Neo Financial Becomes Calgary’s Latest Billion-Dollar Tech ‘Unicorn’

Calgary’s tech community can brag about having another “unicorn” with fintech firm Neo Financial closing a funding round that values ​​the startup at over $1 billion.

Calgary’s tech community can brag about having another “unicorn” with fintech firm Neo Financial closing a funding round that values ​​the startup at over $1 billion.

Neo Financial – which was founded in 2019 by Andrew Chau and Jeff Adamson, co-founders of food delivery app Skip the Dishes, along with Kris Read – announced on Thursday that it had raised $185 million in a fundraising round of Series C funds featuring New York-based Valar Ventures as Neo’s lead investor.

Paul Lee – a San Francisco-based Tribe Capital partner who participated in the funding round – confirmed in an interview that Neo Financial’s latest fundraising is based on a current valuation of over $1 billion. of dollars.

That makes the Calgary-based company one of the few Alberta-based tech startups that can claim coveted “unicorn” status. (The term is used to highlight the rarity of achieving this level of valuation in the world of tech startups).

“We spend a lot of time working with a special subset of companies that hit benchmarks right off the rails, and Neo fits that picture,” Lee said. “The numbers speak for themselves, with Neo.”

The Series C round brings the total amount of venture capital funding raised by Neo Financial over the past three years to nearly $300 million. Besides Valar Ventures and Tribe Capital, other Series C participants are Altos Ventures, Blank Ventures, Gaingels, Maple VC and Knollwood Advisory.

Neo Financial’s goal is to create new technologies and user-friendly banking products. The company says one million customers are already using its product line, which includes the Neo Credit Card, a cash back credit card issued by ATB Financial and backed by the MasterCard network, and the savings account. Neo high interest rate provided by Concentra. Bank.

The company also offers “Neo Invest” – which it says is Canada’s first fully digital, actively managed investment vehicle – and plans to offer a new mortgage product before the end of the year.

“The pace at which this team is launching new products and growing its customer base is among the fastest we’ve seen in our careers,” Andrew McCormack, a founding partner at Valar Ventures, said in a statement.

Chau said in an interview that the banking sector has so far lagged behind other sectors in developing user-friendly and easy-to-use technological innovations for its customers.

He said the choice to base the company in Calgary, away from traditional bank headquarters like Toronto and New York, was a conscious choice.

“For us, we’ve always tried to go against the grain, to really reinvent financial institutions,” Chau said. “And the best way to do that is to avoid that groupthink and get a fresh perspective.”

Neo Financial’s number of employees has grown to 650 people, and the company is actively recruiting for more than 100 positions in Calgary and Winnipeg.

The company occupies approximately 10,000 square meters of office space in downtown Calgary, including 5,600 in converted retail space on the fourth floor of the historic Hudson’s Bay Building.

Alberta has seen a boom in the growth of its tech sector in recent years as the province strives to diversify its oil and gas-based economy.

According to the Canadian Venture Capital and Private Equity Association, the province broke its own all-time record for venture capital investment in 2021, with a total deal value of $561 million and a 64% increase in total number of transactions.

In Calgary, other tech “unicorns” valued at over $1 billion since 2019 include Solium Capital (now Shareworks), RS Energy Group (Enverus Intelligence Research Inc.), Parvus Therapeutics and Benevity.

This report from The Canadian Press was first published on May 5, 2022.

Amanda Stephenson, The Canadian Press

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