Koho Financial, a Canadian FinTech challenger bank, has closed a $130 million CAD Series E funding round, bringing its valuation to $1.33 billion and cementing its position as one of Canada's newest unicorns. The raise will support its ongoing growth and efforts to obtain a Schedule 1 federal banking licence.
- Koho raised $130M CAD in Series E, surpassing $1.3B valuation
- Now serving 2.5 million Canadians with diverse financial products
- In final stages of obtaining Canadian Schedule 1 banking licence
What happened
Koho Financial completed a $130 million CAD Series E equity funding round, lifting its post-money valuation to $1.33 billion and officially granting it unicorn status. The round attracted new investors including Mubadala, Savano Capital, Shopify CEO Tobi Lütke, and Affirm COO Michael Linford, alongside previous backers like Portage and BDC Capital. This financing brings Koho's total funding raised to $507 million CAD.
The Vancouver-founded FinTech company, currently operating in Toronto with about 250 employees, offers a broad suite of financial services such as prepaid cards, credit lines, international transfers, budgeting tools, and tenant insurance. Koho reported surpassing 2.5 million users, a rapid increase from 1 million in late 2023, and generates approximately $250 million in annual revenue with 50% year-over-year growth.
Why it matters
Koho’s pursuit of a Schedule 1 federal banking licence in Canada represents a significant shift toward competing with the traditional six major Canadian banks. Obtaining this licence would allow Koho to innovate at the infrastructure level, offer better deposit and lending products, and lower its cost of capital, positioning it as a true challenger bank in a concentrated market.
CEO Daniel Eberhard calls this funding milestone both a recognition of progress and a reminder of the significant work remaining to realize Koho’s vision of building Canada’s ‘next great bank.’ The company’s broadening service offerings and growing customer base highlight the demand for alternative banking solutions, particularly from younger and digitally native Canadians.
What to watch next
Koho is currently in the final stages of obtaining its federal banking licence, a process it has pursued for five years. Success here will mark a transformational moment enabling the company to develop deposit and credit infrastructure previously inaccessible as a non-bank, likely accelerating product innovation and expanding customer options.
Investors and market watchers will also be interested in how Koho leverages this capital to grow its product ecosystem, including plans for a telco offering, and how it navigates regulatory requirements with its new chief compliance officer, David Merriby, who joined in March to lead these efforts. Monitoring Koho’s path to becoming a fully chartered bank will be key for the future of Canadian FinTech competition.