The San Francisco-based online-only bank raised the amount at an undisclosed valuation to launch its product, with the ultimate aim of seeking a banking charter. Next 12-24 months will be interesting to see how the business model will evolve
Warburg Pincus led the round. This investment marks the San Francisco company’s first public funding round to date. David Coulter, a special limited partner of Warburg Pincus, will become a member of Varo’s board of directors with the investment. CEO Colin Walsh said he co-founded the Varo Money to help users develop positive spending and borrowing habits. Walsh previously served as CEO of the United Kingdom for American Express. For now, Varo plans to provide debit card, deposit and lending products via a mobile app and a 24/7 digital financial coach that offers analysis of spending and real-time budgeting. The company will start testing its app later this year. The company’s eventual goal is to seek a banking charter, according to the Wall Street Journal. Varo will seek a multi-year sponsor-bank arrangement before exploring setting up its own bank.