NEO Financial Surpasses 1 Million Customers, Closes CA$185M Series C at Unicorn Valuation

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TechCrunch | Mary Ann Azevedo | May 5, 2022

Source: NEO Financial

Canadian digital bank Neo Financial has raised $145.2 million (CAN$185 million) after surpassing the 1 million customer mark, the company announced today.

Valar Ventures led the investment, which brings Neo’s total funding to $234.7 million (CAN $299 million) since its 2019 inception, and values the company at over $784.8 million. In Canadian dollars, this means that Neo has achieved unicorn status, or a valuation of over $1 billion. Also participating in the round were Tribe Capital, Altos Ventures, Blank Ventures, Gaingels, Maple VC and Knollwood Advisory.

See: Neo Financial Launches a Wealth Management Platform for Retail Investors – Neo Invest

Neo Financial offers a variety of products to its customers, including cash-back rewards and savings. It expanded into investing in April with a private wealth management product, and plans a mortgage offering for later this year as part of its effort to be a “one-stop shop for all financial services for Canadians and retailers.”

Indeed, the company says that its partnerships, which include Hudson’s Bay, The Home Depot, H&R Block, Boston Pizza, Goodfood and 7,000 other local and national retailers, have accelerated in the past year, “as retailers search for ways to modernize their loyalty programs and financial service offerings.”

Neo has also expanded beyond just offering personalized loyalty card programs and into launching co-branded card programs, “buy now, pay later” options (BNPL), point of sale installment financing and subscription-based loyalty services for both online and brick and mortar retailers.

See: Fintech Card Space is Growing: Brim Financial, Float, Caary Capital, Jeeves, Neo Financial

In an interview with TechCrunch, Neo co-founder and CEO Andrew Chau shared:

[him] and his co-founders Jeff Adamson, Chris Simair and Kris Read started Neo to challenge the Big Five banks that own some 90% of the country’s market share. Notably, it only went live in January of 2021, so it has managed to surpass 1 million customers in a relatively short period of time. We’ve built all our financial infrastructure, our banking core, from scratch. And that really provided us with this advantage to quickly innovate and drive a ton of product velocity.

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