Neo Financial raises $360 million backed by Canadian tech giants

Fintech company Neo Financial has raised $360 million in a Series D fundraising round backed by big Canadian tech names, the company said on Tuesday.

The funding consists of $110 million of equity and $250 million of debt, with investments from renowned Canadian entrepreneurs, including Shopify Inc. founder and chief executive Tobi Lütke, Slack Technologies Inc. founder and former CEO Stewart Butterfield, Roblox Corp. CEO David Baszucki and PointClickCare co-founder and executive chair Mike Wessinger.

“Neo Financial’s growth over the last four years reflects Canadians’ strong demand for alternatives to traditional banking,” Neo founder and chief executive Andrew Chau said in a release.

The company has secured one of the largest fintech funding rounds globally this year, despite being in one of the lowest periods of venture funding the industry has seen, Chau said.

The investors alluded to supporting the sector’s growth within Canada.

Lütke, of Canadian tech darling Shopify, said in the release that Neo’s growth is “proof that it’s possible to build world-class products here in Canada.”

“Investing in Neo Financial was about supporting a team that deeply understands Canadians and is relentless in improving their financial experience,” Slack founder Butterfield said in the release.

PointClickCare’s Wessinger said supporting Neo’s growth is “about showing the world what Canada can do in fintech — not just following trends, but setting them.”

“Neo Financial has the drive and the vision to push Canadian innovation forward,” he said in the release.

The funding round also included existing investors such as Valar Ventures, Golden Ventures, Afore Capital and Thomvest Ventures.

Neo, which started with a single product offering two years ago, now offers eight products, including mortgages and its no annual fee credit cards — product offerings that are similar to those of Canada’s legacy banks.

The company, with offices in Calgary, Winnipeg and Toronto, was founded in 2019 by the co-founders of SkipTheDishes and has since raised more than $650 million in funding.

• Email: dpaglinawan@postmedia.com

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