Who REALLY owns Neo Financial?

I wanted to find out who REALLY owns Neo Financial. Because upon a quick search you might think that Neo Financial is a Canadian startup love story. The founders of Skip The Dishes decide to take on the big bank oligopoly in Canada.

Which as a personal finance influencer in Canada it’s a story I want to believe in. I hate the big banks, and our country is desperate for some transparency and low fee solutions. Now most people incorrectly think that founders Andrew Chau, Jeff Adamson, and Kris Read are the owners of Neo Financial.

But the reality… is much darker than that.

Who are Neo Financial founders?

No doubt, the founders of Neo Financial do own a portion of the business. The founders Andrew Chau, and Jeff Adamson were part of the founding group of Canadian startup Skip The Dishes, an online food delivery service that sold in 2016 to the British company Just East plc for $110 million.

However it is believed (not confirmed) that founders Andrew Chau and Jeff Admason own Neo Financial through Harvest Ventures which is their venture capital fund that invests in building the future of financial technology. Neo is listed in their porfolio.

Series A funding; equity and debt

At the end of 2020 Neo Financial raised $50 million, half was in debt, and half was in Series A equity. The equity investor group was led by Valar Ventures which is a New York based fund. There were also a variety of other investors that joined in the Series A such as Tobias Lutke the Canadian founder of Shopify.

The half that was debt was provided by ATB Financial – who also issues Neo Financial the mastercards for their users.

Crunchbase also shows that prominent American angel investors Steward Butterfield, and David Baszucki were early investors and can be assumed to have a decent ownership stake in the company.

Series B funding

In late 2021 Valar Ventures led their $64 million Series B funding. Equity based funding with multiple venture capital firms and investors.

Series C funding – $185 Million

In 2022 Neo FInancial reached the sought after “unicorn status” being valued at $1 Billion in May. They also announced they reached the 1 million customer milestone. Which is an incredible accomplishment in just 3 years.

However not everything is sunshine and rainbows. Jesse Snyder interviewed 13 current and former employees and reported on internal documents obtained by The Logic that Neo has had a difficult time taking market share from the big banks. Apparently the company has grappled with low user rates for its flagship credit card, which is the gateway to using Neo.

Series D funding – $360 Million

According to Business Wire in November of 2024 Neo had their Series D funding completed raising $360 Million. With participation from existing investors and venture capital companies like Valar Ventures, Golden Ventures, Afore Capital, and Thomvest Ventures.

The Financial Problem At Neo Financial

According to their website Neo Financial has over 750+ employees. Do some quick math and you realize that just the employee count alone would come with a whopping $40 Million / year price tag. That’s before accounting for any cost of goods sold, data centers, office space, marketing, debt servicing costs or any other costs.

In total Neo has been able to raise well over $299 Million in funding. Without taking into consideration their revenue this gives Neo a runway of only a few years, which could be coming to an end sooner rather than later.

For the first 3 years they had to raise money every year, and have managed to gather over 1 million users, that apparently they are struggling to get to use their products and most importantly their credit card. Given this information I would estimate their revenue may be around the $100MM – $200MM range… and I might be too high.

In my opinion this company has to resort to funding because they can’t survive without it. I believe Neo needs to turn around their revenue, probably cap staff, increase product usage & focus on effective marketing strategies. Or they might be in trouble if capital drys up.

Who owns Neo Financial?

Neo Financial is a privately held company. It is believe that the major owners are Valar Ventures, Harvest Ventures, and China’s Tencent. According to Crunchbase Neo Financial is owned by around 25 investors and venture capital companies.

Investigative reporters at the Globe and Mail recently uncovered that Neo’s funding was lead by China’s Tencent. Which is causing more geo-political concerns to how deep China’s influence extends into Canada. Especially given the recent government directed closure of China’s Tik Tok offices in Canada due to security concerns.

FAQ’s On Neo Financial