Varo Bank raises $123.9m growth round led by Coliseum Capital

February 2, 2026

Varo Bank, a US-based all-digital nationally chartered consumer bank, has announced a $123.9m growth investment as it looks to enter its next phase of expansion.

The Series G round was led by existing investor Warburg Pincus alongside new investor Coliseum Capital Management, LLC. Existing backers, including Northview, also increased their commitments as part of the transaction.

Alongside the funding, Varo confirmed that Alice Milligan, former chief marketing officer at Morgan Stanley, and Kevin Watters, former division chief executive officer at JP Morgan, have joined the company’s board of directors.

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

Since launching its app in 2017, Varo has developed a digital platform designed to provide everyday consumers with modern financial tools. The company uses proprietary machine-learning models to complement traditional credit data, helping to broaden access to lending beyond conventional credit scoring methods.

Through its Varo Advance and Varo Line of Credit products, the bank generated $547m in lending volume in 2025, highlighting growing demand for its credit offerings. Varo also offers high-yield savings accounts and cashback debit cards, which it said are driving deeper platform engagement and customer value. During 2025, the bank reported efficiency gains through cost reductions alongside revenue growth.

Coliseum Capital Management co-founder and managing partner Chris Shackelton said. “This investment reflects our confidence in Varo’s leadership team and uniquely compelling growth potential. We are thrilled to join Warburg Pincus as long-term, collaborative partners, and support Varo’s work to expand its customer value proposition and to further differentiate from traditional banks. We believe Varo is building a resilient and scalable platform from which to capitalize on a significant market share opportunity.”

Alice Milligan and Kevin Watters, Varo Bank Board of Directors, said, “Varo has built something rare: a technology-first customer experience paired with the governance and risk discipline required of a nationally chartered bank. With this new capital and a strong foundation for disciplined growth, we’re excited to support the next phase of scaling Varo’s lending and banking platform for everyday consumers.”