Varo Money is bringing bank fees and financial health into its marketing
- After applying for a bank license, Varo Money is putting major resources in boosting its brand presence
- The company is using digital ads and video content to promote a message of financial health and empowerment
Another fintech startup is casting bank fees in its marketing. Varo Money has been targeting customers of big banks whose fees they're tired of having to understand and pay. Despite its appeal to potential customers to switch to Varo, its ads don't call out specific companies, as some of its peers do. "Customers have different reasons for wanting to switch banks," said Emily Brauer Gill, director of brand and communications. "Our ethos is not to be overly aggressive." Varo's ads promote a no-fee, all-in-one banking solution aimed at millennials, though its core messages speak to a broad swath of the public. Its digital ads can be found on social media platforms including Twitter, Facebook, Instagram, and Pinterest and it maintains a content marketing site called Money Diaries, which includes videos featuring customers' personal experiences with money along the way to personal and professional success. The company, which has been ramping up efforts to build its brand, also hired a chief marketing officer, Carl Gish, who joined last week. Varo declined to share its marketing spend but it said it's growing. Varo joins a group of neobanks like Chime, Moven and Aspiration that are aiming to take market share from incumbent banks by marketing themselves as better alternatives to the status quo -- and in a crowded market where people still aren't excited about digital-only banks, marketing is a critical piece of the business. "If you've lost your free account, the message is 'come to Varo, you're welcome here,' but we're not going to take crazy cheap shots at the banks; we think our value proposition speaks for itself," Gill said. Varo, which offers checking and savings accounts and loans, also wants to make financial health part of its messaging, which is manifested in its Money Diaries series that debuted in January. "We identified this issue we kept hearing, which we call a cash trap -- the idea is that there's this big bulk of millennials who are creditworthy [and] have good jobs, but they don’t like to budget," Gill said. "A lot people have a mental model for their finances, which is to budget by [looking at your] balance; it's great until it doesn't work." The videos don't exclusively focus on money, but more about money as an enabler to achieving major life goals, resembling somewhat of a triumph over adversity narrative. While the videos feature millennials, the stories can reach a much larger potential customer group due to the universality of the messaging. Varo's financial health message has endeared itself to investors. The company has so far raised $74 million in funding, with a $45 million Series B round led by Warburg Pincus and the Rise Fund that concluded in January. Maya Chorengel, a senior partner with the Rise Fund said in a recent interview that she invested in Varo because of her confidence in the company's "ability to scale successfully as a business and advance the financial health of its customers." Varo, which launched in June, said it has "tens of thousands of users," and that between October and January, the monthly flow of deposits increased by 35 percent each month. "The look and feel may appeal to millennials, but the talk of empowerment and improving finances over time is the right messaging for boomers and seniors," said Chris Allieri, founder and principal of New York-based branding consultancy Mulberry & Astor.