Download Gohenry App

Since migrating 99% of its services to Google Cloud, gohenry, the prepaid Visa debit card and app designed exclusively for 6-18-year-olds, doubled its customer base between 2018 and 2020, reaching one million customers. It also sharply increased its revenue year-on-year with latest reports showing an annual turnover of 13 million in 2019 as families increasingly look to cashless solutions to help children become skilled in money management.

gohenry is now leveraging several services within Google Cloud including Google Kubernetes Engine, Google Cloud Composer, Google Cloud Storage and BigQuery along with additional management tools like Terraform, which are allowing the company to manage its quality of services to be automatically scaled as required. Experts from Rackspace Technology have provided gohenry with a custom multicloud environment - a hybrid set up which allows them to connect public cloud environment to private cloud to securely support their payments application.

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Additionally, by working with Rackspace Technology, gohenry has improved its cost optimisation by only provisioning the required resources, enabling automated alerts for unusual spikes in usage and analysing insights to support improved cost savings in the future.

gohenry has plans to automate further functionalities that it has implemented with Google Cloud. This will support its move towards a cloud native approach that will empower it to be more innovative and agile in the future as the team continually develops new banking solutions that meet the changing expectations of customers.

Since gohenry and Fitbit ace are intended for kids, this would be a great little thing. Kids can use a more kid friendly version of Fitbit pay with their gohenry cards. They will not be able to view their statement or make savings on the fitbit app but on the gohenry app. On the watch, they can check their balance and freeze the card. Perfect if you don't want your kids using your phone all the time to check their balance.

One of the aims of the gohenry card is to teach children good money skills and habits, and this includes spending abroad. For this reason, the card can be used for free for purchases and ATM withdrawals internationally - anywhere that Visa is accepted.

Financial apps for children, teens and young adults is a hot business right now. Away from the limelight, a crop of junior banking apps raised some substantial funds. Just in the last few months, gohenry, a UK pioneer that has expanded to the US raised its first venture round of 40 million. In the US, Greenlight reached a unicorn status having raised $215 million. Just this month, hot off the press startups Current and Step raised $130 million and $50 million respectively.

Last year, gohenry had just a touch less than 1 million customers of which slightly more than half were children whose accounts are priced. Despite having 5% of the market share in the UK, the revenue last year was 13 million, up from 8 million a year earlier (Revolut made ~160 million, TransferWise - 300 million).

Using children account numbers, the annual revenue per child came at 24, of which 18 is from subscriptions. The maximum subscription revenue is 36 per year, so at 18, gohenry converts 50% of its customers into paying subscribers.

Subscription allows for a healthy gross profit margin of 40%, but add to that customer acquisition costs, and depending on the growth plan, it is hard to see profitability in sight. gohenry in fact announced that they are profitable, but with 40 million funding they will be spending a lot on marketing.

For a subscription based business, one of the key measures is a ratio of lifetime value to customer acquisition costs. Industry benchmark of LTV:CAC is 3:1. Last year on average, gohenry spent 20 per new child account. Assuming an average tenure of 6 years, and gross profit per customer of 10, LTV to CAC for gohenry equals 3:1.

gohenry grew to 1.2 million customers and has 5% market share in the UK. Unusually gohenry bootstrapped to profitably which they reached in March. The company was financed by friends, family and public crowdfunding before raising its first venture round last month.

gohenry, the oldest of the pack having launched eight years ago would probably have the best historical data on churn. Having an age range of 6-18, the average lifetime of an active customer is probably less than 10 years. In fact, by the time children reach teenage years, they might switch to the cool brands a la Step and Current. So the effective lifetime will probably get lower, at 5-7 years.

Recent funding of 40 million will be dedicated to grow the US business. In the annual report, on average gohenry spent 20 per new user last year. Assuming that gohenry spends 20 million at the same cost of acquisition, they will add 1 million customers. With limited monetisation, it is not exactly the scale that would pay out on 40 million investments.

The path forward may be the one pursued by Greenlight. Citi bank, an investor in gohenry, already operates a program called Kindergarten to College, a platform managing San Francisco child savings accounts designed to help public school kids save up for college. There might be a natural synergy with gohenry.

Financial apps for children, teens and young adults is a hot business right now. Away from the limelight, a crop of junior banking apps raised some substantial funds. Just in the last few months, gohenry, a UK pioneer that has expanded to the US raised its first venture round of \u00A340 million. In the US, Greenlight reached a unicorn status having raised $215 million. Just this month, hot off the press startups Current and Step raised $130 million and $50 million respectively.

Most of the apps are designed to teach kids money, so there are things like spending blocks, and daily allowances that can\u2019t be exceeded. For example, gohenry\u2019s spending limit stands at 10 transactions per day or \u00A345 per transaction. Greenlight sets the monthly spending limit at $5k. As a result, the opportunities to earn transaction fees are small.

Companies House is a gift that keeps on giving. I retrieved gohenry\u2019s 2019 annual report which allowed for the sneak peek into its financials and user economics. I believe that it is broadly representative of the industry (US market has higher transaction fees).

Last year, gohenry had just a touch less than 1 million customers of which slightly more than half were children whose accounts are priced. Despite having 5% of the market share in the UK, the revenue last year was \u00A313 million, up from \u00A38 million a year earlier (Revolut made ~\u00A3160 million, TransferWise - \u00A3300 million).

Using children account numbers, the annual revenue per child came at \u00A324, of which \u00A318 is from subscriptions. The maximum subscription revenue is \u00A336 per year, so at \u00A318, gohenry converts 50% of its customers into paying subscribers.

There is no breakdown of revenue, but I extrapolated transaction revenue from transaction costs, which came to \u00A36 per child per year. Children just don\u2019t spend a lot. gohenry announced that customers spent \u00A3100 million last year, which translates on average to \u00A3140 per child per year.

Subscription allows for a healthy gross profit margin of 40%, but add to that customer acquisition costs, and depending on the growth plan, it is hard to see profitability in sight. gohenry in fact announced that they are profitable, but with \u00A340 million funding they will be spending a lot on marketing.

For a subscription based business, one of the key measures is a ratio of lifetime value to customer acquisition costs. Industry benchmark of LTV:CAC is 3:1. Last year on average, gohenry spent \u00A320 per new child account. Assuming an average tenure of 6 years, and gross profit per customer of \u00A310, LTV to CAC for gohenry equals 3:1.

Recent funding of \u00A340 million will be dedicated to grow the US business. In the annual report, on average gohenry spent \u00A320 per new user last year. Assuming that gohenry spends \u00A320 million at the same cost of acquisition, they will add 1 million customers. With limited monetisation, it is not exactly the scale that would pay out on \u00A340 million investments.

\u201Cgohenry is catering to millions of parents who are looking to raise smart, financially literate children but are currently underserved by existing solutions. We\u2019re thrilled to partner with Alex and the gohenry management team on this next milestone in their growth journey and look forward to realising their ambitions to improve the financial fitness of kids across the globe.\u201D

Torch Partners acted as strategic and financial adviser to gohenry, a global leader in building healthy financial habits for kids, on its $40m growth equity financing led by Edison Partners, with investment from Gaia Capital Partners, Citi Ventures and Muse Capital.

As a pioneer in the family finance space, gohenry has built a community of more than 1.2 million parents and children who are invested in learning the vital skill of being good with money. The company has doubled its customer base annually over the past six years and achieved profitability in March 2020. gohenry is the market leader in the U.K. and is growing rapidly in the U.S. following 2018 launch. gohenry plans to use the new funding to accelerate the expansion of its combined edtech and fintech solution across the U.S. 2351a5e196