Varo Secures $29 Million in Fresh Capital Amid Valuation Decline

Varo, the US digital bank, has closed on $29 million in funding as part of a broader $55 million investment round. Despite having raised over $1 billion to date, Varo has struggled with persistent losses and a declining valuation.

The company’s previous funding round in 2023 saw it raise $50 million at a $1.5 billion valuation, significantly lower than its $2.5 billion peak in 2021, when it secured $510 million in Series E financing.

Founded in 2015 by former Wells Fargo executive Colin Walsh, Varo made history in 2020 as the first US consumer fintech to receive a national bank charter, allowing it to provide FDIC-insured banking services.

As part of a leadership transition, Walsh has stepped down as CEO, with Gavin Michael, former CEO of cryptocurrency exchange Bakkt, stepping in to lead the company.