Fast-growing Neo Financial races to billion-dollar status

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This article was published 05/05/2022 (1416 days ago), so information in it may no longer be current.

Neo Financial is now a billion-dollar company.

The three-year-old fintech that is looking to create a banking company that is not a bank, just raised another $185 million from venture capital investors to help fund the creation of new products and services.

The company, founded by former SkipTheDishes founders, features dual head offices in Calgary and Winnipeg.

It now has a staff of more than 100 people in Winnipeg, most hired just over the past year.

The company launched with a MasterCard-branded card and a chequing/savings account all which operates online.

Last month it launched an investment product with no minimum initial investment needed including the kind of wealth management services that most other firms require up to $1 million to be eligible for.

Company president Andrew Chau said later this year it will be launching Neo mortgages.

Its credit card and savings products have attracted very strong customer support, attracting more than 1 million clients since the company launched in 2019.

Chau said the additional capital will help it build even more products to add to the growing suite that includes ‘buy now pay later’ options, point of sale installment financing, and subscription-based loyalty services for both online and brick and mortar retailers.

The credit card features cash back and rewards features with now more than 7,000 retailers, a number that has almost doubled in the last year. Retail partners include brands like Hudson’s Bay, H&R Block, Boston Pizza, Goodfood.

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“There has been lots growth in the past year especially coming out of the pandemic as retailers, both small businesses and national brands, look for ways to modernize their offering and service their customers,” Chau said. “We have been able to be right alongside them to help the do that.”

The $185 million Series C fundraising round announced today makes Neo Financial the latest Canadian startup to hit the billion-dollar valuation, making it one of the quickest Canadian startups to reach unicorn status.

It brings Neo’s total funding to $299 million. Valar Ventures continues to its lead investor, alongside new and existing investors, including Tribe Capital, Altos Ventures, Blank Ventures, Gaingels, Maple VC, and Knollwood 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.

martin.cash@freepress.mb.ca