Mobile banking start up Varo Money announced today that it has closed a $45m Series B fundraising round, led by existing investor Warburg Pincus, and The Rise Fund.
Varo offers US consumers a digital banking account that integrates banking, lending and saving products with tools to help users smooth out their cash flow and build financial health, all based within the Varo smartphone app. In addition, it charges no fees for overdraft usage, minimum balance, foreign transactions or using local ATMs.
The news marks the second fintech investment for The Rise Fund, a global impact fund co-founded by U2 frontman Bono and managed by global equity firm TPG, after it invested in micro-investments app Acorns earlier this week. The Rise Fund is committed to achieving social impact with its investments alongside competitive financial returns, selecting projects in line with the United Nations’ Sustainable Development Goals.
Thirty additional participants were involved in the round, including angels and existing investors and management, bringing Varo Money’s total funds raised to more than $78m in less than two years. The funds will be used to further the app’s growth in the United States.
“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.
“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.”
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.