Canadian fintech firm KOHO has secured C$130m ($92.9m) in fresh funding as it moves forward with efforts to obtain a federal banking licence in Canada.
The funding round valued KOHO at C$1.33bn.
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New backers in the round include Mubadala, the Abu Dhabi sovereign investor with more than $385bn in assets under management, and Savano Capital, a Baltimore investment firm focused on expansion-stage companies.
The financing also drew participation from Tobi Lütke, founder and chief executive of Shopify, and Michael Linford, chief operating officer of Affirm.
Previous investors Portage Ventures, Drive Capital, BDC Capital, HOOPP and Eldridge joined the round as well.
The company said the funding forms the starting capital base required for a federally regulated bank.
KOHO has been progressing through the regulatory route for a banking licence and that the latest raise gives it the capital position to take a further step in that process, pending ministerial approval.
The proceeds will also be used to support expansion of KOHO’s main products, including spending and savings accounts, credit-building services, overdraft protection and its recently introduced crypto product.
Established in 2014, KOHO says it now serves more than 2.5 million people in Canada and has raised C$507m overall.
It said a federal banking licence would allow it to broaden its offering with lower costs, more flexibility in products and stronger consumer safeguards.
KOHO CEO and founder Daniel Eberhard said: “This raise reflects the conviction — from our team, our users, and now some of the world’s most credible investors — that Canada’s financial system needs to work better for more people.
“We’ve spent years earning the trust of Canadians who deserve better from their financial institutions, and this investor group reflects a shared belief that we’re just getting started. We’ve focused on building the infrastructure, the regulatory relationships, and the trust with Canadians to do this right. The investor group we’ve assembled reflects a shared knowledge that the next great Canadian bank needs to be built differently, and that KOHO is the team to build it.”
