San Francisco based mobile banking startup Varo Money has raised a $45m Series B led by Warburg Pincus and The Rise Fund.
Investors believe there’s a huge market opportunity to disrupt big banks and build a more cost-effective and consumer-friendly platform that appeals to Millennials. Varo offers an FDIC-backed bank account backed by The Bancorp Bank. Varo also applied for its own bank charter. Varo provides loans as well. The business uses a “machine learning algorithm to predict incoming income and their bills,” said Walsh. This helps them target customers for loans at just the right time. The startup believes one of its biggest selling points is that it doesn’t have overdraft fees, minimum balance charges or foreign transaction fees. The only fees are for ATMs that aren’t in-network. (The app shows you which partnering machines are nearby.)