September 09, 2021 Varo Bank raised $510M in a round of E funding
Since receiving its banking license last year, the number of accounts has grown to 4 million.
Neobank Varo raised $510 million in funding round E. The funding round was led by Lone Pine Capital, with dozens of new and existing investors participating.
Founded in 2015, Varo offers customers bank accounts with no minimum balance requirements or monthly fees. Over the past 13 months, Varo has doubled the number of open accounts to four million and tripled its revenue. After the latest fundraising, the company plans to launch a number of new financial products and hire employees. Varo is actively recruiting for more than 50 positions in teams of engineers, data scientists, designers, marketers and product specialists.
Main achievements and benefits
- The startup’s valuation rose to $2.5 billion. Previously, Varo Money was valued at $700 million.
- Last year, Varo was the first American fintech startup to receive a banking license from the U.S. Office of the Comptroller of the Currency (OCC). Previously, the startup’s customer assets were held by Bancorp Bank; after receiving the license, the funds of more than 2 million customers were transferred to Varo Bank.
- The digital bank charges no fees for account maintenance or overseas transfers. Customers can use the network of 55,000 ATMs for free.
- Getting a banking license allowed the bank to “offer higher deposit rates” and “opened up access to the Zelle payment system,” said Colin Walsh, the neobank’s CEO. Varo has doubled the number of accounts to 4 million in the year since getting its license. Its revenue has tripled, he said.
- The startup now stores its customers’ data itself, rather than handing it over to a partner bank. According to the CEO, this could “play a key role” in the future: Varo plans to create its own services for investing in cryptocurrency.
- Varo Bank’s management is considering an IPO, Walsh told CNBC.