NBA star Russell Westbrook leads $63 million investment in nation’s first nationally chartered mobile bank

NBA star Russell Westbrook leads $63 million investment in nation’s first nationally chartered mobile bank

Westbrook’s namesake investment management group’s portfolio includes stakes in automobile, digital and tech startups, clothing lines, and sustainable and environmentally friendly products

By BCN Staff – Feb. 21, 2021 — NBA Star Russell Westbrook, who signed a five-year, $205 million contract extension with Oklahoma City in 2017 that was the largest contract in NBA history at the time, has joined the nation’s first all-digital, nationally chartered bank.

San Francisco-based Varo Bank on Feb. 18 announced that it inked a multimillion-dollar investment deal with Westbrook, the nine-time NBA All-Star and former NBA MVP who now plays for the Washington Wizards. According to Varo officials, Westbrook will join the virtual bank as an investor and advisor where he will have direct input into the future of Varo’s impact programs on inclusive of communities of color and African American communities.

“The Varo team is thrilled Russell is joining us on our trailblazing journey as the only all-digital, mission-driven national bank in the country,” said Colin Walsh, founder and CEO of Varo Bank.  “We both share a view that banking can be – and needs to be – a force for good. Russell is a visionary and his energy and passion for design, product excellence, and community impact will help propel Varo’s next phase of growth. Working together will accelerate our efforts to reimagine banking for all of us.”

Under the namesake Russell Westbrook Enterprises investment Inc. in Los Angeles, the NBA star led a recent investment round of $63 million in Varo Bank. This capital infusion will support Varo’s continued investment in its social impact mission and further development of the product roadmap including additional credit, savings, and transaction banking features, company officials said.

Russell Westbrook Enterprises (RWE), which was advised by independent Wall Street investment firm Jeffries Inc., joins a distinguished group of Varo’s existing major investors. They include Warburg Pincus, The Rise Fund, Gallatin Point Capital, HarbourVest Partners, and funds managed by BlackRock., one of the world’s largest investment management funds with assets of $8.7 trillion at the end of 2020.

According to Varo officials, the San Francisco-based mobile banking platform was created to make a measurable impact on financial inequality and address issues of access, fairness, and fees that have often had a discriminatory legacy. Varo said its fintech platform was designed from the outset to deliver premium, affordable banking services to all Americans. This founding ethos inspired Westbrook to engage directly with Varo, with the goal of advancing this cause in underserved communities and communities of color, company officials said.

“The banking system has ignored or underserved a large portion of the American population – particularly communities of color. I’m passionate about making lasting social change and creating a stronger and more inclusive system,” said Westbrook.  “I am excited and ready to work with Varo to be a part of an economic revitalization for those who never had the access they deserved.”

Beside Varo Bank, RWE’s investments portfolio ranges from ownership in a Westbrook-branded Chrysler-Dodge dealership in Van Nuys, Calif., and advanced data science to holdings in food and clothing related lines. The NBA all-star guard who started his career in Oklahoma City with fellow NBA stars Kevin Durant and James Harden is well-known for his philanthropic endeavors and stylish taste in clothes and designer fashions.

Varo said the collaboration with the NBA star will help the fintech platform reimagine banking by combining the latest technology, inclusive design, and a unique social impact focus. Westbrook’s engagement will build on Varo’s commitment to bring premium, innovative banking products to consumers, including up to two-day early payroll deposits and savings accounts with rates that pay several times the national average, company officials said.

Varo said it will also market a short-term cash advance line of credit that allows qualifying customers to access up to $100 as needed right in the Varo Bank app, although the company did not provide any details concerning the interest rate of that product. Varo Advance launched in December 2020 and remains fee-free through March 2021 due to the ongoing effects of the COVID-19 pandemic, officials said.

According to Varo’s application for federal depository insurance filed with the Federal Deposit Insurance Corp. (FDIC) in early 2020, the mobile banking platform was originally organized as Varo Bank NA, a proposed new national bank in Draper, Utah.  At the time of its FDIC application approval on Feb. 10, 2020, Varo said it had initial paid-in capital funds of “not less than $104.4 million.”

The Office of the Comptroller of the Currency, which is part of the U.S. Department of Treasury, first awarded Varo preliminary approval for national charter bank status in September 2018. On July 31, 2020, the federal banking regulators gave final approval for the national bank charter application of Varo, pending completion of organizational requirements and meeting the conditions of both the OCC and FDIC’s Federal Reserve membership.

“Receiving an official bank charter has been part of Varo’s vision from the very beginning, and we are excited to progress through the necessary steps to accomplishing that goal,” said Walsh. “Despite historic economic growth, only 29% of Americans are considered financially healthy. Varo is committed to creating inclusive financial opportunities that deliver measurable benefits to all consumers. Becoming a fully chartered bank will give us greater opportunity to deliver products and services that positively impact the lives of everyday people around the country.”

In a related matter a week before the Westbrook deal, Varo also announced that it had hired Jakub Jurek as its Chief Data Officer. Company officials said Jurek brings over 18 years of data expertise both in academia and as a fintech executive, including stints with Figure Technologies and Wealthfront. Under Jurek’s leadership, Varo said it will accelerate its data-product vision that leverages Varo’s modern banking platform to design personalized experiences, develop insight-driven products for Varo customers, and support Varo’s dynamic risk management capabilities.

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