Varo Bank, the first Fintech to receive a federal bank charter and become a regulated digital-only bank, continues to lose money as it pursues its mission of improving the financial health of its customers.
A document recently filed with the Office of the Comptroller of the Currency indicates that Varo currently holds $276 million in deposits, which includes 5.34 million accounts of $250,000 or less. There are 1,627 accounts above the $250K threshold.
In a brief statement, Varo said that it continued to make progress during Q4 in comparison to the prior quarter as it reduced net losses and boosted revenue.
Varo said that it is maintaining its product innovation while reducing its burn rate with lower expenses “from cost reduction measures while driving significant growth in customer contribution margin year over year.”
Varo stated that it “remains sufficiently capitalized” to meet its strategic objectives, diversify revenue, increase customer contribution margin, and “achieve profitable long-term growth.”
Varo said it continues to leverage its balance sheet while maintaining its deposit sweep program. Lending-related charge-offs remain low.
Varo Bank’s app-first approach incorporates modern banking features and services typically missing from old-school banks. Varo touts its low fees in comparison to incumbent banks.