Stack Capital Group Inc. Completes $5 Million USD Portfolio Investment into Varo Bank - The First and Only Fintech with a US Bank Charter
TORONTO, Sept. 13, 2021 /CNW/ - Stack Capital Group Inc. ("Stack Capital") (TSX: STCK) (TSX: STCK.WT) is pleased to announce that it has completed an investment in the amount of $5 million USD into Varo Money, Inc., the parent company to Varo Bank, N.A., (collectively "Varo") – a member of the 2021 Forbes Fintech 50 list, No. 7 on the recent Inc. 5000 list, and the first all-digital bank in the US with a national bank charter. Stack Capital invested directly into Varo's Series E $510 million USD oversubscribed funding round which included several other prominent private equity funds and hedge fund investors.
Varo has an impressive management team led by Colin Walsh, a former American Express executive who made the bet early in Varo's development to seek a US national bank charter. In the last 13 months since obtaining its bank charter, Varo has doubled its opened accounts to four million and tripled its revenue. This charter allows Varo to provide the highest standards of consumer protection while eliminating banking intermediaries. Today, Varo offers checking accounts with access to two-day early pay day, savings accounts with easy autosaving tools, fast and accessible short-term credit with Varo Advance and a rewarding cashback program with Varo Perks. The bank charter allows Varo to expand into a broad array of integrated products nationwide, including retirement accounts (ie. IRAs), credit cards (ie. the upcoming Varo Believe card), home equity loans and more.
Varo's mobile-first structure with no physical branches, lowers the cost to serve and enables the company to operate without charging its clients overdraft fees, or requiring minimum monthly balances, representing a significant competitive advantage over traditional financial service providers. Varo's target market consists of roughly 180 million "battler and builder" banking clients who historically have been overcharged, underserved, or left out entirely by existing financial service providers.
"This investment in Varo is an exciting inaugural portfolio company for Stack Capital with long-term growth potential", stated Jeff Parks, CEO of Stack Capital. "Varo's ability to eliminate the intermediary with its US bank charter will allow the company to create more opportunity and value for its underserved customers and along with its new capital, enable the business to continue to drive future growth."
About Stack Capital
Stack Capital is an investment holding company and its business objective is to invest in equity, debt and/or other securities of growth-to-late-stage private businesses. SC Partners Ltd. (the "Manager") has taken the initiative in creating the Company and acts as the Company's administrator and is responsible to source and advise with respect to all investments for the Company.
For more information, please visit our website at www.stackcapitalgroup.com
SOURCE Stack Capital Group Inc.
Brian Viveiros, VP, Corporate Development and Investor Relations, 647.280.3307, [email protected]
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