Neo Financial raises $360m to expand alternative banking products

Neo Financial, a Calgary-based challenger bank, has raised $360 million in a funding round to grow its services and compete with Canada’s traditional banking giants.

The round includes $110 million in equity and $250 million in debt and is backed by well-known tech leaders, including Shopify’s Tobi Lütke, Slack founder Stewart Butterfield, and Roblox CEO David Baszucki.

Neo, founded four years ago, has quickly become a significant alternative to traditional Canadian banks by providing a wide range of financial services tailored to modern banking needs.

Neo’s suite of financial services covers alternative mortgage options, credit cards, savings, and AI-driven money management. The recent funding will allow Neo to improve and expand these offerings. Neo’s portfolio also includes automated savings transfers, instant bill payment, Interac e-Transfers, and ATM access.

“Neo Financial’s growth over the last four years reflects Canadians’ strong demand for alternatives to traditional banking,” Neo co-founder and CEO Andrew Chau said in a press release. “Despite being in the lowest period of venture funding that fintech has seen in the last five years, we’ve been able to raise one of the largest fintech funding rounds globally this year.”

The company also announced the opening of a new office on Bay Street in Toronto, which adds to its existing locations in Calgary and Winnipeg. It said the expansion reflects Neo’s commitment to broadening its national presence and tapping into talent across the country.

"Investing in Neo Financial was about supporting a team that deeply understands Canadians and is relentless in improving their financial experience,” said Stewart Butterfield, founder and former CEO of Slack. “They’re building a solution that’s more human-centered than anything we’ve seen in fintech."

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"As an investor, I seek out opportunities where companies are pushing boundaries and challenging the status quo to unlock potential – Neo Financial is giving people new tools to unlock financial opportunities,” added David Baszucki, investor and CEO of Roblox.

"Neo Financial has the drive and the vision to push Canadian innovation forward,” PointClickCare executive chair Mike Wessinger said. “Supporting their growth is about showing the world what Canada can do in fintech – not just following trends, but setting them."

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