Varo Raises $123.9 Million in Growth Investment
Varo, the digital bank, recently announced a significant milestone by raising $123.9 million in what they termed a “growth investment.” This financial boost comes as Varo continues to expand its presence in the digital banking sector. The funding round was led by private-equity firm Warburg Pincus and new investor Coliseum Capital Management.
Key Highlights of the Investment:
- Varo welcomed two new directors to its board, Alice Milligan, former Chief Marketing Officer at Morgan Stanley, and Kevin Watters, an experienced banking professional with a background at JPMorgan Chase.
- The capital raise follows Varo’s adjusted operating income of $38.6 million for the fourth quarter, indicating a 7.7% increase from the previous year.
- Despite the growth in operating income, Varo reported a loss of $20.8 million for the fourth quarter of 2025, reflecting a wider loss compared to the previous year.
Insights into Varo’s Future Growth:
Varo’s CEO, Gavin Michael, expressed optimism about the company’s future trajectory, stating that the new capital infusion, partnership with Coliseum, and the addition of experienced banking leaders to the board will propel Varo into its next phase of growth. He emphasized Varo’s commitment to delivering value to customers while operating with discipline.
Milligan and Watters, the newly appointed directors, praised Varo for its innovative approach to customer experience and risk management, highlighting the bank’s unique positioning in the market. They expressed confidence in Varo’s potential to scale its lending and banking platform for everyday consumers.
Chris Shackelton, co-founder of Coliseum Capital Management, echoed this sentiment, stating that his company’s investment in Varo reflects their belief in the bank’s leadership team and growth prospects. He emphasized Varo’s potential to capture a significant market share and differentiate itself from traditional banks.
Conclusion:
The recent funding round and strategic additions to Varo’s board underscore the company’s commitment to driving innovation and growth in the digital banking landscape. With a strong foundation and a focus on customer value, Varo is poised to capitalize on emerging opportunities in the market.
For more information, please visit here.
