Become a leader in the emerging fintech space through NYU Stern’s Master of Science in Fintech program. This one-year part-time program is designed with full-time working professionals in mind. To learn more about the program, submit your resume for a candidacy review at stern.nyu.edu slash msft dash breakingbanks.

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting-edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Welcome back to Breaking Banks. I am your host, Brett King. And of course, Breaking Banks is the number one global fintech podcast.

I am coming to you from Dubai today, but it’s great to have back on the show a guest that we’ve had on previously. It’s been a couple of years now. Certainly post-pandemic, but Varo Money is a unique player in the ecosystem in that they’re really the only pure-play digital bank that went the de novo route.

Of course, they raised their first round way back in 2016. They achieved their license in August of 2020. Joining us in the studio virtually today is the founder and CEO of Varo Money, Colin Walsh.

Welcome back to Breaking Banks. Hey, Brett. It’s great to be back.

And yeah, it’s been an eventful few years since you and I spoke. So I look forward to sharing more on the journey. Yeah.

So first of all, give us a bit of an update about what’s been happening the last year or so. There’s a lot of really amazing activity. We hear a lot about profitability of challenger banks around the world now.

NewBank has hit 100 million customers recently. So tell us about how things have been going at Varo. Sure.

So well, since we last spoke, which I think was at the back end of 2021, so sort of a very different reality for our industry at that point. And it’s been, as you say, a very, very interesting period of time. So I’d say first, we kind of had to navigate through the pandemic.

And then we saw some real hyper competition that was kicking in on the back of a lot of funding. There was a lot of activity in the market. And then that came to a screeching halt in early 2022 when the funding markets dried up, interest rates started to go up.

You saw some very high profile bank failures with SVB and First Republic and Signature Bank. And then inflation started to spike. And so it’s been a lot for the industry to navigate through.

And I think from our perspective, we took some prudent decisions in early 2022 to sort of scale back sort of the grow at all costs model and focus on how do we improve our unit economics, but how do we sustain investment in our technology platform, building a product that was going to be hyper relevant to our customers, and also leveraging the fact that we were the first and remarkably still the only fintech operating in the US with a de novo bank charter. And so how do we scale up our lending activities, thinking about how we monetize our deposits and taking advantage of some of those kind of inherent capabilities from a business model perspective. And so I’m really proud to say, here we are now a few years later.

We’ve had great, great growth metrics. We’ve been seeing sort of a 30% CAGR on the revenue side. We’ve brought our losses way down, as you mentioned, focusing on profitability and getting there soon.

Also looking at just the overall unit economics and diversifying the revenue streams. While building a product that is really relevant to the consumer, particularly as we look at this environment that the consumer that we serve, which is pretty much paycheck to paycheck, people who are trying to get by, they’re making a lot of difficult choices in their lives, everything from what do they put in their grocery basket to do they get their children new clothes for school? What are they going to do over the holidays? Are they able to take a vacation? A lot of these things that, quite frankly, manifested themselves in this election cycle in the US, where people were just saying they’re crying out for change and they’re using the only sense of power they have, which is their vote. We’ll see how that all plays out.

But I say that it was really evidence that consumers have been under acute financial strain. And so we’ve been working very hard to deliver the solutions that can be part of helping that very serious problem for many, many everyday Americans. And so we could talk a lot more about some of the specifics there.

I mean, you mentioned at the top of the show that you’re the only bank that went that de novo route. And I know, I remember even way back in 2012 and 2013, when Josh, who was the founder of Simple, of course, Bank Simple became Simple, we used to regularly catch up on the phone and talk about when there was likely to be a digital license or regulation emerged specifically for licensing a fintech bank or a fintech charter in the US. And I think a lot of people were holding out for that, especially given the OCC tried to introduce it way back in 2014, and it sort of hasn’t happened.

So strategically, your decision looks pretty smart right now to have gone the de novo route comparatively, right? Well, in hindsight, for sure. And at the time that we were considering the chartering options available to us, the OCC was at a very nascent level, but was promoting this fintech charter, which never got off the ground. There just wasn’t the political will to make that happen.

