Draft:Varo Bank
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Company type | Private |
---|---|
Industry | |
Founded | 2015San Francisco, United States | in
Founder | Colin Walsh |
Headquarters | Salt Lake City, Utah , U.S. |
Area served | United States |
Key people | |
Number of employees | 700[1] (2021) |
Parent | Varo Money |
Capital ratio | 62.7% (2021)[2] Tier 1 |
Website | varomoney |
Varo Bank is an American neobank headquartered in Salt Lake City, Utah. Formally launched in 2017, Varo is the first neobank to receive a national bank charter from the Office of the Comptroller of the Currency. The company is led by founder and chief executive officer Colin Walsh.
History
[edit]Varo Bank parent company Varo Money was founded in 2015 in San Francisco, California, by Colin Walsh.[3] Walsh initially raised US$27 million from Warburg Pincus to start the company and developed a mobile banking app that was released in 2017. The app allowed users to make direct deposits, get a debit card, and pay bills online. Users are not charged overdraft, ATM, or minimum balance fees. Accounts were opened in partnership with The Bancorp Bank.[4] Walsh began the process of seeking a national bank charter as a neobank in 2017.[5] Varo raised an additional US$45 million in 2018 from Warburg Pincus and The Rise Fund.[6] The Federal Deposit Insurance Corporation granted approval for Varo to use federal deposit insurance in February 2020.[7] Late that year, the Office of the Comptroller of the Currency granted the charter, making Varo the first fintech company to receive a national bank charter in the United States.[8][3][9] Following the grant of its charter, Varo purchased its two million customer accounts from Bancorp.[3] Chad Brownstein and Russell Westbrook were early investors in the company.[10]
Varo was criticized in 2021 for closing customer accounts in error. It responded by ensuring the affected customers' money was returned with an additional US$100.[2] By September 2021, Varo raised US$992 million, including US$510 million in Series E funding led by Lone Pine Capital.[11][12] At the time, Varo had approximately 4 million opened accounts. That year, Varo doubled its workforce to approximately 700 employees.[13] The neobank laid off 75 employees as a cost cutting measure in July 2022.[14]
Operations
[edit]Varo is headquartered in Salt Lake City, Utah. It moved its headquarters from San Francisco in 2020.[5] The company is led by founder and chief executive officer Colin Walsh,[3] chief operating officer Pepe Porrata,[5] chief financial officer Thibault Fulconis,[15] and chief technology officer Sachin Shetty.[16] Varo products include checking and savings accounts,[3] "Varo to Anyone", which allows customers to instantly transfer funds to any American debit card,[17][18] free tax filing services,[19][20] credit cards, and cash advances. It is integrated with Zelle.[21] [22]
Varo was named one of Inc.'s "Best in Business" from 2021 to 2023.[23] It was also recognized by Forbes as a member of the magazine's "Fintech 50" and by Fast Company as one of the "Most Innovative Companies in Finance" in 2021. It was recognized by CNBC as one of the "World's Top Fintech Companies" in 2024.[24][25][26]
References
[edit]- ^ Lang, Hannah (September 9, 2021). "Digital-only bank with ties to NBA star is expanding to Charlotte. Here's what we know". The Charlotte Observer. Retrieved July 12, 2024.
- ^ a b Wack, Kevin (May 17, 2021). "Varo 'on track' to be profitable by 2023 even as losses pile up". American Banker. Retrieved July 12, 2024.
- ^ a b c d e Lubbers, Payne (July 31, 2020). "Varo Becomes First Consumer Fintech to Land a National Charter". Bloomberg News. Retrieved July 12, 2024.
- ^ Lawler, Ryan (July 25, 2017). "Mobile banking startup Varo Money has applied for a bank charter". TechCrunch. Retrieved July 31, 2024.
- ^ a b c Hudson, Caroline (September 9, 2021). "Fintech firm Varo Bank setting up East Coast hub in Charlotte, looks to hire hundreds". Charlotte Business Journal. Retrieved July 12, 2024.
- ^ Roof, Katie (January 18, 2018). "Varo Money raises $45 million for mobile banking without fees". TechCrunch. Retrieved July 31, 2024.
- ^ McCaffrey, Orla (February 10, 2020). "Varo Moves Closer to Becoming a Bank". The Wall Street Journal. Retrieved July 31, 2024.
- ^ Walden, Stephanie; Whiteman, Doug (June 24, 2021). "What Is A Neobank?". Forbes. Retrieved July 12, 2024.
- ^ Crosman, Penny (August 3, 2020). "It's official: Varo Money has national bank charter". American Banker. Retrieved July 12, 2024.
- ^ Adler, Maxwell (January 23, 2024). "NBA's Westbrook Joins Group Taking Over Bankrupt Arizona Sports Park". Bloomberg News. Retrieved July 12, 2024.
- ^ Kauflin, Jeff (September 9, 2021). "Digital Bank Varo Raises $510 Million At $2.5 Billion Valuation". Forbes. Retrieved July 12, 2024.
- ^ Noto, Grace (March 20, 2024). "Ex-Zillow, Amazon alum takes Varo CFO seat". Banking Dive. Retrieved July 12, 2024.
- ^ Calvey, Mark (September 9, 2021). "Varo Bank raises hundreds of millions amid dramatic growth". San Francisco Business Times. Retrieved July 12, 2024.
- ^ Pugh, Alex (July 22, 2022). "Digital challenger Varo Bank lays off 75 employees in effort to cut costs". FinTech Futures. Retrieved July 12, 2024.
- ^ Crosman, Penny (August 21, 2018). "Bank of the West exec bolts for startup, sees chance 'to redefine retail banking'". American Banker. Retrieved July 31, 2024.
- ^ Pugh, Alex (March 31, 2023). "US challenger Varo Bank names Sachin Shetty as new CTO". FinTech Futures. Retrieved July 12, 2024.
- ^ Hrushka, Anna (September 21, 2023). "Varo aims to displace Venmo, Cash App volume with new P2P feature". Banking Dive. Retrieved July 12, 2024.
- ^ Enloe, Brooke; Cetera, Mike (October 17, 2023). "Varo Announces 'Varo To Anyone,' New P2P Feature For Banking Customers". Forbes. Retrieved July 12, 2024.
- ^ Cross, Miriam (January 17, 2024). "Varo has embedded free tax filing in its app". American Banker. Retrieved July 12, 2024.
- ^ Schilling, Erin (January 25, 2024). "Bank's Free Tax Prep Feature Goes Head to Head With IRS Tool". Bloomberg Tax. Retrieved July 12, 2024.
- ^ Witkowski, Rachel; Rueger, Abigail (July 16, 2024). "Varo Bank Review July 2024: Free checking and savings with a 5.00% APY". Fortune. Retrieved July 31, 2024.
- ^ Rowan, Lisa; Aldrich, Elizabeth (July 23, 2024). "Varo Bank Review 2024". Forbes. Retrieved July 31, 2024.
- ^ "Best in Business 2023". Inc. Retrieved July 12, 2024.
- ^ Kauflin, Jeff (June 8, 2021). "Fintech 50 2021: The Newcomers". Forbes. Retrieved July 31, 2024.
- ^ Parrish, Cayleigh (March 9, 2021). "The World's Most Innovative Companies". Fast Company. Retrieved July 31, 2024.
- ^ Browne, Ryan (July 9, 2024). "The World's Top 250 Fintech Companies: 2024". CNBC. Retrieved July 31, 2024.