Mobile-only bank Osper has raised $10 million in funding

Keeping control of your finances can be a challenge at the best of times. Keeping control of your finances as a child is something that probably doesn’t even enter your mind. Nonetheless, that doesn’t mean that kids shouldn’t have financial tools at their disposal if they are inclined to keep an eye on their spending, or if parents want an alternative to handing over cash. Indeed, it’s this lack of tools that Osper, a mobile-first bank for 8 – 18 year olds in the UK, is hoping to solve. Announced today, Osper is essentially a banking service made up of a prepaid debit card which links to iOS or Android app. The child can then, as you might expect, withdraw cash, make online purchases, subscribe to subscription services and everything else you’d do with a normal debit card. On the app side, rather than simply providing a statement of incomings and outgoings for the user, it also provides a separate login for parents, just so you can keep an eye on things.

Osper, a new UK startup, has come up with an innovative way to create a banking service than can be used by children, combining prepaid debit cards and smartphone apps controlled by both them and their parents. The approach could potentially reach a market underserved by most banks, but which may also be embraced by parents keen to educate their children early on about how to manage money. The startup has also announced it’s closed a $10m (£6m) funding round, led by London’sIndex Ventures (which has backed SoundCloud and Etsy among others). Previously Osper had raised a seed round of £800,000 in June last year as an alumni of the Techstars Londonaccelerator. The cash will be used by founder Alick Varma to launch the service out of beta, roll out in the UK and eventually expand abroad. It’s also enrolled the backing of major UK TV celebrity, Davina Mccall. Other investors include Horizons Ventures (Li Ka-Shing’s venture capital arm – investor in Spotify, Facebook and Skype); Peter Jackson (CEO of Travelex), and Darren Shapland (ex-Chairman of Sainsbury’s Bank); as well as the entrepreneurs behind businesses including Streetcar, Lastminute.com, Jawbone, SoundCloud, Skyscanner and Funding Circle. Aimed at the UK’s seven million 8-18 year olds (a 43 million-strong market in the US) Osper is a mobile-only, branchless, banking service. Its pre-paid debit card is ratified and backed by MasterCard and comes with a simple mobile app (Android or iOS), which has separate logins for the young person and their parents. The accounts have no credit or over-draft so the child or teenager can only spend what they have. The Osper Cards are free for the first year, and then cost £10 per year thereafter. The distinct orange card can be used in stores, for cash withdrawals at ATMs and for online purchases and service subscriptions such as Amazon and iTunes.