Fintech company Varo has been working to raise $55 million in its Series G funding round but has so far secured $29 million, according to a recent SEC filing. While Varo has not commented on the latest funding, data from PitchBook reports that the company has raised over $1 billion since its founding in 2015. The news of this funding round was first reported by Fintech Business Weekly’s Jason Mikula and Crowdfund Insider.
In 2023, the company raised $50 million at a lower valuation of $1.85 billion post-money. This was a significant drop from its $510 million Series E round in 2021, which was oversubscribed and valued the company at $2.5 billion post-money.
Amid this funding, Varo is also undergoing a leadership transition. The Founder and CEO Colin Walsh recently announced his departure, with Gavin Michael stepping in as the new chief executive. Michael previously served as the CEO of cryptocurrency exchange Bakkt and has held leadership positions at Citi and JPMorgan Chase. According to his LinkedIn profile, he took on a leadership role at Varo in November 2024.
There has been speculation about whether Walsh was forced to step down, but a company spokesperson denied this, stating:
“This transition is about the next phase of Varo’s evolution.”
The company emphasized that Michael’s background in fintech and banking makes him well-suited to lead Varo into its next stage of growth. The spokesperson also noted that Walsh and Michael have known each other for 19 years, and after closely collaborating in recent months, Walsh believes Michael is the right choice to build on Varo’s foundation.
Walsh will remain on Varo’s board of directors and retains a significant stake in the company.
Varo gained significant attention in the fintech space when it became the first all-digital, nationally chartered U.S. consumer bank in 2020. The charter gave Varo a competitive edge by allowing it to offer banking services without relying on third-party banks.
Despite seeing strong customer growth, Varo has yet to achieve profitability. In a 2022 interview, Walsh expressed confidence in the company’s growth trajectory and its “clear path to profitability.” However, as of early 2024, Varo had not yet turned a profit.
A December 2024 financial report revealed that the company reported a loss of nearly $65 million, highlighting ongoing financial challenges.
With fresh funding and new leadership, Varo is now focusing on strengthening its financial position and executing its long-term vision. Whether the company can achieve profitability under Michael’s leadership remains to be seen, but with over $1 billion in total funding, Varo continues to be a major player in the digital banking industry.
