13 and 17 years. The round was led by the Latin fund Kaszek, which has also participated in major contributions to unicorns such as Nubank, Kavak, Creditas and QuintoAndar.
In addition to Kaszek, MAYA Capital, Homebrew, Clocktower and Mantis, the fund of DJ's The Chainsmokers, also participated.
Z1 was founded in 2020 by entrepreneurs Thiago Achatz, Mateus Craveiro, Sophie Secaf and João Pedro Thompson with the mission of facilitating access to finance for Generation Z youth. For this, the startup offers a digital account and card with reduced rates and lines accessible to this audience. The purpose, according to the founders, is to make teenagers achieve financial independence without any hitches along the way.
Behind the desire to encourage financial autonomy for teenagers and young people is also the attentive look at the potential that this public has to dictate the new rules of the market. By 2031, they are expected to surpass millennials in income, Bank of America estimates show. Currently, Generation Z youth also make up 30% of the Brazilian population. Together, these people move 15 billion dollars a year.
“Our client is the teenager, not their parents. Our product is different because it is designed for this teenager, their ways of thinking and what they really need to learn to deal with money and financial responsibilities”, says Thompson, one of the founders.
In essence, what Z1 has been offering, since January 2021, is the first contact with the financial universe, with a digital account and a prepaid card. The monthly fee of 10 reais, which was charged only in the months when the service is used, will now no longer exist.
According to Thompson, this decision goes against the perception that the brand must accompany the request of young people who are in contact (often for the first time) with their own money. “It's about autonomy and independence. Access is, in itself, a driver of financial education, but we want to go further”, she says. “Today there are 70 million people of that age and we want to reach all of them. The fees did not make this impossible, but without them, dialoguing with everyone is much simpler”, he says.
On another front, the startup is also betting on creating content about financial education in partnership with influencers and community members on social media, such as TikTok and Instagram, and should further expand this effort, bringing educational content into the bank's application .
The approximation with Kaszek has been happening for a few months, but the Z1 had no intention of extending the previous round, made in March this year and which raised 14 million reais. In that round, the startup won the Y Combinator accelerator, famous for working with tech giants like Airbnb and Rappi. Before that, other weighty investors, such as the MAYA Capital fund and also Ariel Lambrecht and Renato Freitas, founders of 99, have also invested in fintech.
“Now with Kaszek, we have found the right partner for our current moment. Let's put our foot on the accelerator once and for all”, says the founder.
With the new contribution, the main intention of Z1 is to raise the number of customers in the base — at least 10 times in the next year, according to the company's calculations. Entrepreneurs do not disclose the current user base. "We are talking about a level of millions of users soon", he says.
Excluding fees, it seems, should help the startup get there. Even without part of the financial gains that came from these charges, Z1 must maintain its profitability only based on the 1.5% fee paid by the card brand (in this case, Mastercard) for each transaction carried out through the bank.
Even so, the company will not forget the importance of earning money for what it offers. According to the entrepreneur, there will be teams dedicated to finding new sources of revenue within the Z1. “What makes sense for us is to grow the base now, and that's what we'll do with Kaszek's capital,” he says.
To a large extent, the new wave of “millions of users” should allow Z1 a new range of financial products in the future, such as credit and investments, but also products that do not involve payments, such as partnerships with brands that offer benefits to users.
The jump in the number of clients should be accompanied by a growth in the team. The intention is to double the number of employees, from 60 to 120 by the end of the first quarter of 2022, with hiring in the areas of marketing, product and technology. By the end of next year, this number should reach 250. “This round puts us on another level. We want to be the brand of Generation Z and the one that speaks the language of that generation the most”, says Sophie Secaf, one of the founders.
Z1, a Brazilian startup that offers a digital account for teenagers, announced an investment of 10 million dollars (55 million reais) this Wednesday, 24. With the check, the company's proposal is to expand financial education for young people of the generation Z, especially those aged between 13 and 17 years. The round was led by the Latin fund Kaszek, which has also participated in major contributions to unicorns such as Nubank, Kavak, Creditas and QuintoAndar.
In addition to Kaszek, MAYA Capital, Homebrew, Clocktower and Mantis, the fund of DJ's The Chainsmokers, also participated.
Z1 was founded in 2020 by entrepreneurs Thiago Achatz, Mateus Craveiro, Sophie Secaf and João Pedro Thompson with the mission of facilitating access to finance for Generation Z youth. For this, the startup offers a digital account and card with reduced rates and lines accessible to this audience. The purpose, according to the founders, is to make teenagers achieve financial independence without any hitches along the way.
Behind the desire to encourage financial autonomy for teenagers and young people is also the attentive look at the potential that this public has to dictate the new rules of the market. By 2031, they are expected to surpass millennials in income, Bank of America estimates show. Currently, Generation Z youth also make up 30% of the Brazilian population. Together, these people move 15 billion dollars a year.
“Our client is the teenager, not their parents. Our product is different because it is designed for this teenager, their ways of thinking and what they really need to learn to deal with money and financial responsibilities”, says Thompson, one of the founders.
In essence, what Z1 has been offering, since January 2021, is the first contact with the financial universe, with a digital account and a prepaid card. The monthly fee of 10 reais, which was charged only in the months when the service is used, will now no longer exist.
According to Thompson, this decision goes against the perception that the brand must accompany the request of young people who are in contact (often for the first time) with their own money. “It's about autonomy and independence. Access is, in itself, a driver of financial education, but we want to go further”, she says. “Today there are 70 million people of that age and we want to reach all of them. The fees did not make this impossible, but without them, dialoguing with everyone is much simpler”, he says.
On another front, the startup is also betting on creating content about financial education in partnership with influencers and community members on social media, such as TikTok and Instagram, and should further expand this effort, bringing educational content into the bank's application .
The approximation with Kaszek has been happening for a few months, but the Z1 had no intention of extending the previous round, made in March this year and which raised 14 million reais. In that round, the startup won the Y Combinator accelerator, famous for working with tech giants like Airbnb and Rappi. Before that, other weighty investors, such as the MAYA Capital fund and also Ariel Lambrecht and Renato Freitas, founders of 99, have also invested in fintech.
“Now with Kaszek, we have found the right partner for our current moment. Let's put our foot on the accelerator once and for all”, says the founder.
With the new contribution, the main intention of Z1 is to raise the number of customers in the base — at least 10 times in the next year, according to the company's calculations. Entrepreneurs do not disclose the current user base. "We are talking about a level of millions of users soon", he says.
Excluding fees, it seems, should help the startup get there. Even without part of the financial gains that came from these charges, Z1 must maintain its profitability only based on the 1.5% fee paid by the card brand (in this case, Mastercard) for each transaction carried out through the bank.
Even so, the company will not forget the importance of earning money for what it offers. According to the entrepreneur, there will be teams dedicated to finding new sources of revenue within the Z1. “What makes sense for us is to grow the base now, and that's what we'll do with Kaszek's capital,” he says.
To a large extent, the new wave of “millions of users” should allow Z1 a new range of financial products in the future, such as credit and investments, but also products that do not involve payments, such as partnerships with brands that offer benefits to users.
The jump in the number of clients should be accompanied by a growth in the team. The intention is to double the number of employees, from 60 to 120 by the end of the first quarter of 2022, with hiring in the areas of marketing, product and technology. By the end of next year, this number should reach 250. “This round puts us on another level. We want to be the brand of Generation Z and the one that speaks the language of that generation the most”, says Sophie Secaf, one of the founders.