And so we were assessing different options and decided to go with the full OCC National Bank Charter, which, as you say, in hindsight, was a great move for us. Because if you look at what’s happening, particularly over the last couple of years, as regulators have been cracking down on whether it’s third party risk management or BSA, AML, or other aspects of this operating model, many of these sponsor banks have had their wings clipped and have been operating under some very intense regulatory scrutiny, which has a knock-on effect to the programs that they’re supporting. And so our ability to manage our own regulatory destiny, which was one of the core theses, is that we want to be able to have the whole end-to-end from the regulated bank through the technology platform to be able to serve this massive tam of consumers in the US that needed a better bank.

And you and I, I think, have a lot of simpatico thinking around that, just given all the books you’ve written and the work you’ve done in this space. And so this was really the kind of thesis from the beginning. And there were also other foundational benefits around thinking about unit economics and not having to share interchange, not having to have a bin sponsor, being able to fund your lending activity off of low-cost deposits and not having to go source expensive capital market deposits.

And then really at the core of it is also the amount of innovation you can bring across the whole range of things that matter to customers, whether it’s around low-cost free banking solutions, whether it’s around moving money faster, building credit, accessing credit, building savings habits. And so all of that was kind of why we did it. And here we are now, several years later, and we’ve been operating as a chartered bank for four years now.

I would say it was absolutely the right decision. But it has been hard for others who’ve attempted to go through that process for a variety of reasons. And we’ll see whether that changes over these next few years.

But the barriers to entry have been quite high. I mean, even just your capital adequacy requirements in the US, comparatives to, say, a fintech charter in the UK, Revolut just got their license in the UK, finally, as an example. It’s a lot more work for a US de novo license.

Of course, we also see a lot of consolidation in the market. You talked about SBB and others. So there’s always an opportunity to pick up a bank in that consolidation mode.

But that doesn’t necessarily mean less work, does it? That’s right. And also, if you’re picking up a small kind of community bank, you’re not getting the tech. You’re not getting the advantage of having a really agile, tech-driven platform.

And in the fintech side, you’ve seen a massive amount of consolidation across the space. When you think of the number of players that were operating three or four years ago versus how many players are here today, it’s a much narrower playing field. Including moving on the consumer banking side.

Well, we took on board some of your customers. Yeah, no, we were grateful to have your support as part of that process for our customers. So it was great to have you step up and be a good partner for us in that respect, too.

But the tech stack, I don’t think that can be understated, the importance of that clean tech stack. I’ve been writing a lot about agentic and generative finance applications of late, of course. And this is a key element of capabilities here if you’re going to make this move into this next generation of banking that’s emerging right now.

The tech stack is so critical, which ultimately means there’s very few banks in the U.S. that have the technical agility to make those moves right now, right? This is one of the things that I’m actually most proud of. The team has done amazing work on a number of fronts. But the investments and the focus around building better technology to allow us to innovate at pace and be able to introduce products that really matter to our customers.

First, it starts with just the proprietary data ownership, allowing us to make better decisions, being able to embed AI and ML into pretty much every aspect of the customer lifecycle right now, from account decisioning, to fraud detection, to dispute adjudication, to credit underwriting, to customer servicing, and using that technology to have a real competitive advantage with our customers. We’ve also been able to build our own proprietary lending platform. We now have three lending products.

We’ve got our secured credit card. We’ve got our borrow advance up to $500, which helps customers bridge cash flow if they have a shortfall to their next paycheck. Now we have the borrow line of credit, which is offering up to $2,000, which is really intended more for unexpected emergency expenses.

But all of that’s been built on our own proprietary lending tech stack. We’ve also now migrated and we’re in the process of rolling out a new app soon where we’re using React Native to collapse the Android, iOS web development. Every time we wanted to introduce something, we’d have to develop it on three separate platforms.

Now this is a much more agile approach. Many of the leading tech companies are using these technologies to be able to move much faster into market. We also announced earlier this year that we’re going to be going onto the MasterCard platform.

That’s going to be exciting as well to partner with MasterCard. They’ve done some really innovative things globally and looking forward to partnering with them. So those investments in technology and to your point, being able to have an agile platform that allows us to respond quickly to changing customer needs, changing market dynamics is a real competitive advantage.

