A top Youtube creator is officially expanding his media empire into financial services by buying a fintech app.
James "Jimmy" Donaldson, known by his YouTube moniker MrBeast, acquired the teen-focused financial wellness app Step through his media holding company Beast Industries. The purchase was announced on Monday, and no financial details were disclosed.
"Financial health is fundamental to overall wellbeing, yet too many people lack access to the tools and knowledge they need to build financial security," said Jeff Housenbold, CEO of Beast Industries, in a company statement. "This acquisition positions us to meet our audiences where they are, with practical, technology-driven solutions that can transform their financial futures for the better."
Step Mobile, a financial wellness and mobile banking fintech app, is designed for young people ages 13 to 18 to manage their money and build credit scores without standard banking fees. The app's last valuation in 2021 was reportedly
""There are a lot of synergies between Step and what Jimmy, Jeff and the team at Beast Industries believe in when it comes to helping people and giving back," said Step founder and CEO CJ MacDonald in a statement. "We're excited about how this acquisition is going to amplify our platform and bring more groundbreaking products to Step customers."
Dylan Lerner, senior analyst for digital banking at Javelin, told American Banker that the acquisition is an official entrance into financial services for Beast Industries following a series of trademark filings last fall. Beast Holdings, LLC filed two applications last October with the US Patent and Trademark Office to trademark
"We've seen influencers and celebrities involved in fintechs and neobanks," Lerner said. "However, I don't think we've seen a combination like this before. Neither is a new or fledgling brand/company."
Beast Industries also received a
"We look forward to exploring ways to further collaborate and incorporate DeFi [decentralized finance] into our upcoming financial services platform," said Housenbold in a statement at the time.
Lerner affirmed that the recent funding from Bitmine suggests further ties to DeFi for Beast Industries, but qualified that it is not yet clear if or how the acquisition of Step will connect to a future digital assets strategy.
Theodora Lau, founder of Unconventional Ventures, believes that MrBeast's massive following and brand trust by Gen Z could provide Step with a growth and distribution boost if enough of the 466 million subscribers on the MrBeast YouTube channel start using the product.
"If this works, we should expect more financial institutions to explore partnerships with creators around co-branded products and content via the creators' channels," she told American Banker. "Could this also present a new exit strategy for fintechs?"
For Beast Industries, buying a fintech app is a very different approach from making financial literacy videos on YouTube. Should the venture succeed, according to Lau, it could initiate renewed discussions around consumer trust in the finance industry.
"Banks have long held the belief that they have the upper hand because of the inherent trust that consumers place in banks," she said. "But if a YouTuber with a massive following succeeds in bringing people on board and being an active part of the Step ecosystem, then perhaps it's soul searching time."
Lerner, on the other hand, said that it's not uncommon for young consumers to "outgrow" neobanks as they get older and their financial needs become more complex.
"Fintechs should take note but also understand that celebrity endorsements, or even ownership, won't necessarily solve the broader challenges they face," he said. "Tying in influencers and creators can rapidly grow a brand and attract the attention of younger audiences, but you also need a compelling banking and finance platform to support that initiative."
Step's current banking partner, Evolve Bank and Trust, provides FDIC insurance and issues the Step credit card. Evolve, which works with a number of fintechs to provide them with banking services, is currently
It is unclear how the acquisition by Beast Industries will affect the current sponsor bank partnership between Step and Evolve Bank.
"Things will likely stay status quo in the near-term barring anything contractual like termination clauses," Lerner said. "You don't just switch sponsor banks overnight. Evolve could benefit from Step's MrBeast boost with higher interchange revenue and transaction volumes."
Lau expects more scrutiny on the acquisition deal due to Evolve Bank's history.
"Part of this could be mitigated by including a multi-bank or a migration strategy as part of the deal," she said.
According to Lerner, the point of note for Evolve Bank is how its current relationship with Step fits into Bitmine's recent investment into Beast Industries.
"If Evolve is involved in or supporting a move into crypto, that might put Evolve in the spotlight for more regulatory scrutiny," he explained. "On the flip side, successfully managing such regulatory risk would demonstrate Evolve's abilities to effectively handle such experimentation."
