Varo Bank, a US-based digital banking services provider backed by automotive insurance provider Progressive, has received $63m in a round led by NBA Basketball professional Russell Westbrook’s impact investment firm, Russell Westbrook Enterprises.
Private equity firm TPG’s impact investment vehicle, The Rise Fund, also participated in the round, along with Warburg Pincus, Gallatin Point Capital and funds managed by BlackRock. Russell Westbrook Enterprises was advised by Jefferies.
Founded in 2015, Varo has built a digital banking platform that allows customers to open current and savings accounts without a minimum balance requirement or monthly fees.
The company has a particular focus on social impact initiatives and has enlisted Westbrook as an advisor on its impact programmes for ethnic minorities and African American communities.
This funding will enable Varo to continue development of its product roadmap and implement new credit, savings and transaction banking features into its platform. Its total funding is now at least $482m.
Gallatin Point Capital and The Rise Fund co-led a $241m series D round for the company in June 2020 that included Progressive and HarbourVest Partners.
Gopher Asset Management, Warburg Pincus and The Rise Fund took part in Varo’s $100m series C round in mid-2019. The last two had co-led its $45m series B round the year before, after Warburg Pincus backed a $27m round for the company in 2016.
Law firm Manatt, Phelps & Phillips’ venture capital fund, Manatt Venture Fund, Silicon Valley Bank and Gaingels are among the company’s earlier investors.