If you look at some of the other big players out there, whether it be NewBank, whether it be Monzo or others that have spent a lot of investing in their technology to be able to have that nimbleness. Yeah, this is the thing. This is why I love talking with founders of challenges.

First of all, you haven’t mentioned your core system once. You talk about your tech stack. You’re obviously fluent in the tech that you’re using and this is the culture you really need to be a technically agile bank these days.

This is where we separate the men from the boys in the next generation of banking stuff in terms of that technical agility. The next question I was going to ask, of course, is where are you using AI? But you just listed all those elements out. I’d also say the women from the girls.

So there’s a lot of very smart women that are having a hard time. So I want to make sure we keep an inclusive environment. One thing I would also add, though, from a cultural perspective, what do these tech investments afford us? We have, as we talked about, faster product iteration.

We’re able to go into an environment of continuous deployment. We can do much more rapid experimentation. We’re running hundreds of experiments all the time to really figure out what is working best for our customers, for our marketing funnels, so on and so forth.

Our teams feel more empowered and that they feel like they actually can drive better customer outcomes because they’ve got the tooling, they’ve got the technologies that they need to make better decisions. Also, it results in enhanced security and risk management, which right now we should probably spend a little bit of time talking about fraud because it’s a global problem right now with banks and financial institutions, just given the sophistication of some of the fraudsters out there. So having a more modern tech stack allows you to fight that in a much more sophisticated way.

And then the operational efficiencies. So your ability to actually deliver at a very low cost is largely determined by how automated you are and how sophisticated your processes are. I don’t think even many bankers are really across the fact that these are credit risk, which you’ve talked about lending and we’ll get into credit risk, but general fraud management.

I don’t think many traditional bankers are aware of how big the gap is opening up between technology players and traditional players in terms of managing this stuff. We see consistently now, you’ll remember 10 years ago when we’re both in the trenches trying to build our banks and you would hear consistently from the traditional segment of the market, these guys are never going to be profitable. They’re only growing with big growth numbers right now because they’re so small and they’re never going to be able to manage risk as well as we can.

And we know that those three elements are demonstrably false now. We know that challenger banks is a class, at least the ones that get to a certain critical mass are performing better on all of those things. The operational cash efficiency is clear.

Credit risk management tends to be better because it’s a data modeling problem. Profitability is emerging across the segment right now. But let’s talk about some specifics on that in terms of the lending stuff.

Are you guys seeing benefits scale now on the fraud and lending side because of the data models and because of the tech stack? A hundred percent. I mean, so let’s talk about lending, then we can talk about fraud, but it’s two important areas that we focus on. So on the lending side, we have taken a very prudent approach, not sort of the Marcus, like let’s put $3 billion of loans onto the books the first year without really knowing what we’re doing.

And that didn’t go so well. But we have been very much around understanding our customer and our customer, again, as I mentioned, is a paycheck to paycheck consumer, probably more in the non-prime space. And so being able to provide them with solutions that are meaningful to their lives, but where we’re actually able to make the economics work and being able to lend into that segment is a huge competitive advantage for us.

So most of our lending is cashflow based. It’s based on really understanding the dynamics and the relationship that we’ve established with the customer. We’re using machine learning models to assess how much we can lend to customers and how to make sure that we’re kind of very much at the top of that bill stack because customers are, you know, through making the right set of behaviors and building the relationship, they become eligible for more credit.

And that becomes a very valuable lifeline for the customer. So, you know, to me, having been in this business for so long, you know, understanding the fundamental dynamics of, you know, both capacity to repay and willingness to repay and being able to create solutions that customers rely on in a responsible way, because that’s the other piece of it. You know, we also want to encourage customers to build small dollar savings.

So if they have an unexpected expense, they can go to their savings first, but when they need lending products that they know they can rely on us to provide those solutions for them. And so it’s been a very thoughtful, considered approach, but we’re, you know, we’re scaling up our balance sheet. We’re leveraging the ability to have low-cost deposits to fund that balance sheet, and we’re leveraging the relationships that we’re building with our customers that are driving, you know, what I would say is probably some of the best ARPU and contribution margin that you see in the market right now for a challenger bank, just given the depth of the relationship that we’re building with these customers.

