Canadian fintech company Koho has crossed the $1 billion valuation mark after securing $130 million in new funding, a milestone that officially makes it one of Canada’s newest unicorn startups.
Koho has raised $130 million CAD in a Series E funding round, pushing the company’s valuation to $1.33 billion and officially earning it unicorn status. The funding comes as the company moves closer to obtaining a federal banking licence in Canada.
The all-equity funding round was completed in recent weeks and provides the capital Koho says it needs to support its banking ambitions and continue expanding its business. The company was previously valued at around $800 million, meaning the latest investment represents a significant jump in value.
Founded in 2014, Koho has spent more than a decade building financial products aimed at Canadians looking for alternatives to traditional banks. Today, the company offers services that include spending accounts, savings tools, borrowing products, credit-building services, money transfers, insurance offerings, and cryptocurrency features.
For CEO and co-founder Daniel Eberhard, the valuation milestone is important, but he says it is not the company’s main focus. “It’s nice validation,” Eberhard told BetaKit. “Both the quality of the investors who are coming in and valuation itself [are] a testament to what we’ve done. But there’s much more work in front of us than behind us.”
The funding round attracted several new investors, including Abu Dhabi sovereign wealth fund Mubadala, Savano Capital, Shopify co-founder and CEO Tobi Lütke, and Affirm Chief Operating Officer Michael Linford. Existing investors also participated in the round.
Koho said the latest funding brings its total capital raised to more than $507 million since the company was founded. One of the biggest reasons investors are backing the company is its push to become a federally regulated bank. For the past five years, Koho has been working through the process of obtaining a Schedule 1 banking licence in Canada. If approved, the licence would allow the company to operate more like a traditional bank instead of relying on partnerships with existing financial institutions.
Eberhard described the licensing process as one of the final major steps in the company’s plans. “It’s been a long journey,” he said. “We’re excited because it’s the last big piece of the puzzle for us.” Canada’s banking industry has long been dominated by a handful of major financial institutions. Many fintech companies have tried to challenge that dominance by offering easier-to-use digital services, but most still depend on traditional banks behind the scenes.
Koho believes obtaining a banking licence would allow it to offer more products directly to customers while lowering some of its operating costs. The company has previously argued that access to banking infrastructure would help it create better deposit and lending products. The business has also been growing rapidly.
According to Eberhard, Koho now generates about $250 million in annual revenue and is growing by roughly 50 percent year over year. The company employs about 250 people across its operations. Customer growth has been equally strong.
Koho says it has now surpassed 2.5 million users, up from one million customers in late 2023. The company added that the average customer uses three different Koho products. Longtime investor Adam Felesky, co-founder and CEO of Portage, said the latest funding round reflects the company’s growing role in Canadians’ daily financial lives.
“This round reflects that Koho continues to build a product that millions of Canadians use to manage their daily financial lives,” Felesky said. He added that becoming a chartered bank could unlock even more services for customers. Eberhard believes there is still a large gap in Canada’s financial system that companies like Koho can help fill. “There are still millions of Canadians who lack the banking options that they deserve,” he said. The CEO also spoke about the broader impact financial services can have on people’s lives.
“Enormous amounts of Canadians’ wealth are eroded by suboptimal financial setups,” Eberhard said. “It’s very difficult to have agency if you don’t have financial stability.” Looking ahead, Eberhard sees the company’s ambitions extending far beyond its current size. He told BetaKit that building a company capable of addressing those challenges takes time and patience. “I think we have the chance to become Canada’s next great bank,” he said.
That confidence is shared by some of the company’s earliest backers. Early investor Joe Canavan described Koho as “a generational winner,” reflecting the belief among supporters that the company could become a major force in Canada’s financial sector in the years ahead.
For now, Koho’s latest funding round marks a major milestone. The company has joined the exclusive group of Canadian startups valued at more than $1 billion, while continuing its effort to secure a banking licence and compete more directly with the country’s largest financial institutions.
