Varo intends to use the proceeds from investment round to enhance its growth and advance its financial products
US-based mobile banking company Varo Money has closed a USD Series D financing round at $241m, to pursue its goal of becoming a national bank.
The financing round was co-led by new investor Gallatin Point Capital along with existing investor The Rise Fund. New investors including HarbourVest Partners and Progressive Insurance have also participated in the funding round.
Varo intends to use the proceeds from investment round to enhance its growth and advance its financial products.
The new investment round takes the total funding raised by the company $419.4m to date. The bank expects to become the first and only fully digital bank to receive a national charter.
Gallatin Point Capital co-founder and managing partner Lee Sachs said: “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.”
Varo is in the final stages of its charter application to become a national bank
The digital banking firm claimed that it has supported customers during the Covid-19 crisis by prioritising the processing of electronic and paper check treasury payments and provided individuals who have direct deposit with early access to stimulus and unemployment relief funds.
In addition, the company has increased both deposit and ATM limits and advanced partnerships with job platforms including Steady and Wonolo, to offer benefit customers impacted by the pandemic.
Varo has started its banking services in July 2017, offering premium banking products through The Bancorp Bank.
The company said that it is in the final stages of its national bank charter application and expects to receive approval to be a national bank in summer 2020.
Varo founder and CEO Colin Walsh said: “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.”