There's some good news for Calgary's tech community as Neo Financial recently closed a funding round that helped the startup have a value of more than $1 billion. Founded in 2019 by Jeff Adamson and Andrew Chau, the tech company is headquartered in the Edison building at 150 Ninth Ave. S.W. in Calgary's downtown core.
On Thursday, the
company announced that it had raised $185 million thanks to a series
C funding that featured New York-based Valar Ventures as the lead investor.
Paul Lee, a
partner at San Francisco-based Tribe Capital, which participated in the Series
C funding, has confirmed that Neo Financial's latest fundraising is based on a
current valuation of over $1 billion. With that, Neo Financial has become one
of the few Alberta-based tech companies that can claim the Unicorn status. For
those unaware, this term emphasizes the rarity of reaching that level of
valuation in the world of tech startups.
Lee said, "We
spend a lot of time working with a special subset of companies that hit the
benchmarks right out of the rails, and Neo fits that picture. The numbers speak
for themselves, with Neo."
With this round
of funding, the total capital funding raised by the company in the last three
years is about $300 million. The company aims to build user-friendly banking
products and technology. The company says that about a million customers are
already using its product line.
Neo Financial
has many popular products like the Neo Credit Card and the high-interest savings
account Concentra Bank provides. It also offers "Neo Invest," — which
it says is Canada's first actively managed, fully digital investment vehicle.
It will be launching a new mortgage product before the end of the year.
In an interview,
Chau stated that the banking industry has so far lagged behind other industries
in developing easy-to-use and consumer-friendly technological innovations for
its customers. He said that choosing to start the company in Calgary, not
traditional banking headquarters like New York or Toronto, was a conscious
choice. He said, "For us, we've always been trying to go against the
grain, to reimagine financial institutions truly. And the best way to do that
is to avoid that groupthink and have a fresh new perspective."
The company has
a headcount of more than 650 people and is seeking to hire 100 more employees
in Calgary and Winnipeg locations. It occupies about 10,000 square meters of
office space in downtown Calgary. Out of that, 5,600 in converted retail space in
the historic Hudson's Bay building.
Alberta has
seen a boom in the tech sector's growth in the last few years. Some other tech
unicorns in Calgary that have been valued at over $1 billion since 2019 are Solium
Capital (now Shareworks), Parvus Therapeutics and Benevity, and RS Energy Group
(Enverus Intelligence Research Inc.).
The Canadian
Venture Capital and Private Equity Association stated that the province broke a
record for venture capital investment in 2021. In that year, the total deal
value was $561 million, and there was a 64% increase in the total deal count.
Sources:
https://www.cbc.ca/news/canada/calgary/neo-financial-unicorn-calgary-venture-capital-1.6442174
https://globalnews.ca/news/8811420/calgary-neo-financial-tech-unicorn/
https://www.coastreporter.net/the-mix/neo-financial-becomes-calgarys-latest-1-billion-tech-unicorn-5332958