Varo Bank Raises $510M for Customer Growth, Tech Innovation

All-digital bank Varo Bank has closed a funding round with $510 million, according to a press release.

With the new capital, Varo Bank plans to boost its customer growth and support new product and technology innovations, the release stated.

“The time is now to bring the best of FinTech to the regulated financial system and build an entirely new kind of bank: one where consumers no longer have to choose between a sophisticated digital experience and a trustworthy banking partner,” said Varo Bank CEO and Founder Colin Walsh in the release. “This funding accelerates our path to achieving a profitable, transformative and sustainable business designed to advance financial inclusion for millions of consumers.”

New investor Lone Pine Capital led the round, according to the release. Additional investors included Declaration Partners, Eldridge, Marshall Wace, Berkshire Partners/Stockbridge, and funds and accounts managed by BlackRock.

Varo obtained its banking charter 13 months ago. Since then, the bank has doubled its opened accounts, along with tripling its revenue and adding more financial products like Varo Advance, which offers short-term credit, Varo Perks cash back rewards, and the soon-to-be-introduced credit card program Varo Believe, the release stated.

Varo was formed in 2017 and touts its goal to help boost financial inclusion and break down those types of barriers, according to the release.

In August, Varo Bank Chief Commercial and Product Officer Wesley Wright told PYMNTS he was seeing a trend of peer-to-peer (P2P) payments rising in the U.S., with large percentages of millennials having adopted them during the pandemic.

Read more: Neobank Varo on Serving Customers’ Needs as P2P Payments See a Rapid Rise in Usage

He said he expects P2P payments to continue to be popular in the coming years, with merchants tired of handling checks and high credit card fees. The P2P solution could offer more speed and less friction.