Varcoe: ‘Stepping-stone to something much larger’ — Neo Financial hits $1B ‘unicorn’ valuation

‘It really is a validation for the tech ecosystem here that we are building in Calgary,’ Neo chief executive Andrew Chau said

Author of the article: Chris Varcoe  •  Calgary Herald

Publishing date: May 05, 2022  •  2 days ago  •  4 minute read  

Can unicorns gallop? In the case of Neo Financial, it certainly appears so.

The Calgary-based tech startup will announce Thursday it has completed a new $185-million fundraising round, pushing the total amount of capital it’s attracted to more than $299 million since it was established.

The financial services firm also joins a small but growing collection of tech companies in Calgary that have attained the rare “unicorn” status with a valuation over $1 billion.

And it’s done so in less than three years.

Neo Financial is one of the fastest-growing Canadian startups to reach that gateway, joining Solium Capital (now Shareworks by Morgan Stanley), Benevity, RS Energy Group and Parvus Therapeutics as local companies with a unicorn valuation.

All have cleared that hurdle since 2019.

“It really is a validation for the tech ecosystem here that we are building in Calgary,” Neo chief executive Andrew Chau said in an interview.

“Ultimately, what we’re building here at Neo is not (designed) to build an overnight success, right? It’s really around building a generational company that can outlast all of us.

“It’s to build an iconic brand that all Canadians use, and this milestone of reaching over a billion-dollar valuation is really just a stepping-stone to something much larger.”

Neo Financial was founded in 2019 by Chau, Chris Simair and Jeff Adamson — the three were co-founders of Winnipeg-based SkipTheDishes, which sold for $200 million six years ago — along with Kris Read.

Neo’s growth out of Western Canada has been meteoric, with Chau holding early meetings in the downtown Calgary library as the company assembled its initial plans.

Its mission has been to disrupt the traditional financial marketplace and compete with banks and institutions using the power of technology.

It now has more than one million customers and offers a no-annual-fee rewards MasterCard, and a high-interest Neo savings account. It partnered last year with retail giant Hudson’s Bay Co. to provide a store-branded credit card.

Other partnerships include H&R Block, Boston Pizza and Home Depot, and it has 7,000 local and national retailers on its platform.

To fuel the growth, the company has been hiring at a rapid pace. It now has more than 650 people working between its offices in Calgary and Winnipeg. Neo also has more than 100 open positions.