Varo Bank, which was recently granted a national bank charter in the US, has secured $63m investment in a round led by NBA star Russell Westbrook to drive forth its goal of financial inclusion among Americans.
Westbrook, a nine-time NBA All-Star who is also an entrepreneur, philanthropist, and designer, made the investment through Russell Westbrook Enterprises.
As part of the deal, he will join as an investor and adviser at Varo, where he will help co-create an impact platform for underserved communities, including communities of colour and African American communities.
Varo intends to use the fresh capital for supporting its social impact mission and developing additional credit, savings, and transaction banking features.
Varo Bank founder and CEO Colin Walsh said: “We both share a view that banking can be – and needs to be – a force for good.
“Russell is a visionary and his energy and passion for design, product excellence, and community impact will help propel Varo’s next phase of growth.”
In July last year, Varo received a national bank charter from the Office of the Comptroller of the Currency (OCC) and regulatory nod from the FDIC and Federal Reserve to open Varo Bank N.A.
The San Francisco-based neobank looks to address financial inequality, with no monthly fees or minimum balance requirements.
The neobank’s other backers include Warburg Pincus, The Rise Fund, Gallatin Point Capital, HarbourVest Partners, along with funds managed by BlackRock.
Varo offers auto-savings tools including Save Your Pay and Save Your Change, up to two days early access to direct deposits, as well as cash advances. Last October, it launched a new cash advance service called ‘Varo Advance’ that offers eligible customers with instant access to up to $100 cash advance directly on its app.
Westbrook’s investment in Varo adds up to its list of celebrity backers.
Just before the receipt of the bank charter, the challenger bank raised $241m in a Series D funding round. The Rise Fund, which co-led the fundraising, is co-founded by U2 lead singer Bono.
Westbrook noted: “The banking system has ignored or underserved a large portion of the American population – particularly communities of colour.
“I’m passionate about making lasting social change and creating a stronger and more inclusive system.”