Varo Money Inc, a US-based mobile banking business that helps customers cover their expenses, pay their bills, and build their wealth over time, announced it has closed a $241 million Series D 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, impact investor and movie producer.
Other investors that took part in the funding round include HarbourVest Partners and Progressive Insurance.
The investment will be used to fuel Varo’s growth and to help Varo innovate across a range of financial products to build the financial resilience of everyday Americans. To date, Varo has raised a total of $419.4 million and is poised to become the first and only fully digital bank to receive a national charter.
“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country,” said Colin Walsh, founder and CEO of Varo. “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.”
“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,” said 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,” said Progressive’s Chief Strategy Officer, Andrew Quigg. “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.”
The company said that it 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.
“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,” said Lee Sachs, co-founder and Managing Partner of Gallatin Point Capital. “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.”
“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,” said Cary Davis, Managing Director at Warburg Pincus. Warburg Pincus has been a backer of Varo since the Series A round in May 2016.
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