Neo Financial, a Canadian digital bank, has raised C$185m ($145m) in a Series C fundraising round at a valuation of more than C$1bn ($780m).
The funding round was led by Valar Ventures, a US-based venture capital fund. It also saw participation from new and existing investors, including Tribe Capital, Altos Ventures, Blank Ventures, Maple VC, Knollwood Investment Advisory, and Gaingels.
Neo Financial was established in 2019. Its products include Neo Card, Neo Money, Neo Invest, and Neo Mortgage.
The company has partnerships with Home Depot, Hudson’s Bay, Boston Pizza, H&R Block, Goodfood, and 7,000 other retailers in Canada for whom it helps in modernising their loyalty programmes and financial service offerings.
Neo Financial is also said to have expanded beyond offering personalised loyalty card programmes to launch co-branded card programmes, point of sale installment financing, ‘buy now pay later’ options (BNPL), as well as subscription-based loyalty services for online and brick and mortar retailers.
Valar Ventures founding partner Andrew McCormack said: “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.
“We see that Neo’s approach to partnering with retailers is a huge win for both the companies and their customers.”
So far, Neo Financial has raised C$299m ($233m), which comes from a C$64m ($50m) Series B round and a C$50m ($39m) Series A round.
Apart from the Series C fundraising round, the Canadian fintech company also offered a secondary share sale. This enabled early investors and employees to divest a part of their shares to new investors, said the digital bank.
The company said that it will invest in developing new and innovative products and features for consumers and businesses, launch its mortgage product later this year, and bolster its position in Quebec.
Neo Financial co-founder and CEO Andrew Chau said: “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.
“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.”