- Mobile banking company Varo Money announced it has raised $241 million in a Series D round of funding
Mobile banking company Varo Money announced it has raised $241 million in a Series D round of funding co-led by new investor Gallatin Point Capital and existing investor The Rise Fund (co-founded by TPG, U2 lead singer Bono, and Jeff Skoll). Other new investors who joined the round include HarbourVest Partners and Progressive Insurance.
This round of funding will be used for fueling Varo’s growth and to help Varo innovate across a wide range of financial products to build the financial resilience of everyday Americans. Including this round of funding, Varo has raised a total of $419.4 million. And the company is poised to become the first and only fully digital bank to receive a national charter.
Varo is known as a standout leader in the digital banking space. And during the COVID-19 crisis, Varo has worked proactively to support customers by prioritizing the processing of electronic and paper check Treasury payments and providing individuals who have direct deposit early access to stimulus and unemployment relief funds. And the company increased both deposit and ATM limits and accelerated key partnerships that provided direct benefits to customers impacted by the pandemic, including with job platforms Steady and Wonolo.
Plus Varo built its fully digital banking solution from the ground up faster than originally planned. And the company officially launched its banking services in July 2017, offering premium banking products through The Bancorp Bank to help Americans stretch their money with bank and savings accounts that have no minimum balance requirement and no monthly account fees (Varo’s No-Fee Overdraft allows qualified customers to overdraw their bank account up to $50 with no fees). Plus Varo also offers fee-free ATM withdrawals with its network of more than 55,000 Allpoint ATMs worldwide.
Currently, Varo is in the final stages of its national bank charter application and pending completion of the conditions of the OCC, the FDIC and the Federal Reserve, Varo will receive approval to be a national bank — which is expected in summer 2020. Upon charter approval, Varo will expand its services to offer credit cards, loans, and additional savings products.
Key Quotes:
“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country. As the first fully digital national bank, Varo will bring our mission of financial inclusion to life and create more financially resilient – and thus healthier and stronger – communities. This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion.”
Colin Walsh, founder and CEO of Varo
“In the midst of all the economic challenges people are facing right now, the digital economy can still be a force for good. Varo’s focus on financial inclusion and the support they offer people to help manage their finances and reduce financial stress really matters at a time when so many American families are struggling in a volatile economy. And that’s why RISE chose to partner with the team at Varo.”
Maya Chorengel, co-managing partner of The Rise Fund
“We’re excited for the opportunity to invest in Varo and look forward to exploring a commercial relationship. We understand consumers’ needs continue to evolve and Varo provides a convenient, cost-effective way for all consumers to bank. We like to partner with strong, experienced management teams and believe that our investment in Varo aligns well with this strategy.”
Progressive’s Chief Strategy Officer Andrew Quigg
“Varo has had tremendous success in building a next-generation financial services firm that gives customers the tools they need to build their savings and manage their finances. We look forward to partnering with Colin and the Varo team at this exciting stage as Varo transitions into a nationally-chartered bank and expands its product offering to better serve its growing customer base.”
Lee Sachs, co-founder and Managing Partner of Gallatin Point Capital
“We have long believed that Varo’s strong management team – a mix of experts from technology and banking – paired with their strategy of being a fully chartered bank, was the right path to build a sustainable business. This funding round validates Varo’s mission and progress to achieve meaningful impact for millions of Americans who need a better bank. We look forward to supporting its continued growth.”
Cary Davis, Managing Director at Warburg Pincus
