Varo Money, Inc., a mobile banking startup, announced today that it has closed a $45M Series B funding round led by existing investor Warburg Pincus, a global private equity firm focused on growth investing, and The Rise Fund, a global impact fund led by private equity firm TPG.
The Rise Fund is committed to achieving social impact alongside competitive financial returns and was founded by TPG Growth Founder and Managing Partner Bill McGlashan, U2 lead singer Bono (a well-known activist and a special partner with TPG Growth), and Jeff Skoll, a global entrepreneur, film producer and impact investor. 30 additional participants — including angels, existing investors and management — were included in the funding round, which will be used to further the explosive growth of Varo’s banking app, which improves the financial lives of its customers. With the closing of this round, Varo will have raised more than $78M in less than two years.
“We founded Varo because we believe that customers simply deserve better banking options,” said Colin Walsh, co-founder and CEO of Varo Money. “Millions of Americans are looking for an easier, more affordable way to manage their money and reach their financial goals. As a company, we are extremely motivated by our mission of improving consumer financial health, which is why we are so honored by this investment from The Rise Fund and continued support from Warburg Pincus and our community of investors. This funding round is a huge vote of confidence on our strategic direction and progress toward our goal to provide millions of Americans access to a bank account that’s designed to help them get more out of their money.”
“We are pleased to continue supporting Varo and its mission to create a financial services firm for the future,” said David Coulter, Special Limited Partner at Warburg Pincus, former Vice Chairman of JPMorgan Chase & Co., and former CEO and Chairman of Bank of America Corporation. “Since our initial investment in 2016, Colin and his team have made significant progress in advancing Varo’s innovative platform and growing its user base. The company is well-positioned to deliver a unique banking service to its customers, and we look forward to supporting its continued growth.”
Varo is using mobile technology to change the future of banking by offering customers a frictionless bank account that integrates banking, saving and lending products with tools to help customers smooth cash flow and build savings—all from their phones. Varo eliminates the unfriendly fees that traditional banks often charge, such as overdraft fees, minimum balance fees and foreign transaction fees. In addition, Varo does not charge ATM fees at a network of over 55,000 Allpoint ATMs worldwide.
”Within financial services, which is a key sector for The Rise Fund, we see tremendous opportunity for disruption and innovation that will help more consumers save regularly, spend wisely and borrow responsibly,” said Maya Chorengel, Senior Partner with The Rise Fund. “We’re looking forward to working with Colin and his team to advance Varo’s mission of creating real value and positive impact for customers in a way that is simple and intuitive.”
In July 2017, Varo applied to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) for a national bank charter, which would allow the company to deliver on its promise of offering its customers nationwide access to a full range of products and solutions and the highest standards of consumer protection. If approved, Varo would become the first national bank in the United States designed for people who want to bank easily on their smartphones.
Varo was founded on a deep knowledge of banking and consumer technology by Colin Walsh, CEO, and Kolya Klymenko, CTO, and counts among its team the best talent from some of the world’s leading brands, including Amazon, American Express, Apple, Charles Schwab, Citi, Google, Instagram, Lending Club, Lyft, McKinsey, TaskRabbit, Visa, and Wells Fargo.