New banks

Varo raises $241 million as it aspires to become the first fintech to become a national bank

  • Varo is poised to become the first fintech to receive a national bank charter in the U.S.
  • The challenger bank plans to use this money for growth and new product development.
close

Email a Friend

Varo raises $241 million as it aspires to become the first fintech to become a national bank

Varo Money announced it has closed a $230 million investment round, 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, a global entrepreneur and movie producer.

What’s going on: The fintech firm, which launched banking services in 2017, raised an investment round in anticipation of getting a national bank charter.

  • New investors joining the round include HarbourVest and Progressive Insurance.
  • Varo said the funds will be used to fuel its growth, as well as for new product development.
  • Varo has raised over $400 million with this most recent round of funding.

“In the midst of all the economic challenges people are facing right now, the digital economy can still be a force for good,” said Maya Chorengel, co-managing partner of The Rise Fund.

“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,”

SPONSORED

Helping customers during the crisis: Varo reacted during the crisis to help people access government relief funds.

  • Varo worked with 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.
  • 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.

Eyes on a banking license: Earlier this year, Varo received FDIC approval for its bank charter, clearing one of the last hurdles on the firm’s quest to become a bank.

  • 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.
  • It expects approval this summer.
  • Upon approval of its national bank charter, Varo will expand its services to offer credit cards, loans, and additional savings products.

“Since our inception, we have been laser-focused on becoming the first fully digital bank, giving us greater opportunity to deliver the affordable financial services that all Americans need today,” said Colin Walsh, co-founder and CEO of Varo.

“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.”

0 comments on “Varo raises $241 million as it aspires to become the first fintech to become a national bank”

New banks

With OCC approval of Radius Bank, LendingClub is one step closer to becoming a marketplace bank

  • LendingClub’s merger with Radius Bank received conditional approval by the OCC.
  • The approval marks the latest stage in the acquisition which will transform LendingClub into a marketplace bank.
Rimal Farrukh | January 11, 2021
New banks

Green Dot launches Go2bank, its in-house challenger bank

  • Green Dot is best known for its prepaid cards and managed debit card programs its managed for big brands.
  • The bank has launched its own challenger bank brand to compete head on in digital banking.
Zachary Miller | January 06, 2021
New banks

Quontic is first bank to offer bitcoin rewards on debit card purchases

  • Quontic Bank released a checking account that pays rewards in bitcoin.
  • 20 percent of their consumers indicated that they would switch their checking account to one which rewards them in bitcoin
Rimal Farrukh | December 29, 2020
New banks

With PPP powering account growth, Radius Bank upgrades its business banking

  • Radius Bank launched its small business banking platform and mobile app.
  • The revamped service allows SMBs to smoothly transition across accounts as well as deposit checks, pay bills and make transactions.
Rimal Farrukh | December 28, 2020
New banks

2020 in review: The year of the pandemic as seen through Tearsheet’s top stories

  • 2020 was a massive year in the world and in financial services.
  • Through the prism of Tearsheet's reporting, we look back at the year that was.
Zachary Miller | December 28, 2020
More Articles