Canada’s Neo Financial hits unicorn status in just 3 years

Canadian FinTech Neo Financial, has reached the $1bn valuation milestone, after the close of its Series C round on $185m.

Valar Ventures led the round, with contributions also coming from Tribe Capital, Altos Ventures, Maple VC, Blank Ventures, Gaingels, and Knollwood Investment Advisory.

In addition to the fundraise, a secondary share sale was offered, allowing early investors and employees to sell a portion of their shares to new investors.

Neo Financial claims it is one of the fastest Canadian companies to reach one million customers and unicorn status.

Founded in 2019, the FinTech company was built to challenge the status quo of financial services. It offers a selection of services to help customers with spending, saving, investing and rewards. It originally launched a no-fee Mastercard that gives an average of 4-6% cashback at partners and 1% cashback on all spend.

The company has formed partnerships with Hudson’s Bay, Home Depot, H&R Block, Boston Pizza, Goodfood, and 7,000 other national and local retailers, helping them upgrade their loyalty and financial service offerings.

The company has expanded beyond its loyalty cards and into buy now, pay later services, point of sale instalment financing and subscription-based loyalty services for online and brick and mortar retailers.

Its goal is to become a ‘one-stop shop’ for all financial services for Canadians and retailers. It is launching a mortgage product later this year and plans to add over 100 people to its Winnipeg and Calgary tech campuses this year.

Valar Ventures founding partner Andrew McCormack said, “The pace at which this team releases new products and grows its customer base is among the fastest we have seen in our careers. As a result, Neo can be the biggest disruption the Canadian banking industry has seen in decades, and their influence on financial services available to Canadians will impact the lives of millions.

“We see that Neo’s approach to partnering with retailers is a huge win for both the companies and their customers.”

With this round close, the FinTech company has raised a total of $299m in funding. The company previously raised $64m in its Series B funding round in September 2021.

The company also received a $1.6m grant from Province of Manitoba – a Canadian state – to support its growth in the region. It was designed to aid the training of 300 new employees.

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