Varo Money, a mobile-only neobank startup founded by a former American Express and Wells Fargo executive, has raised more than $27 million in a funding round led by private equity giant Warburg Pincus.
Varo will provide debit card, deposit and lending products via its mobile app and promises to act as a "24/7 digital financial coach" that will offer proactive insights, analysis of spending and real-time budgeting.
The San Francisco-based startup is hoping to start testing its app with customers later this year and is looking for a sponsor bank. However, in the longer term it plans to seek its own charter.
Varo is led by co-founder Colin Walsh, who was previously the CEO of American Express in the UK and has also had stints in senior roles at Lloyds Banking Group and Wells Fargo. Walsh's co-founders include former Lending Club VP of technology Mykola Klymenko as CTO and chief data officer Assaf Guery and chief design officer Roger Van Duinen.
As part of the funding round, Warburg Pincus's David Coulter, a former chairman and CEO of BankAmerica Corporation, will join Varo’s board of directors.
Says Walsh: "The US banking market is undergoing a huge transformation, and Varo is ideally positioned to offer a unique and unrivalled banking service to our target customer base. We have the team, strategy, product vision and execution capabilities to change the way that people interact with their banks - empowering customers to achieve a better financial future."