Varo declined to comment on this latest round, but according to PitchBook, the fintech has raised slightly over $1 billion in capital since its launch in 2015. The news of the financing was first reported earlier this week by Crowdfund Insider (here and here) and Jason Mikula, author of Fintech Business Weekly.
It wouldn’t be the first time Varo’s fundraising efforts didn’t turn out as planned. Compared to its large, “oversubscribed” $510 million Series E in 2021, Varo raised a $50 million equity round in 2023 at a lesser valuation ($1.85 billion post-money). According to PitchBook, it was valued at $2.5 billion post-money in that 2021 round.
Colin Walsh, the company’s founder and CEO, recently announced his resignation in a somewhat unexpected decision. Gavin Michael will take over as CEO. (Michael’s LinkedIn profile indicates that he took on a leadership position at Varo in November 2024 after serving as CEO of the publicly traded cryptocurrency exchange Bakkt.)
Michael’s background as the CEO of Bakkt and his prior leadership positions at Citi and JPMorgan Chase were cited by the spokesman as being “exactly what Varo needs for its next chapter.”
Another Spokesperson Added
“Colin has known Gavin for 19 years, and after working closely with him these past months, Colin is confident he’s the right leader to build on the company’s foundation that he built for the last decade, while maintaining Varo’s commitment to financial inclusion,”.
According to the spokesman, Walsh will continue to serve on Varo’s board and still owns a sizeable portion of the business as a founder.
Due to its 2020 national bank charter, Varo became the first all-digital nationally licensed U.S. consumer bank, making it a keenly followed fintech in its early years. However, the business was not yet profitable in early 2024. Additionally, a call report from December 2024 stated that it had recorded a loss of almost $65 million.