US digital bank Varo has successfully closed a $29 million funding round, part of a broader effort to raise $55 million to bolster its operations and drive future growth.
The latest infusion of capital brings Varo’s total funding to over $1 billion since its founding in 2015 by former Wells Fargo executive Colin Walsh. However, the digital bank has faced valuation challenges amidst persistent losses, with its valuation dropping to $1.5 billion in 2023 from $2.5 billion in 2021, following a $510 million Series E funding round.
A Pioneering Digital Bank
Varo made history in 2020 by becoming the first US consumer fintech to receive a national bank charter, allowing it to offer a full suite of FDIC-insured banking services.
The company is undergoing a leadership transition, with Gavin Michael, former CEO of cryptocurrency exchange Bakkt, stepping in as the new Chief Executive, replacing Colin Walsh.
As Varo works to navigate its valuation and profitability challenges, the new funding aims to support its growth strategy and reinforce its position as a pioneering player in the digital banking sector.