So I’d say that the tech and the data and the to use machine learning models in effective ways has been fundamental for us to be able to grow and introduce new lending products. And I feel like it’s still very early innings. I mean, I think about my previous employers, you know, Lloyd’s was around for 300 years, you know, Wells Fargo and Amex over 150 years, you know, we’re still just getting started.

And, but I feel there’s just that prudent approach in terms of how to go about making those lending decisions, particularly as we’ve talked about in a very stressed financial environment for many consumers. And so I feel getting that right, particularly as the larger banks are constricting their credit boxes. So, you know, with the CFPB about to regulate fees and, you know, many of the, and also kind of signs of a credit cycle, many of the, of the institute, larger institutions are restricting who they’ll lend to, which makes our proposition all the more appealing to consumers that are having a harder time accessing credit.

And also, and we just actually did a, we have a press release coming out. It’s research that we just did. That’s showing just how in so many ways, discriminatory, some of these backward looking lending systems are in the U S that are not taking into consideration people’s, you know, daily paychecks and, and, and their, their cash flow, just looking at mistakes that may have occurred in the past.

And it’s blocking people from being able to access more affordable credit and other solutions that could be available to them. So, so I feel like the whole lending spaces is ripe for further disruption and players like ourselves are, are in a, in a very good place. Don’t even get me started on credit scores, dude.

Oh yeah, yeah, exactly. We could have a whole conversation on that. I relocated to Thailand recently, which I guess, I guess you, you know, and you know, as part of the process of moving out of the States, I got my power cut off.

You know, I, I, and, and they said, well, we’ll send out the the variance bill, you know, if there’s any you know, at the end of that. And I, and they said, can you give us your forwarding address? And I said, well, it’s Thailand. And they said, well, we can’t send mail to Thailand.

So you’ll just have to check. And of course I woke up one day with, you know, my 840 credit score down to 650, because I hadn’t, yeah. Right.

You know, and it’s like, it’s so punitive the system, you know, and like, but this is one of the things is we, you know, we, we know now that credit scores are actually not a good predictor of default risk. Well, and we’re, and we’re proving that because, you know, our ability to lend to, to customers that many of the banks that are using these traditional systems would not even lend to, and being able to do it profitably. So, and I think that just is a big whitespace opportunity from my perspective.

Become a leader in the emerging fintech space through NYU Stern’s Master of Science in Fintech program. This is a one-year part-time program divided into one online and six on-site modules that take place in New York and in rotating global locations. The MSFT, Master of Science Fintech program is designed for experienced working professionals who want to strengthen their fintech skills or transition into fintech leadership positions.

The final application deadline for the MSFT class of 2026, beginning May in 2025, is March the 1st. GMAT and GRE scores are generally not required. To learn more about the program, submit your resume for a candidacy review at stern.nyu.edu slash msft-breakingbanks.

So what’s the data model advantages here? Are you looking at cash flow or, you know, what is it that’s giving you that ability to assess risk in a different way? Well, not only are we able to assess it, but we’re able to help consumers understand how we’re assessing it. So we’re also using machine learning tools in our app to help customers understand if you do X, Y, Z type things, like, you know, put certain amount of deposits in, you know, your payment behaviors, if you’re taking small dollar loans that you’re paying them back on time. And so we help customers understand, like, these are some of the factors that will help you get access to greater credit.

So if you go into our app today and you click on, you know, kind of your lending power, your borrowing power, it’ll actually help guide you through what is it going to take to be able to access more credit. And, you know, again, when we start to get into larger amounts, we will start to take in third-party data as well. But it is a pretty reliable set of tools to help guide our customers in the types of behaviors that ultimately lead to responsible borrowing.

And at the end of the day, you know, we are a regulated institution. We’re a mission-oriented institution that cares about improving the financial lives of our customers. So we want to make sure that the borrowing decisions that we make don’t get our customers caught into a cycle of debt and trying to help them actually kind of move out of that by also providing them with free banking services and better saving solutions and budgeting solutions so that they can manage their holistic financial life.

