Varo Money

Last updated
Varo Bank
Type Private
Industry Financial services
Consumer banking
Founded2015;7 years ago (2015)
FoundersColin Walsh
Kolya Klymenko
Headquarters San Francisco, California, United States
ProductsChecking accounts, savings accounts, debit cards, peer to peer payments, fee-free overdraft
Total assets $2.5 billion
Number of employees
587
Website www.varomoney.com

Varo is an American mobile only neobank based in San Francisco, California. The company provides financial services through its mobile app and currently has 1 million customers. [1]

Contents

History

The neobank unicorn (finance) was founded by Colin Walsh and Kolya Klymenko in 2015. As the first national mobile-only bank in the US, Varo is on a mission "to improve the financial lives of its customers with a unique range of high-yield savings accounts and spend tracking and cashflow management products." [2]

The bank's primary and sole service gateway is its mobile application, which is consistent with the pricipal way that modern clients access their banking services. [3] Up until October 1, 2020, Varo was in partnership with the Bancorp Bank to supply the backbone for their banking accounts. [4]

Varo is one of the three largest neobanks in the United States behind Chime and Simple. In 2016, Varo applied for a banking license to become a nationally chartered bank and develop their internal banking services platform, after which became the first U.S. fintech to earn a national banking license when the Office of the Comptroller of the Currency (OCC) awarded it a charter in August 2021. [5] The charter offered Varo an opportunity to research, develop, and market products and services that would be unavailable to a corporation with an outsourced banking partner, which raised significant investor interests. [6]

In April 2020, after the collapse of Moven, its customers were directed to transfer their accounts to Varo as Moven had decided to retreat from the retail banking services and switch to selling its technology services instead. [7]

In February 2021, Varo raised $63 million in new funding. The round was led by NBA star Russell Westbrook, who joined the startup as an advisor focused on the direction of Varo Bank’s programs aimed at underserved communities, including communities of color. [8]

In September 2021, Varo announced that it has raised $510 million in a Series E funding round at a $2.5 billion valuation. [9] This funding round officially placed the company under unicorn status as a private company with a valuation over $1 billion.

Overview

Like most online banks, Varo provides no fee checking and savings accounts as well as no overdraft fees. It also provides tools to help budget and keep track of spending as well as free ATM withdrawals through its Allpoint partnership.

See also

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References

  1. "Varo crosses 1 million customers, with plans to become a bank by 2020 | Bank Innovation | Bank Innovation". bankinnovation.net.
  2. Temenos Case Study https://www.temenos.com/us/community/success-stories/varo-bank/.{{cite web}}: Missing or empty |title= (help)
  3. "Creating a Customer Service Experience That's Actually About the Customer". Varo Bank. November 30, 2016.
  4. "Varo and The Bancorp". The Bancorp.
  5. "Varo Gets A Banking License And Moves Operations To Temenos Transact Platform". Forbes Enterprise Tech.
  6. "Mobile banking startup Varo Money has applied for a bank charter".
  7. "Moven customers to transition to Varo". Finextra Research. April 16, 2020.
  8. TechCrunch. February 18, 2021 https://techcrunch.com/2021/02/18/varo-bank-raises-another-63m-led-by-nba-star-russell-westbrook/.{{cite web}}: Missing or empty |title= (help)
  9. TechCrunch. September 9, 2021 https://techcrunch.com/2021/09/09/varo-bank-raises-510m-at-a-2-5b-valuation/.{{cite web}}: Missing or empty |title= (help)