Fintech company Varo is aiming to secure a $55 million Series G funding round but has only managed to acquire $29 million thus far, as revealed in a recent SEC filing.
Varo did not provide a comment regarding this funding round, yet it has successfully raised over $1 billion since its establishment in 2015, according to PitchBook.
This isn’t the first instance where Varo’s fundraising efforts haven’t met expectations. In 2023, the fintech secured a $50 million equity round at a reduced valuation ($1.85 billion post-money) compared to its heavily oversubscribed $510 million Series E round from 2021, which had valued the company at $2.5 billion post-money, as per PitchBook.
In a surprising announcement, CEO and founder Colin Walsh revealed that he would be stepping down, with Gavin Michael taking the helm as the new chief executive (Michael’s LinkedIn profile indicates he joined the leadership team at Varo in November 2024).
When questioned about claims that Walsh was pushed to resign, a spokesperson for the company clarified to TechCrunch: “This transition is part of Varo’s next evolution.”
The spokesperson highlighted Michael’s background as the CEO of the publicly traded crypto platform Bakkt and his previous leadership positions at Citi and JPMorgan Chase as precisely what Varo needs moving forward.
“Colin has shared a professional relationship with Gavin for 19 years. After collaborating closely in recent months, Colin believes Gavin is the right leader to further the foundational work he established over the last decade while upholding Varo’s commitment to financial inclusion,” the spokesperson added.
Walsh will continue to serve on Varo’s board and, as a founder, retains a significant shareholding in the firm, as per the spokesperson’s remarks.
Varo attracted significant attention in its formative years, particularly because it obtained a national bank charter in 2020 — a groundbreaking achievement that made it the first fully digital, nationally chartered consumer bank in the U.S. In a 2022 conversation with TechCrunch, Walsh noted that the firm was “still witnessing robust customer growth” and had “a clear route to profitability.” However, as of early 2024, the company was yet to achieve profitability. According to a December 2024 call report, it reported a loss nearing $65 million.
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