Toronto-based Koho Financial has raised a $190 million CAD round of debt and equity funding as it continues its efforts to secure a Schedule 1 banking licence.
The $40 million equity financing was led by PROPELR Growth with participation from return investors Drive Capital, TTV Capital, and BDC Capital. New York-based Rockefeller Capital, founded by oil baron John D. Rockefeller, also participated in the round as a new investor.
“This injection allows us to grow faster and expand our lending business, both of which support our bank license application.”
Daniel Eberhard
Koho CEO
PROPELR Growth managing partner Sanjiv Samant will join Koho’s board of directors as a result of the round.
Koho also secured an additional $150 million in debt through a credit extension that was provided in partnership with new and existing partners, the company said in a statement.
The secured capital will be used to fund Koho’s growth, expand its lending book and product offerings, and support its effort to secure a Schedule 1 bank licence.
“We had the choice of profitability with our existing capital but this injection allows us to grow faster and expand our lending business, both of which support our bank license application,” Koho CEO Daniel Eberhard said in a statement.
Koho became transparent about its plans to become a bank earlier this year, shortly after it secured an $86 million Series D extension at the end of 2023. The FinTech firm had previously secured $210 million in February 2022.
While Koho already provides a variety of bank-like offerings, including credit building, spending, and high-interest savings products, it has to rely on third-party partnerships with regulated players like Peoples Trust to deliver its financial products.
RELATED: Koho set to launch line of credit offering through partnership with Propel Holdings
The FinTech firm has been rapidly rolling out features in recent months. In August, Koho launched a rent reporting and cashback feature, allowing users who pay rent through its platform to build credit history, as well as a tenant insurance offering through a partnership with Walnut Insurance.
Last month, Koho announced an upcoming line of credit offering through a partnership with fellow Toronto-based FinTech firm Propel Holdings. The partnership will see Koho introduce and manage the line of credit as one of the core lending products in its app while Propel powers the technology, underwriting, servicing, and funding of the loans, which will range between $1,000 and $15,000, through its lending platform Fora Credit.
Koho has more new offerings coming soon, including a buy now, pay later tool that’s currently in beta and a travel insurance offering.
Feature image courtesy Koho.