KOHO raises CAD $130 million in banking licence push

KOHO has raised CAD $130 million at a valuation of CAD $1.33 billion to support growth and its pursuit of a federal banking licence in Canada.

New backers include Mubadala, Savano Capital, Shopify Founder and Chief Executive Officer Tobi Lütke, and Affirm Chief Operating Officer Michael Linford. Existing investors Portage Ventures, Drive Capital, BDC Capital, HOOPP, and Eldridge also participated.

The Vancouver-based financial technology company said the capital will serve as the initial base for a federally regulated bank as it continues through Canada's regulatory process. Any banking licence would remain subject to ministerial approval.

KOHO plans to use the new funding to expand its existing products, including spending and savings accounts, credit-building tools, overdraft protection, and a recently launched crypto offering.

The round marks another step in the company's effort to move beyond its current fintech model and secure federally regulated bank status. Such a licence would give it a different footing in the Canadian market and could broaden the range of financial products it offers directly to customers.

Founded in 2014, KOHO says it now serves more than 2.5 million Canadians. With the latest financing, it has raised a total of CAD $507 million to date.

Mubadala joins the shareholder base as a sovereign investor with more than USD $385 billion in assets under management, while Savano Capital adds another institutional name to the round. The participation of Lütke and Linford also brings in senior technology and fintech operators as individual investors.

The financing underlines continued investor appetite for consumer-focused financial technology businesses, even as the sector faces a tougher funding environment than in previous years. It also suggests there is still support for fintech groups seeking more regulated roles within established banking systems.

In Canada, that shift carries particular significance because a small group of large incumbents has long dominated the banking market. New entrants have often focused on digital services layered on top of existing infrastructure rather than pursuing full banking status.

Licence push

For KOHO, a successful move into federal regulation would mark a structural change in how it operates. The company said that becoming a federally regulated bank would allow it to lower costs, gain more flexibility in its products, and provide stronger consumer protections.

It has spent years building a user base around an app designed to help customers manage everyday finances, featuring spending controls, savings tools, and credit support. KOHO is also an official Payments Service Provider member of Payments Canada.

That background gives the company a position in the market as it tries to translate scale in digital financial services into a more formal banking structure. The new round indicates investors are willing to support that transition with fresh capital.

Daniel Eberhard, Founder and Chief Executive Officer of KOHO, commented on the raise and the company's direction.

"This raise reflects the conviction - from our team, our users, and now some of the world's most credible investors - that Canada's financial system needs to work better for more people," said Daniel Eberhard, Founder and Chief Executive Officer of KOHO.

"We've spent years earning the trust of Canadians who deserve better from their financial institutions, and this investor group reflects a shared belief that we're just getting started. We've focused on building the infrastructure, the regulatory relationships, and the trust with Canadians to do this right. The investor group we've assembled reflects a shared knowledge that the next great Canadian bank needs to be built differently, and that KOHO is the team to build it."