Varo Money gets new backers and closer to bank charter
More big names are backing Varo Money in its quest to become a nationally chartered bank.
On Wednesday the mobile bank announced it has closed a $241 million Series D round of funding. New investors include the private investment firm Gallatin Point Capital, the private equity firm HarbourVest Partners and Progressive Insurance.
This series was co-led by Gallatin Point Capital and an existing investor, the Rise Fund, co-founded by the private investment firm TPG, U2 lead singer Bono and the entrepreneur Jeff Skoll.
Varo Money has raised $419.4 million to date.
“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country,” Colin Walsh, founder and CEO of Varo, said in a press release. “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.”
Varo Money launched its banking services in July 2017 in partnership with The Bancorp Bank in Wilmington, Del. Its products include a no-fee bank account, a high-yield savings account that earns up to 2.8%, no fees on overdrafts up to $50 and early access to paycheck funds.
The fintech expects to receive approval to be a national bank this summer, provided it meets the conditions of the Office of the Comptroller of Currency, the Federal Deposit Insurance Corp., and the Federal Reserve. Most recently, the FDIC approved its application for deposit insurance in February.
Varo would be the first fintech provider among several similar applicants to get the green light from federal regulators.
“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,” Lee Sachs, co-founder and managing partner of Gallatin Point Capital, said in a press release. “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.”