Varo Bank, a US-based digital bank, has raised USD 123.9 million in a Series G funding round led by existing investor Warburg Pincus and new investor Coliseum Capital Management.
The funding round, announced in February 2026, also included participation from existing investor Northview, which increased its stake in the company. Alongside the capital raise, Varo Bank has appointed two new directors to its board, namely Alice Milligan and Kevin Watters.
According to the company's CEO, Gavin Michael, the new capital and board additions are intended to support Varo Bank's next phase of growth while maintaining operational discipline and customer focus.
Platform growth and lending expansion
Varo Bank launched its app in 2017 and operates as one of the first all-digital nationally chartered banks in the US. The platform uses proprietary machine-learning models to supplement traditional credit data, aiming to broaden lending access beyond conventional credit scoring methods.
Varo Bank's data suggests that through its Varo Advance and Varo Line of Credit products, the bank generated USD 547 million in lending volume in 2025, reflecting increased demand for its credit offerings. Varo Bank also offers high-yield savings accounts and cashback debit card products as part of its broader banking and credit-building services.
The company reported revenue growth and cost reductions in 2025, though specific figures were not disclosed.
Coliseum Capital Management's co-founder and Managing Partner, Chris Shackelton, described the investment as reflecting confidence in Varo Bank's leadership and growth potential. The firm cited the bank's efforts to differentiate from traditional banks and expand its customer value proposition as key factors in its decision to invest.
The newly appointed board members highlighted Varo Bank's combination of technology-first customer experience with the regulatory governance required of a nationally chartered bank. The board expansion is expected to support the scaling of Varo Bank's lending and banking platform.
Varo Bank operates under federal banking regulations and is a member of the Federal Deposit Insurance Corporation (FDIC).
