Varo Money, a San Francisco-based challenger bank hopeful, has landed $241 million in a Series D funding round.
The capital raise was co-led by new investor, Gallatin Point Capital, and existing investor, The Rise Fund.
Other participants in the round included HarbourVest Partners and Progressive Insurance. To date, the fintech has raised $419.4 million.
The fintech will use the fresh capital towards developing new financial products, and obtaining a US banking licence, which would allow Varo to hold its own deposits, as well as roll out credit cards, loans, and additional savings products.
“This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion,” says founder and CEO Colin Walsh in a statement.
In February, the company became the first of its kind to clear the final hurdle in its journey to securing a full national bank charter. Varo is hopeful it will become the first and only fully digital bank to receive a US national charter.
Without a licence, the fintech has been offering its banking services with the help of Bancorp Bank to insure user’s deposits for up to $250,000 under the Federal Deposit Insurance Corporation (FDIC).
The payments company, Square, landed a conditional licence with the FDIC in March, but this is a slightly different banking licence to the one Varo has applied for, known as a special industrial loan company license which is designed for less traditional financial firms.