KOHO’s latest financing round may come with a headline-grabbing valuation, but for Founder and CEO Daniel Eberhard, the bigger milestone is what the capital makes possible.
The Canadian fintech company has raised $130 million at a $1.33 billion valuation as it moves closer to becoming a federally regulated bank. The round includes new backing from Mubadala, Savano Capital, Shopify founder and CEO Tobi Lütke, and Affirm COO Michael Linford, alongside returning investors Portage, Drive Capital, BDC, HOOPP, and Eldridge.
According to Eberhard, the financing provides the initial capital base required as KOHO advances through the process of securing a Schedule 1 banking licence. KOHO entered the second phase of the licensing process in early 2024 and expects approval as early as this year.
For KOHO, which now serves more than 2.5 million Canadians, becoming a bank is not simply about status. Eberhard says it would give the company greater control over costs, product design, speed, and consumer protections, allowing it to better serve customers who have often been underserved by traditional financial institutions, including newcomers, renters, gig workers, younger Canadians, and people with irregular income.
Fintech.ca spoke with Eberhard about why KOHO believes “the next great Canadian bank needs to be built differently,” what the new capital unlocks, and how the company plans to balance product expansion with the trust and accountability required of a federally regulated bank.
KOHO has raised $130 million at a $1.33 billion valuation, but the bigger story appears to be the role this capital plays in your banking license journey. How should Canadians understand the significance of this round beyond the headline valuation?
DE: What this round really represents is a concrete step towards us scaling our growth in our core product suite and a major step toward becoming a federally regulated Canadian bank. For many Canadians, including newcomers, gig workers, and younger people, access to affordable and transparent financial tools remains a challenge. This capital helps us build products that are easier to access and simpler to understand.
Becoming a federally regulated bank gives us greater control over costs, product design, and consumer protections, creating more opportunities to help Canadians. The valuation is a headline, but the bigger story is how this investment helps us expand access to better financial options for more Canadians.
This round provides the initial capital base required to meet the conditions of a federally regulated bank. What does that unlock for KOHO from here, and what are the next major milestones on the path to securing a Schedule 1 banking licence?
DE: We’ve been working toward this for years. The licensing process is rightfully rigorous, as we’re building an institution that Canadians will trust with their hard-earned money. One of the real conditions along the way is having the right capital base, and this round puts that in place. We entered the second phase in early 2024, and we expect approval as early as this year. But we’ve done the work with the infrastructure, the regulatory relationships and the trust with Canadians. This is the next real step.
You’ve said that “the next great Canadian bank needs to be built differently.” What does that mean in practical terms, and where do you think traditional financial institutions have fallen short for everyday Canadians?
DE: In practical terms, it means being built around the customer the existing system was never really designed for: gig workers, newcomers, renters, people with irregular income. The traditional banking model was built for someone with a stable salary, a long credit history, and a predictable financial life. A lot of Canadians don’t fit that profile, and they’ve felt that. We’ve spent over a decade building tools for people navigating real financial complexity. A banking licence gives us more control over cost, speed, and product design, and that translates directly into better outcomes for the Canadians we’ve always built for.
KOHO now serves more than 2.5 million Canadians. What are you seeing from that customer base that tells you there is room—or need—for a different kind of bank in Canada?
DE: So many Canadians have been getting by in a system that was never really built with them in mind: gig workers, renters, newcomers, people whose income doesn’t show up the same way every month. Traditional banks tend to treat them as the exception, when really they’re a huge part of the country.
And you see it in the everyday stuff: getting turned down for products, banking fees that land hardest on the people who can least afford them and credit scores that punish you for not having a conventional paycheque. The system has mostly worked for people who have a 9-5 and a stable income, but that isn’t the profile of the majority of Canadians anymore.
The round includes Mubadala, Savano Capital, Tobi Lütke, Michael Linford, and returning investors such as Portage, Drive, BDC, HOOPP, and Eldridge. What does this investor group bring to KOHO beyond capital?
DE: We were deliberate about this. We wanted people who understood what we’re building and why it’s genuinely hard. Mubadala brings a long-term institutional perspective and credibility at a global scale. Tobi has built one of the most consequential Canadian companies of the last generation and understands what it takes to do that from here. Michael scaled consumer fintech at Affirm in a way very few people have actually done. And our returning investors, Portage, Drive, BDC, HOOPP, Eldridge, have been with us through the work.
Becoming a federally regulated bank would allow KOHO to offer lower costs, greater product flexibility, and stronger consumer protections. Which customer pain points would you be most eager to address if KOHO secures its licence?
DE: Cost is the most direct and immediate one. Right now, parts of our product run through partnerships with regulated institutions, and that structure adds friction and cost that ultimately lands on the customer. As a bank, we control more of that directly. We can move faster, price more fairly, and build protections into the product that we simply can’t offer in the same way today. That’s what the licence makes possible.
KOHO has expanded from spending and savings accounts into credit-building tools, overdraft protection, and crypto. How do you think about product expansion while also preparing for the responsibilities, scrutiny, and trust required of a bank?
DE: Product expansion at KOHO has always been customer-led. Every addition to our suite, credit building, overdraft protection, and crypto, came from a real gap in people’s financial lives, not from a strategy deck. The scrutiny that comes with becoming a bank doesn’t change that approach. If anything, it reinforces it. Being a regulated institution requires more accountability and a higher bar for earning trust at every step. That’s always been how we’ve operated, but the license just cements that commitmen
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