You know, I’ve never really been a fan of budgeting. I don’t think it works for most Americans, but I do think financial behavioral modification, you know, as you’re talking about, is very effective, far more effective than budgeting, just because budgeting takes discipline that most consumers don’t have. All you need to do is check, you know, people’s New Year’s resolution of getting fitter to see that the discipline’s a problem, right? Yeah, it’s like going to the gym, right? Everybody shows up in January and then never again.

But what we found is really helpful is not to create sort of a separate sort of PFM tool, but actually to embed it into the experience. So now if you look at our debit card or our Believe, which is a secure credit card, customers can track where their money is going by category and kind of comparisons to previous month. And it gives them just sort of an intuitive set of tools.

And they can also track money coming into their accounts as well and the sources in which that’s coming in and sort of a comparison of how is that, you know, against each month previously. So it gives them sort of that basic set of building blocks. And the other thing that we’ve invested in is taking what was essentially a dumb ledger, which, you know, most banks just simply have a list of transactions and turning that into much more of a smart ledger that includes some of these visualizations, but it also allows more transaction enrichment that is helpful for customers.

So, but it has to, in my mind, be embedded in the actual experience, the day-to-day. I mean, our customers are logging into their apps 94 times a month. I mean, you know, like you can’t even tell you how many times I’ve logged into my Wells Fargo app in the last year.

And it’s like, so there’s super high engagement, but it’s creating these things in the moments that matter for customers. And it’s in the sort of click stream of how they’re managing their money and thinking about their money. And for folks that don’t have a lot of money, let me tell you, they are all over it.

They understand where every dollar is and they’re trying to move money into different sort of account structures to allow them to pay their bills. This is where things like, you know, some of the pay by bank now is really interesting from a bill pay solution perspective, you know, how they use their spending, whether it’s, and having intention around, if I have a spending account that’s helping me build my credit, that’s really valuable. You know, if I can put some money, if I can park some money in savings, I’m going to earn a, you know, an attractive interest rate.

I mean, we’re still paying 5% on the 5,000 up to $5,000 for our customers. That’s a, that’s a lot of, that’s a high savings rate for people who typically don’t even have a savings account. And so, so we’re trying to kind of figure out how to manage the overall holistic experience.

We like to call it like the financial operating system for our customers, daily financial life, so that all these pieces are put together in a very intuitive way. But this goes back to, you know, the advantages of being a tech player is that we can do this with a very consumer-centric mindset and have the tools and the building blocks to be able to assemble something that is highly intuitive for our customer. And that, and that’s the obvious play for where generative AI comes, I think, is, is when you can talk to your embedded AI financial coach and understand, can I afford to go out for dinner with my friends on the weekend and things like that? That, that to me is the obvious application, particularly as people get more and more concerned about stretching their money and making it work in, you know, in an inflationary environment and so forth, which is, you know, is something we’ve all experienced since the pandemic.

And really becoming that trusted partner for your customers so that they, and to your point, you know, through different technologies, through generative AI, through, you know, we have a technology, which, you know, captures about 58% of all inbound contacts through having these interactions with customers. It’s more service oriented right now than sort of insights oriented, but we’re continuing to look at how do we embed more of that sort of set of solutions that help with the jobs to be done, with the problems to be solved in a real-time basis for our customers. That’s fantastic.

Let’s talk a little bit about some of the growth specifics. Obviously, you know, one of the differentiations that we see in the digital scaling capabilities of banks like Varo and other players in the space, NewBank and so forth, is this ability to scale digital acquisition and, you know, keep that cost of acquisition manageable. How have you guys gone as, you know, you’ve seen sort of the fortunes of this space over the last few years shift and weave? Yeah, I would say we’re probably a little bit different from some of the players out there that, you know, I’m not going to tell you that we’ve got 50 million accounts yet.

I wouldn’t mind being able to tell you that sometime soon. We’ve taken a pretty rigorous approach to really managing our overall acquisition economics and looking at the different channels in which we’re acquiring customers and how to do that as cost efficiently as possible and looking at sort both atop a funnel as well as deep funnel metrics and making sure that we’re bringing in customers that really stick and that are engaging with us the way we want them to engage. So, I would say, you know, I still feel pretty good about our growth.

