Varo Money Inc., the mobile banking company, closed on a $241 million Series D funding round, the San Francisco-based company announced on Wednesday (June 3).
Varo said it will use the investment toward growth and creating products that can “build the financial resilience of everyday Americans.” So far, Varo has raised $419.4 million and said it is poised to become the first fully digital bank to receive a national charter.
The initiative was co-led by new investor Gallatin Point Capital LLC, a Connecticut private investment firm, and existing investor The Rise Fund, a global impact investment fund committed to positive social and environmental outcomes. Rise was co-founded by U2 lead singer Bono and movie producer and entrepreneur Jeff Skoll. Other new investors include HarbourVest Partners and Progressive Insurance.
Varo launched its financial services in 2017 to provide a mobile banking service for customers to pay bills and build savings with accounts that had no minimum balance or fees.
“Varo was founded ... to make a powerful impact on systemic financial inequality in communities across this country,” said Varo Founder and CEO Colin Walsh in a statement. “As the first fully digital 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.”
Varo is in the final stages of landing a national bank charter, awaiting a sign-off from the Office of the Comptroller of the Currency, FDIC, and the Federal Reserve Bank.
Approval is expected this summer, Varo said. Upon charter approval, Varo said it will expand its services to offer credit cards, loans, and additional savings products.
Maya Chorengel, co-managing partner of The Rise Fund, said given the global economic challenges, the digital economy can be a force for good.
“Varo’s focus on financial inclusion and the support they offer people to help manage their finances and reduce financial stress really matters at a time when so many American families are struggling in a volatile economy,” she said in a statement.