Is $360 million Series D funding good news for Neo Financial?

🗳️ Question of the Week

Is $360 million Series D funding good news for Neo Financial?

Neo Financial, a Calgary-based fintech company, recently announced its Series D funding round consisting of $110M of equity and $250M of debt. Alongside existing investors, the round also saw participation from Canadian entrepreneurs such as Tobi Lütke (CEO and founder of Shopify), Stewart Butterfield (founder and former CEO of Slack), David Baszucki (investor and CEO of Roblox), and Mike Wessinger (co-founder and executive chair of PointClickCare).

“Neo Financial’s growth over the last four years reflects Canadians’ strong demand for alternatives to traditional banking,” said Andrew Chau, co-founder and CEO of Neo. “We’re building time and money-saving financial products that will help Canadians for decades to come. 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. This growth capital allows us to continue winning the hearts and minds of Canadians, serving them when they need it the most. Canada continues to lag in productivity and innovation, and our team is on a mission to reverse that trend and make Canada a better place to live.”

Since its founding in 2019, Neo Financial has gone from offering two products to eight and topping the Globe and Mail’s list of Canada’s fastest growing companies and Deloitte’s Technology Fast 50 ranking.

However, shortly after Neo Financial announced its raise, the Logic reported a “significant drop” in the company’s valuation. Using publicly available documents, the Logic found that a single, unidentified Chinese investor had bought 60 percent of the $112 million in Series D shares issued.

As of Nov. 11, Neo Financial had declined to answer related questions from the Logic.

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