GoHenry is a rapidly growing online banking tool targeting consumers with young children and teens in the U.S. and United Kingdom. The 5-year-old company charges consumers a fee for an app with unique parental controls linked to a debit card for each child. Over half-a-million customers have joined goHenry, which is offered free for one month and then costs $3.99 per child per month, according to goHenry’s website. In 2018, the startup revealed its goal to reach 15% of the addressable market in both countries, which could boost goHenry's customer base to 6.6 million child accounts valued at $328 million, per Crowdfund Insider. Revenue rose to an estimated $10.6 million last year.

Crowdfunding World Record

GoHenry is has been highly successful in raising money. Founded in 2012, the U.K.-based company is backed by its own customers, management team, co-founders and a network of angel investors, including CEOs from private and public internet companies, according to the company’s website.

Crowdfunding has also played a role. The company broke an equity crowdfunding world record in 2016 with $5.6 million raised on Crowdcube, quickly reaching its funding target. In 2018, the firm broke another record with $8.1 million raised, including more than $3 million which came from the platform’s users. According to Crowdfund Insider, the October 2018 round raised money from more than 3,300 investors. The company’s pre-funding valuation was pegged at roughly 58 million pounds, or $75.7 million. The company since then has not published an estimate of its market value or if it plans to go public.

How The App Works

That success stems from parents' increasing desire to keep track of and control their children's spending. Individuals are able to log onto their goHenry account through a mobile app or via the company’s website. The main goHenry user, the parent, has an online account that is linked to an account for each of their children, who all get their own goHenry pre-paid Visa debit cards with parental controls. Since only the money on the cards can be spent, there is no risk of running debt on the card or getting hit with overdraft fees.

GoHenry allows parents to tailor limits and rules for each of their children, including setting weekly spending limits, deciding where the card can be used and when to lock and unlock cards. The service also offers real-time spending notifications. Children and teens can also access budgeting tools, view their finances in graph formats, and earn extra money by doing set tasks and chores.The company says a key benefit of goHenry is that it helps children to build financial skills and learn about earnings, savings, spending and giving.

GoHenry's CEO

GoHenry is led by CEO Alex Zivoder, a London-based father of two. Before taking the helm at goHenry in June 2015, Zivoder held management positions at online education company Lynda.com. He has also served as COO of online ticketing marketplace viagogo, and senior VP at online travel vendor Expedia Inc.

Robust Revenue Growth

According to Crowdfund Insider, goHenry posted significant revenue growth in recent years, upping its top line by 117% in 2017 to 6.1 million pounds ($8 million). In 2017 EBITDA came in at negative 677,000 pounds ($884,000). According to a Finextra report, the business forecast revenue to grow to 8.1 million pounds ($10.6 million) for full year 2018.

Consumer Criticism

On TrustPilot, consumers on average give goHenry a 4-star rating, yet the company is not without critics. Out of 1,210 reviews, 5% of costumers rated goHenry’s services at below average. Complaints included: funds withdrawn without authorization, accounts closed without notice, criticism the platform is more complicated than expected for children, among other issues.

Challenges Ahead

GoHenry's competitors include U.K.-based Osper and RoosterMoney, and Australia-based Spriggy. But according to Zivoder, goHenry’s biggest challenge hasn’t been its competitors, but rather creating a market for its service. GoHenry's concept is relatively unique compared to other online financial platforms by targeting parents who want to manage allowances and provide financial education for their children. Prospective parent customers often weren't looking for it on Internet search engines when GoHenry first launched.

Warren Mead, banking partner at KPMG, says that a key challenge that startups and smaller firms in the banking space face is winning over customers. “Just 2% of banking customers switch current accounts each year, while 30% switch their car insurance,” he stated, per The Guardian. “Significant investment is also required, usually, and you must have a genuinely appealing idea, of course."

GoHenry's rapid revenue and user growth indicates that, for the moment, that its product may have broad appeal longterm.