SAN FRANCISCO — Varo Money, a mobile banking startup, has closed a $45 million Series B funding round led by existing investor Warburg Pincus, a global private equity firm, 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. Thirty 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 has raised more than $78 million 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 in our strategic direction and progress toward our goal to provide millions of Americans with 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.
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 bank accounts are provided by The Bancorp Bank, and deposits are FDIC-insured up to $250,000 through The Bancorp Bank.