Announcing Thomvest’s Investment in Neo Financial
We’re thrilled to announce our investment in Neo Financial’s $25 million Series A fundraising round, alongside participation from co-investors Valar Ventures, Shopify founder Tobi Lutke, Golden Ventures, Inovia Capital, Afore Capital, Maple VC, FJ Labs, and District Ventures. This investment represents both a continued commitment to fintech, as well as an expansion of our portfolio in Canada.
The legacy Canadian banking sector
The Canadian banking sector is an oligopoly and the largest 5 banks control ~90% of market share. The Big 5 have dominated Canadian personal finance for decades, but they are slow to innovate and are driven by legacy technology and siloed products.
Here at Thomvest, we believe there is a meaningful gap in the Canadian banking market today — innovation has been slow due to Canada’s legacy banking technology infrastructure and regulatory hurdles, but Canadians expect their banking providers to behave like technology companies. As a result, we believe there’s strong demand for a better banking experience that’s seamless, transparent, and more modern.
Meet Neo
We were introduced to Neo’s founding team, who previously worked together for several years at SkipTheDishes, and were impressed by their desire to build a powerful technology platform to challenge Canada’s existing financial sector. Neo has taken advantage of the market opportunity and has been growing rapidly from their headquarters in Calgary. The company is modernizing rewards-based credit cards in Canada and is re-imagining savings by using technology to simplify finances and create rewarding experiences.
Neo currently offers 2 products:
- Neo Card helps Canadians earn more with their credit card by creating a rewards marketplace that does not exist elsewhere in Canada; and
- Neo Savings reduces the complexity of banking by having a single hybrid savings and chequing account.
Neo Card is a no annual fee credit card, with embedded and automatic rewards from merchants. Customers are able to apply within the Neo app and get the card in minutes. The application process is one of the first in Canada to use digital identity validation technology, and once approved, users can load their card to their phone and start using it immediately.
By using their Neo Card, customers will earn personalized rewards from hundreds of merchant partners. When a cardholder shops at a Neo merchant partner’s store, their purchases are automatically applied towards the merchant’s loyalty program and sponsored offers.
How Neo Card Stacks Up
Neo Savings is a high-interest savings account that earns members up to 30 times more than the Big 5 banks. Neo Savings is a simpler way to manage money that’s also more rewarding. Neo Savings has no monthly fees, minimum balance, or transaction limits.
How Neo Savings Stacks Up
We couldn’t be happier to be investing in the digital transformation of banking and are excited to be working with the Neo Financial team as they continue to grow and build a leading Canadian financial institution.
