FinTech: Varo, Soon-to-be a National Bank, Scores $241M Fundraise

June 4, 2020 | FinTech, News, Venture Capital
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U2 lead singer Bono participated in the funding.

Challenger bank Varo, raised a further $ 241 million in a Series D funding round co-led by existing investor The Rise Fund, and new investor Gallatin Point Capital. Other investors included movie producer Jeff Skoll, HarbourVest Partners, Progressive Insurance, and U2 lead singer Bono. (Finovate)

The aggregate funds raised by the soon-to-be digital bank to date is $ 419.4 million.

Varo: Soon to be a national bank

Varo is well on its way towards achieving the distinction of being the first fintech to win a national banking charter. The digital bank has a commitment to financial inclusion for all Americans.

“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, in a statement. “As the first fully digital national bank, Varo will bring our mission of financial inclusion to life.”

The firm intends to use the financing to help its plans for growth and innovation of a range of financial products. These products would help build the financial resilience of everyday Americans.

The new investment would also enable the bank to complete its chartering process and further improve its modern banking technology. Once chartered, the fintech can add credit cards, loans, and other banking products to its lineup.

Status of charter

Varo expects to receive approval to become a national bank in the summer of 2020. It is in the midst of completing the conditions of the OCC, the FDIC, and the Federal Reserve and is in the final stages of its charter application.

Varo: Customer acquisition and facilities

In April, digital fintech Moven shut down its consumer banking unit and moved all its accounts to Varo.

The digital fintech offers accounts with no minimum balance requirement and no monthly account fees. Varo’s No-Fee Overdraft allows qualified customers to overdraw their bank account up to $50 with no fees. It also offers fee-free ATM withdrawals with its network of more than 55,000 Allpoint ATMs worldwide.

Related Story:  Moven’s Consumer Banking Accounts to Move to Varo                                                 

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