Neo Financial, a next generation financial technology company, announced their $185 million Series C fundraising round at over a $1 billion valuation. This brings Neo’s total funding to $299 million, with Valar Ventures as their lead investor, alongside new and existing investors, including Tribe Capital, Altos Ventures, Maple VC, Blank Ventures, Gaingels, and Knollwood Investment Advisory. In addition to the fundraising round, a secondary share sale was also offered, allowing early investors and employees to sell a portion of their shares to new investors.
“We see that Neo’s approach to partnering with retailers is a huge win for both the companies and their customers.”
Since its inception in 2019, Neo Financial has grown to over 1 million customers and reached a ‘unicorn’ valuation in less than 3 years, making it one of the fastest Canadian companies to achieve these milestones. Driven to challenge the status quo of financial services, Neo’s hypergrowth has been fuelled by its product line that has expanded beyond credit and rewards into everyday spending and savings, as well as Canada’s first fully digital and actively managed investment experience.
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Neo’s partnerships, which include Hudson’s Bay, Home Depot, H&R Block, Boston Pizza, Goodfood, and 7,000 other national and local retailers, have accelerated in the past year, as retailers search for ways to modernize their loyalty programs and financial service offerings. Neo has also expanded beyond just offering personalized loyalty card programs and into launching co-branded card programs, ‘buy now pay later’ options (BNPL), point of sale installment financing, and subscription-based loyalty services for both online and brick and mortar retailers.
“By working with businesses to embed their offerings into the way that consumers shop, Neo is proving to be a powerful financial partner. 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,” said Andrew Chau, co-founder and CEO of Neo Financial.
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“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,” said Andrew McCormack, a founding partner of Valar Ventures. “We see that Neo’s approach to partnering with retailers is a huge win for both the companies and their customers.”
“Previously, we had evaluated a number of consumer-focused challenger fintechs globally, and developed a deep understanding on what it would take to win in this market. We were impressed by Neo and the team, with their metrics outperforming many of our benchmarks. It’s equally impressive that they’re doing this in the Canadian ecosystem, where incumbents are entrenched,” said Paul Lee, Partner at Tribe Capital. “We’ve been tracking Neo’s founding team closely since they founded SkipTheDishes, and we are thrilled to finally partner together.”
With this new funding round, Neo’s ambition is to be the ‘one-stop shop’ for all financial services for Canadians and retailers. Neo will invest in creating new and innovative products and features for consumers and businesses, launching its mortgage product later this year, and strengthening its position in Quebec. With a growing team of over 650 people and 7,000+ retailers on its platform, Neo is adding over 100 people across its Winnipeg and Calgary tech campuses this year.
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