Varo Bank Raises $123.9 Million to Fuel New Stage of Growth

Varo Bank said its all-digital nationally chartered bank is entering a new stage of growth after raising $123.9 million in a Series G round led by existing investor Warburg Pincus and new investor Coliseum Capital Management.

The company also added two members to its board of directors, including Alice Milligan, former chief marketing officer at Morgan Stanley, and Kevin Watters, former division CEO at JPMorganChase, it said in a Monday (Feb. 2) press release.

“This combination of new capital, Coliseum’s partnership, and experienced banking leaders joining our board, is propelling Varo into its next phase of growth,” Varo Bank CEO Gavin Michael said in the release. “We remain focused on operating with discipline and delivering meaningful impact for our customers.”

Varo launched its app in 2017 and has continued adding financial tools for everyday consumers, including proprietary machine-learning models that supplement traditional credit data and broaden lending access, according to the release.

In 2025, the company generated $547 million in lending volume through its Varo Advance and Varo Line of Credit lending products, the release said. Varo also drove deeper platform adoption and customer value across its lending, banking and credit-building offerings by providing competitive high-yield savings and cashback debit offers, per the release.

The company launched Varo Line of Credit in March 2024, saying this lending product is designed to help consumers with unanticipated expenses such as car repairs and medical bills by allowing them to make repayments over time.

Coliseum Capital Management Co-founder and Managing Partner Chris Shackelton said in the Monday press release that his firm’s investment reflects confidence in Varo’s “uniquely compelling growth potential” and a desire to support the company’s work to expand its customer value proposition.

“We believe Varo is building a resilient and scalable platform from which to capitalize on a significant market share opportunity,” Shackelton said.

Milligan and Watters said in a joint statement in the release, “Varo has built something rare: a technology-first customer experience paired with the governance and risk discipline required of a nationally chartered bank.”

Financial institutions, from FinTechs to large banks and credit unions, are recalibrating strategies to appeal to Gen Z consumers, Michael told PYMNTS CEO Karen Webster in an interview posted in June.

Varo meets the demands of these consumers with products like Varo Advance, which offers short-term cash advances, and an artificial intelligence-powered line of credit, Michael said.

“We’re underwriting these products based on cash flow, not traditional credit histories,” Michael said.