Mobile banking solution Varo Money has closed a $45m Series B funding round led by Warburg Pincus.
Last year, Varo applied to the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) for a national bank charter. This would enable it to become a regulated bank that can take deposits, pay interest, make loans around the US and issue debit and credit cards – all via its mobile app.
TPG used its Rise Fund to contribute to Varo’s Series B, which also picked up contributions from 30 other participants made up of angels, existing investors and management.
San Francisco-based Varo provides consumers with a banking solution built for smartphones. Users open up a bank account on the app, enabling them to access banking, saving and lending products. A selection of financial tools are also available to help users with cash flow projections, spending tacking, and smart alerts.
The bank removes overdraft fees, minimum balance fees and foreign transaction fees, while also offering free ATM cash withdrawals.
Capital from the round will be used to further the growth of the company’s banking app.
Varo Money co-founder and CEO Colin Walsh said, “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.”
Following the funding round, the company has raised a total of $78m in under two years. The company’s last investment was a $5m injection last year to support the launch of its lending product offering.
This investment is The Rise Fund’s third investment in the FinTech sector within the space of a week. The vehicle made its initial FinTech investment with an undisclosed commitment to micro-investing app Acorns. Following that transaction, the fund completed a contribution to AI solution developer C3 IoT’s $100m round of funding.
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