Canadian FinTech Neo Financial said that it has raised CAD $50 million in a Series A funding round that included $25 million in funding and $25 million in debt facility financing.
The round was led by Valar Ventures, a VC firm founded by James Fitzgerald, Andrew McCormack, and Peter Thiel. Other investors included Shopify CEO and founder Tobi Lutke, Golden Ventures, Inovia Capital, Thomvest, Afore Capital, Maple VC, FJ Labs, and District Ventures.
The $25 million debt facility was closed with ABT Financial, Neo said in a statement.
“We’re excited to partner with the team building Neo Financial,” said Andrew McCormack, a founding partner of Valar Ventures. “They are building a powerful technology platform which provides the modern banking services consumers around the world have come to expect and are still not getting from the traditional banks in Canada.”
“We see massive opportunities for new entrants in the banking industry globally, particularly in places dominated by a few old banks that have gotten too comfortable and forgotten how to innovate,” McCormack added.
Neo said the cash will enable it to expand its offerings in Canada. It also aims to develop more products for customers that may be underserved due to issues with credit scores, financial history or literacy. The company also plans to introduce more mobile banking features and greater flexibility, such as monthly subscription plans to increase Neo Cards rewards.
The Calgary-based company recently expanded its Neo Mastercard services, which offers cashback opportunities from partnered stores in Edmonton, Winnipeg, Vancouver and other Canadians cities.
Neo’s credit card is issued by ABT and backed by the Mastercard Network, while its Neo Savings account is provided by Concentra Bank.
The company added that it is actively hiring and has 70 positions open across finance, marketing, operations, product and technology.
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