Canadian FinTech Neo Raises $185 Million at Unicorn Valuation
One of Canada’s fastest-growing FinTech players is celebrating another milestone. This week, Neo Financial announced that it had closed a $185 million round. The Series C was led by Valar Ventures with participation from Tribe Capital, Altos Ventures, Maple VC, Blank Ventures, Gaingels, and Knollwood Investment Advisor. Notably, the round was raised at a valuation of over $1 billion, securing Neo’s “unicorn” status (at least in Canadian dollars). To date, the company has now raised a total of $299 million since launching in 2019.
True to its name, Neo Financial is a neobank that aims to reinvent the way Canadians spend, save, and grow their money. In addition to checking and savings products, the company also offers a unique credit card that offers cashback from more than 7,000 partner brands. What’s more, customers can choose to boost their cashback potential by paying a monthly fee to move up to Plus or Ultra. Neo also offers a secured and non-secured version of the card.
According to Neo, they currently have more than 1 million users across Canada. Elsewhere, by achieving unicorn status in less than three years, the FinTech boasts being one of the fastest Canadian companies to achieve such success. Going forward, the company says it wants to become a “one-stop shop,” offering financial services to all Canadians consumers and retailers.
Speaking more to the vision and approach at Neo, the company’s co-founder and CEO Andrew Chau said, “By working with businesses to embed their offerings into the way that consumers shop, Neo is proving to be a powerful financial partner. We set out to build an iconic brand that would bring businesses and customers together, adding more value and creating products that Canadians love by giving them a new way to manage their money.” Chau continued, “Today, more than a million Canadians hold an account with Neo, and this investment will allow us to continue pushing the boundaries of financial services and innovate in ways that benefit all Canadians.” Meanwhile, Valar Ventures founding partner Andrew McCormack said of the startup, “The pace at which this team releases new products and grows its customer base is among the fastest we have seen in our careers. As a result, Neo can be the biggest disruption the Canadian banking industry has seen in decades, and their influence on financial services available to Canadians will impact the lives of millions.”
Looking at Neo Financial’s offerings, it’s easy to see why the company has caught the attention of investors and seen impressive growth in terms of customers. And while the FinTech seems intent on conquering Canada first, one can’t help but wonder if they might consider an expansion into the United States. Given their current trajectory, such a move wouldn’t be surprising, making Neo another neobank worth watching.