Mobile-Only Start-Up Bank Raises $27 Million
Varo Money, a mobile-only start-up bank, announced it has raised more than $27 million, which puts the company one step closer to seeking its own bank charter.
According to The Wall Street Journal, Varo will initially rely on banking partners to back their accounts, but it hopes to one day offer deposits on its own.
Varo will offer a full range of products, including debit cards, deposits and lending products. It promises to give customers greater control of their financial lives via a mobile app that will provide 24/7 digital financial coaching, including spending analysis and real-time budgeting.
“The U.S. banking market is undergoing a huge transformation, and Varo is ideally positioned to offer a unique and unrivaled banking service to our target customer base,” said Colin Walsh, CEO and co-founder. “We have the team, strategy, product vision and execution capabilities to change the way that people interact with their banks – empowering customers to achieve a better financial future.”
Warburg Pincus, a private equity firm, has invested the most resources in the San Francisco-based start-up.
Michael Martin, Managing Director and Head of the Financial Services Group, Warburg Pincus, added, “Varo is an excellent fit within our industry thesis focused on the bank of the future. We are at a tipping point in retail banking, and there is a real opportunity to build a new and differentiated bank model based on a mobile platform serving the needs of many people. We look forward to working with Colin Walsh and the Varo management team as they bring a new level of innovation to the traditional world of banking.”
Lenny is another company that entered the mobile-only financial services market, introducing a lending app that targets Millennials.