After raising $1 billion, fintech Varo closes another $29 million, replaces founder CEO

Fintech Varo has been hoping to raise a $55 million Series G round but has, so far, closed on $29 million to date, according to a recent SEC filing.

Varo declined to comment on this new round but the fintech has raised just over $1 billion in funding since its 2015 inception, according to PitchBook. Fintech Business Weekly author Jason Mikula and Crowdfund Insider both reported the news of the raise earlier this week (here and here).

It wouldn’t be the first time its fundraising didn’t go as hoped for Varo. In 2023, Varo raised a $50 million equity round at a lower valuation ($1.85 billion post-money) than its massive, “oversubscribed” $510 million Series E in 2021. That 2021 round valued it at $2.5 billion post-money, according to PitchBook. 

In somewhat of a surprise move, CEO and founder Colin Walsh recently announced he was stepping down, with Gavin Michael replacing him as chief executive. (Michael was previously CEO at the publicly traded cryptocurrency exchange Bakkt; his LinkedIn profile shows he assumed a leadership role at Varo in November of 2024.) 

When asked about speculation that Walsh was forced to resign, a company spokesperson denied that was the case, telling TechCrunch: “This transition is about the next phase of Varo’s evolution.”

The spokesperson pointed to Michael’s experience as Bakkt CEO and previous leadership roles at Citi and JPMorgan Chase as being “exactly what Varo needs for its next chapter.”

“Colin has known Gavin for 19 years, and after working closely with him these past months, Colin is confident he’s the right leader to build on the company’s foundation that he built for the last decade, while maintaining Varo’s commitment to financial inclusion,” the spokesperson added.

Walsh will remain on Varo’s board and, as a founder, still maintains a significant stake in the company, the spokesperson said. 

Varo was a highly watched fintech in its earlier years because the startup obtained its national bank charter in 2020 — a move that made it the first-ever all-digital nationally chartered U.S. consumer bank. In a 2022 interview with TechCrunch, Walsh said that the company was “still seeing strong customer growth” and still had “a clear path to profitability.” But as of early 2024, the company was not yet profitable. And according to a December 2024 call report, it had reported a loss of nearly $65 million.

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