Canadian fintech start-up Neo Financial has raked in a C$25m Series A funding round and another C$25m in debt financing.

The Series A funding round was led by New York-based venture capital firm Valar Ventures.

Other investors include Shopify CEO and founder Tobi Lutke, Golden Ventures, Inovia Capital, Thomvest, Afore Capital, Maple VC, FJ Labs, and District Ventures.

This brings the total amount raised by the company so far to C$50m.

The C$25m debt facility financing came from its financial partner ATB Financial.

The challenger bank offers a savings account that offers 30 times more interest earnings than the Big Five Canadian banks. It also offers a Neo Mastercard and a rewards programme.

Neo co-founder and CEO Andrew Chau said: “With the tremendous support of our investors, particularly through the challenging circumstances of Covid-19, we are accelerating the development of Neo’s product offerings and expansion across Canada.

“Now more than ever we are seeing the need for digital transformation in industries like banking, and Neo is at the forefront of that in Canada. Our team has set out to not only build new technology that challenges Canada’s existing financial sector, but also drives a cultural shift in how Canadians bank.”

Valar Ventures founding partner Andrew McCormack said: “We are excited to partner with the team building Neo Financial.

“They are building a powerful technology platform which provides the modern banking services consumers around the world have come to expect – and are still not getting from the traditional banks in Canada.

“Neo’s unique approach will have a significant impact for consumers all over Canada who are ready for a financial platform that works for them.”