San Francisco-based fintech company Varo Money announced the close of a $241 million Series D financing round on Wednesday. The round was co-led by new investor Gallatin Point Capital and existing investor The Rise Fund.
Varo’s mobile banking platform integrates saving and lending products with tools that encourage customers to build budgets, smooth cash flow and develop better savings practices. The company also enables users to connect with other financial accounts to make transfers and manage their money from one central place.
“This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion,” Colin Walsh, founder and CEO of Varo, said in a statement.
In July of 2017, the company applied to the Federal Deposit Insurance Corporation for a national bank charter. According to the company, Varo is now in the final stages of the application process, which is expected to be complete and approved by the end of the summer. Upon its approval, the company plans to begin offering credit cards and loans.
“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country,” Walsh said in a statement.
According to the company, Varo eliminates many of the small banking fees that can sometimes stand in the way of financial success. Users of the mobile banking platform don’t have to deal with any monthly fees, transfer fees, overdraft or foreign transaction fees.
“As the first fully digital national bank, Varo will bring our mission of financial inclusion to life and create more financially resilient — and thus healthier and stronger — communities,” Walsh continued.
The mobile banking platform has seen increased use as banks around the United States cut down on branch service to contain the spread of COVID-19.
“Since the onset of COVID we’ve seen an acceleration of consumers adopting digital banking,” Walsh said in an interview with Forbes. “There’s been a huge surge in deposits, a huge surge in payment activity, and a surge in customer accounts. Investors have seen what Varo is doing.”
The company also told Forbes that additional funds would be used to hire staff support and invest in new partnerships.
“In the midst of all the economic challenges people are facing right now, the digital economy can still be a force for good,” Maya Chorengel, co-managing partner of The Rise Fund, said in a statement.
According to the company, Varo has raised a total of $419.4 million in venture capital to date. HarborVest Partners and Progressive Insurance also participated in the round.