I mean, we’ve more than doubled the size of the business since you and I last spoke. We’ve been running at about, you know, sort of a 27% CAGR from a growth perspective. So, I mean, it’s still, we’re still definitely, you know, growing this business and I do feel like Borrow is well placed now to, with the product solutions that we have and the technology that we have, to become a major force inside the U.S. banking industry and also with the focus on financial inclusion and bringing financial opportunity to this huge TAM of consumers.

But we think about, you know, again, using a diverse set of channels. So, our organic is, you know, probably about 50% of our acquisition is just coming from those organic customers finding us, you know, wanting our product, hearing about us through others. We’ve, you know, we test a number of different paid acquisition channels.

We have solutions like Borrow to Anyone, which is where anyone on the Borrow network can send money to anyone with a U.S. debit card and they can receive funds and then they learn about Borrow and they can apply for Borrow. So, it creates some network effects. We have a strong referral program.

We work with affiliates. So, we’ve got a very diverse set of channels that we work with, but I do feel that scaling in a responsible way, particularly because once you join Borrow, then you have access to a wide range of solutions and including credit solutions, and we want to make sure we’re attracting the right audiences. So, I would say we’ve taken quite a disciplined approach to this to make sure that, again, the unit economics look great, acquisition economics look great.

And I just feel like, as I mentioned earlier, we’re in such early innings from, you know, taking the business now to becoming one of the bigger forces in the U.S. banking industry. So, on the LTV side, obviously the lending and credit stuff has helped. How do you see that engagement you’re trying to foster manifesting itself in terms of lifetime value? Yeah.

So, we continue to see, we look at our ARPUs, we look at our contribution margins, we look at our duration for our customers. But, you know, I would say that like our, what we call our North Star customers, these are our primary banking customers. You know, we’re generating, you know, ARPU, you know, north of $600 for these customers.

And for a mainstream customer, I mean, like, that’s like, you just don’t really see that in other fintechs and really even in traditional banks. And again, that’s true. And you’re not having to pay $350 to get a checking account either.

No, no, not at all. Exactly, exactly. But this is also where, from our standpoint, it’s important to look at those kind of payback periods and those CAC to LTVs and make sure those acquisition economics are very strong.

And so, we spend a lot of time thinking about that. And again, it goes back to sort of the fundamentals of building a business like this. It does require discipline from a P&L and a financial management, discipline from a risk management perspective and understanding the risks that we’re taking on and that we can responsibly manage them, you know, in our business in a way that we continue to build credibility with our regulators.

And then it’s about, you know, creating the solutions that customers love and are very grounded in the kind of core pain points that the customers are trying to solve in their daily lives. So, you’ve spoken openly about your intent to IPO the business at some point in the future and so forth. Of course, you know, I think that’s a logical target for every challenger in the space.

And you must be getting close to profitability now. Yeah. So, I’d say that there’s a couple of things from that perspective, you know, on the IPO side.

You know, one, let’s see what the markets do. So, you know, we welcome the fact that Klarna has now listed, you know, I know Chime has spoken openly about wanting to do an IPO. So, you know, we’ll let a few others go first and see how they do.

But, you know, I’m hopeful that, you know, we’ll start to see that IPO market timing. Yeah, exactly. Reopen and that the stories that we have to tell are going to be very attractive to public market investors.

I also think from my perspective, we probably have a little more runway before we’re ready. The company itself is ready. So, you know, to your point, you know, we do want to cross that profitability milestone, which we see in the horizon.

So, we’re excited about that. So, you know, and I think once we’re operating as a profitable, sustainable institution that’s generating its own capital, that has a track record of, you know, repeatable, predictable growth with strong unit economics, strong acquisition economics facing into a very large TAM of customers, I think we’ll have a very compelling story. So, but, you know, I don’t see it as a 2025 event, but, you know, we’ll keep all of our options open.

And yeah, I think that, you know, our plan A is at some point to become a public market company. And I, you know, I’m excited to. No, no, I was just going to say, you know, that makes sense.

