Calgary neobank Neo Financial joined a handful of tech companies with unicorn status in Alberta following a round led by Valar Ventures.
Canadian fintech company Neo Financial recently became the latest company to attain unicorn status after concluding a $145 million (CAD$185 million) Series C exercise. The Calgary-based digital bank with over 1 million customers stated that New York-based Valar Ventures led the funding round. Other participating investors included Tribe Capital, Altos Ventures, Blank Ventures, Gaingels, Maple VC, and Knollwood Advisory.
In addition to the funding round, Neo Capital also offered a secondary share sale to new investors. Under this arrangement, early investors and employees of the neobank could sell a portion of their shares to new investors. The latest funding exercise brings Neo Financial’s total funding, since its inception back in 2019, to $234.7 million, or CAD$299 million.
The Canadian fintech’s unicorn status of over $1 billion is denominated in Canadian dollars. In US dollars, Neo Financial is worth $784.8 million-plus.
Neo Financial Looks to Leverage Trappings of Unicorn-hood Towards Ultimate Service Goals
Neo Financial intends to leverage the latest funding round toward its ultimate goal of being the one-stop-shop for all Canadian-related financial services. As part of this, the company is investing in creating new and innovative products and features for consumers and businesses. In addition, Neo Capital also intends to launch its mortgage product later this year and consolidate its position in Quebec.
Andre Charoo, founder and general partner at Neo investing partner Maple VC, praised the Canadian fintech’s industry potential. According to Charoo, Neo Financial has already returned (unrealized) around one-third of Maple’s second fund so far. Speaking about Neo’s success factor, Charoo also stated via email:
“Neo is the fastest growing company I have seen in Canada… I believe Neo has a shot at owning at least 10% of the aggregated $550B banking sector in Canada (i.e. $50B) due to the network effects it has created with its unique merchant loyalty program.”
With its newfound unicorn status, Neo Financial joins a small elite group of tech startups in Alberta that also claim that status. Weighing in on this feat, Paul Lee a partner at one of the participating investors, Tribe Capital, said:
“We spend a lot of time working with a special subset of companies that hit the benchmarks right out of the rails, and Neo fits that picture. The numbers speak for themselves, with Neo.”
Andrew Chau, co-founder and CEO of Neo Financial also touched on his company’s collaborative benefits.
“By working with businesses to embed their offerings into the way that consumers shop, Neo is proving to be a powerful financial partner,” said he.
Founded by Andrew Chau and Jeff Adamson, Neo Financial already offers several products and services. These include cash-back rewards as well as savings. Chau and Adamson are also co-founders of food delivery app Skip the Dishes, as well as Kris Read.
Neo Financial also offers “Neo Invest”, which it claims is the first actively managed, fully digital investment vehicle in Canada.