In a round led by Valar Ventures, Neo Financial, a fintech based in Alberta, Calgary and Manitoba, Winnipeg, has raised $50 million ($64 million CAD) in new equity funding. The fresh capital takes the Canadian company’s total funding to $89 million ($114 million CAD), and will help enable the company to add talent and launch new integrated fintech partnerships with retailers.
“Reimagining the way Canadians bank is no easy feat, but it’s a challenge that our team is taking head on,” Neo co-founder and CEO Andrew Chau said. “This raise is validation of not only the problem Neo is tackling, but (also) our team’s ability to solve it.”
Going live last year, Neo offered a high-interest savings account, and a no-fee Mastercard that offers up to 6% cash back at partnering companies and at least 1% cashback across all other spending, called Neo Card. Since its 2020 launch Neo has inked partnerships with more than 4,000 retailers, including a strategic partnership with Hudson’s Bay to power the company’s new Hudson’s Bay Mastercard offering. Today’s funding announcement comes on the heels of Neo’s purchase of office space in Winnipeg’s Exchange District, enabling the company to open a second headquarters in the city.
Joining today’s Series B were new investors Greenoaks Capital – which has backed fintechs and ecommerce innovators like Robinhood and Stripe – as well as South Korean challenger bank Toss, a unicorn valued at more than $7.3 billion ($9.4 billion CAD). Other investors included Breyer Capital, Golden Ventures, Afore Capitaal, Inovia Capital, Thornvest, and Maple VC. In addition to leading Neo’s Series B round, announced today, Valar Ventures also led the company’s previous round of funding – a $19.5 million (CAD $25 million) Series A round – in December 2020.
“As one of the largest Series B raises for a Canadian fintech, this new round of funding will allow us to continue building innovative products and features for all Canadians and businesses,” Chau said. “It’s an exciting time to grow our team from both our Calgary and Winnipeg offices.”
Neo Financial was founded by two of the co-founders of SkipTheDishes, an online restaurant food delivery firm launched in 2012. SkipTheDishes was acquired by JustEast four years later for $200 million.