You know, I think, you know, there’s some metrics that are fairly obvious as a precursor to that. But, you know, we talked about consolidation in the larger banking space, which is only going to continue to speed up most likely. Could you see yourselves acquiring, you know, some businesses? We saw a new bank acquire Hyperleap recently for AI competency.

Is this something you consider? So we think about it and, you know, and we certainly haven’t had any shortage of things that have come our way. I’d say that we’ve, again, taken a pretty disciplined approach in terms of how we would filter those opportunities. So one criteria from my perspective needs to be that it’s got to be accretive from a, and a number of different ways.

One is it’s got to, you know, not, we don’t want to inherit someone else’s burn rate. So from a capital and from a revenue and a profitability perspective, it actually has to move us further along as opposed to pulling us back and consuming capital. So I’d say that that would be one thing.

The second is, you know, could it be a source of distribution? So either there’s customers that are similar to ours, with similar products that could be converted onto our platform, or are they offering products that are on our roadmap that we haven’t built yet, that might be an interesting adjunct that could add onto the product set that’s aligned with our roadmap, or do they offer some sort of a unique access to customers, whether it’s through embedded employer relationships or third party relationships that could open up new channels of distribution. So, so we look at kind of all of those dynamics. And so I think that, you know, at some point would we, you know, consider consolidating, you know, I wouldn’t certainly wouldn’t rule it out.

I’d say for us right now, we’ve got, you know, a very clear set of priorities that we’re executing against, and obviously, turning to profitability is going to be super important. So I doubt that we would probably do anything prior to that. But we keep a close eye on the market and the dynamics in the market.

And I think there will continue to be opportunities out there. Speaking of which, you know, we’ve just had a pretty dynamic change in administration in the United States. And, you know, I think we can see with the consent orders and the lack of a fintech charter that regulators have not been particularly friendly to fintech banks in the United States compared with, you know, the G20 and Eurozone markets that all pretty much have fintech charters.

But do you think, what do you think the change of posture, if any, might be from the Trump administration in respect to the role that fintechs in generally play in the market? Yeah, well, I definitely think you’re going to see more pro-business, pro-tech, you know, how that translates into, you know, actual changes in policies and regulatory structures and prioritization inside the regulatory agencies remains to be seen. But I do think you’re going to see more of a tailwind for things like, you know, bringing in new charters, driving more technical innovation. And so I do expect that you’ll start to see some changes certainly in the next year or two.

All right. So then, you know, what’s up next for Varo? The IPO is a little bit off, but what are you working on the next 12 months or so? We are just plugging away. As I mentioned, you know, we’re launching our new React Native app.

Sorry, I can’t speak this morning. And we’ve got the MasterCard migration. We’ve got a number of feature enhancements just to continue to create the best possible banking, savings, lending solutions for our customers.

So there’s a lot on the roadmap. And we’re excited to just continue to lean into this opportunity where, as I, you know, we started this conversation, that we’re at a cultural moment right now. You know, customers are feeling a lot of financial stress that we want to be part of the solution and bring something into their lives that helps them feel more control, helps them see their financial health improving.

And we think that this is a very unique time for players like us, as well as, you know, we’ve come so far from both a product and a technology perspective over these last few years that we’re just excited to lean in. Absolutely. Well, Colin, thanks for joining us on the show again.

For those that want to find out what’s happening with Varo, you know, as a business and follow you particularly, where can people go? Yeah, you could always visit us at varomoney.com, which is our website. And we also have, you know, learning centers and blogs and other things that are available from a content perspective. And you can also follow me on LinkedIn.

And yeah, appreciate the opportunity, Brett, to catch up and to chat about all these topics. There’s a lot happening in our industry right now. Well, all I’m going to ask you is when you are ready to announce that you’ve hit that profitability mark, make sure you come back on and tell us, OK? I sure will.

Because it’s something we can celebrate, OK? Absolutely. All right. Sounds great.

That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our U.S.-based production team, including producer Elizabeth Severance, audio engineer Kevin Hirsham, with social media support from Sylvie Johnson. If you like this episode, don’t forget to tweet it out or post it on your favorite social media.

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