Koho, a challenger bank that lets Canadian users access up to 50% of their paycheck every day, raises a CAD$210M Series D in equity and debt led by Eldridge
Context & Ripple Effects
Koho's Series D is the middle beat of a long funding arc: after its $42M Series B led by Portag3 Ventures in 2019 put it at a $100M+ valuation, this Eldridge-led CAD$210M in equity and debt funds the paycheck-advance product — letting users draw up to 50% of their pay daily — at a scale that requires real balance-sheet capacity, not just software.
The round also sets up the endgame the corpus later confirms: Koho's CA$130M Series E at a CA$1.33B valuation, reached as the company nears a Canadian banking license and passes 2.5 million users. In a market where Neo Financial raised a CA$360M Series D backed by Tobi Lütke and Stewart Butterfield, Koho's raise is a defensive and offensive move in a two-horse Canadian neobank race.
First-order effects
- Koho gets the capital to keep funding daily paycheck advances at 2.5 million users — a product where every advance drawn is working capital off Koho's own book, which is why this round mixes debt with equity.
Second-order effects
- Neo Financial, the better-capitalized Canadian rival, faces a competitor with fresh Eldridge backing and a differentiated daily-access product, pushing the rivalry from signup bonuses toward credit and cash-flow features.
Third-order effects
- Koho's path toward a Canadian banking license points to challenger banks graduating from partner-bank models to charters, with earned-wage access shifting from fintech perk to a standard feature of chartered retail banking.
The trend: Canadian neobanks are raising ever-larger mixed equity-and-debt rounds to fund cash-flow products in-house while racing toward banking charters.