Varo Bank Raises $29M, Founder CEO Replaced

Varo's Funding and Leadership Transition

Fintech Varo is currently seeking to secure $55 million in a Series G funding round. However, recent filings with the Securities and Exchange Commission (SEC) indicate that, to date, only $29 million has been closed.

Recent Funding History

Varo has refrained from commenting on this current funding effort. Nevertheless, data from PitchBook reveals that the fintech company has accumulated over $1 billion in funding since its establishment in 2015.

Reports regarding this funding round were initially published by Jason Mikula of Fintech Business Weekly and Crowdfund Insider earlier this week.

Past Fundraising Challenges

This isn't the first instance where Varo's fundraising hasn't fully met expectations. In 2023, the company completed a $50 million equity round, but at a reduced valuation of $1.85 billion post-money.

This contrasts with the substantial $510 million Series E round raised in 2021, which had valued Varo at $2.5 billion post-money, as per PitchBook’s records.

Change in Leadership

In a recent development, Colin Walsh, the CEO and founder, announced his departure. Gavin Michael has been appointed as the new chief executive.

Previously, Michael served as CEO of Bakkt, a publicly traded cryptocurrency exchange. His LinkedIn profile confirms he began a leadership position at Varo in November 2024.

Addressing Resignation Speculation

A company spokesperson addressed speculation surrounding Walsh’s resignation, firmly denying any forced departure. They stated to TechCrunch that the transition is focused on “the next phase of Varo’s evolution.”

The spokesperson highlighted Michael’s experience leading Bakkt, as well as his prior roles at Citi and JPMorgan Chase, as crucial assets for Varo’s future.

“Colin has known Gavin for 19 years, and after close collaboration in recent months, Colin is confident that he is the appropriate leader to expand upon the foundation built over the last decade, while upholding Varo’s dedication to financial inclusion,” the spokesperson elaborated.

Walsh's Continued Involvement

Walsh will continue to serve on Varo’s board of directors and, as a founder, retains a significant ownership stake in the company.

Varo's Unique Position and Financial Status

Varo garnered significant attention early on by becoming the first all-digital, nationally chartered U.S. consumer bank in 2020. During a 2022 interview, Walsh indicated the company was experiencing “strong customer growth” and had “a clear path to profitability.”

However, as of early 2024, the company had not yet achieved profitability. A December 2024 call report revealed a reported loss of approximately $65 million.

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