I just came back from a coffee meetup with three fintech founders in downtown Toronto, and all anyone could talk about was Neo Financial’s unstoppable momentum. It’s like watching a rocket ship that keeps finding extra fuel tanks after liftoff.
For the third consecutive year, Neo Financial has claimed the top spot on Deloitte’s Technology Fast 50 program, a feat unprecedented in the program’s 26-year history. The Calgary-based fintech reported a staggering 15,964% revenue growth from 2019 to 2022. Let that sink in – nearly 16,000% growth in just three years, during a period that included a global pandemic and significant economic turbulence.
“When we started Neo, we saw an opportunity to build a business that would change how Canadians bank,” said Andrew Chau, Neo’s co-founder and CEO. “This recognition validates our mission to create meaningful financial products that resonate with everyday Canadians.”
What makes this achievement particularly noteworthy is that Neo has maintained this hypergrowth trajectory while expanding its product suite well beyond its initial credit card offering. The company now provides a comprehensive financial ecosystem including high-interest savings accounts, investments, mortgages, and insurance – effectively positioning itself as a one-stop financial hub.
The Canadian banking landscape has long been dominated by the “Big Five” – a concentrated market that has historically made it difficult for newcomers to gain significant market share. Neo’s strategy of partnering with retailers to offer enhanced rewards while delivering a seamless digital experience has clearly struck a chord with consumers seeking alternatives to traditional banking relationships.
Anders McKenzie, who leads Deloitte’s Technology Fast 50 program, pointed to Neo’s unique position: “Neo Financial exemplifies what happens when you combine technological innovation with deep understanding of consumer needs. Their continued dominance in our Fast 50 program demonstrates not just impressive growth metrics, but sustainable business fundamentals.”
The company’s success comes against a challenging backdrop for the broader fintech sector. Following the investment frenzy of 2020-2021, many fintechs globally have struggled with valuation corrections and funding challenges. Neo, meanwhile, secured a $185 million Series C funding round last year, bringing their total funding to over $299 million and positioning them as one of Canada’s tech unicorns with a valuation exceeding $1 billion.
What’s particularly interesting about Neo’s approach is their geographical strategy. Unlike many Canadian startups that immediately target U.S. expansion, Neo has doubled down on serving the Canadian market comprehensively. This focus has allowed them to build deeper relationships with their user base and develop products specifically tailored to Canadian financial needs.
“We’ve seen too many Canadian companies rush to cross the border before they’ve truly solved problems in their home market,” said Jeff Adamson, Neo’s co-founder and Head of Partnerships. “We believe there’s still enormous opportunity to reimagine financial services right here in Canada.”
Neo’s accomplishment is even more remarkable considering Calgary’s emergence as a fintech hub. Historically overshadowed by Toronto and Vancouver in the tech ecosystem, Calgary has been steadily developing its innovation infrastructure, supported by initiatives like the Opportunity Calgary Investment Fund and a growing network of incubators and accelerators.
The company’s rise also showcases how former Skip The Dishes executives – including Neo co-founders Andrew Chau and Jeff Adamson – have successfully applied their experience scaling a previous tech success to a new venture in a different sector. Their prior experience navigating hyper-growth appears to have prepared them well for building Neo’s operational foundation.
Looking at the broader Deloitte Fast 50 list, several trends become apparent. Fintech continues to be a powerhouse category, with companies like Properly, Brim Financial, and Nesto also making the ranking. Additionally, there’s strong representation from health tech and enterprise software companies, reflecting the pandemic’s lasting impact on digital transformation across industries.
But the question on everyone’s mind is: can Neo maintain this remarkable growth rate? The company faces several challenges moving forward. Customer acquisition costs in financial services typically increase as companies move beyond early adopters. Additionally, rising interest rates have changed the competitive landscape for savings products across the board.
Neo has been addressing these challenges by expanding its revenue streams beyond interchange fees from credit card transactions. Their Neo Money account, which offers competitive interest rates, and their recently launched investment platform create multiple touchpoints with customers while diversifying their income sources.
The company has also been strengthening its management bench with strategic hires from major financial institutions and tech companies. Last quarter, they brought on former executives from Royal Bank of Canada and Amazon to bolster their risk management and technology operations respectively.
For Canadian consumers, Neo’s continued success potentially signals a broader shift in the financial services landscape. The company has demonstrated that Canadians are open to alternative financial providers when presented with tangible benefits and seamless user experiences – something that should keep the established banks on their toes.
As we look ahead to 2024, Neo faces both opportunity and challenges. The company will need to navigate the increasing competitive pressure from both traditional banks enhancing their digital offerings and other fintechs targeting specific financial verticals. Their ability to maintain growth while continuing to innovate will be closely watched by investors and industry observers alike.
What’s clear is that Neo’s unprecedented three-year run atop Canada’s fastest-growing technology companies list has firmly established them as more than just another fintech startup. They’ve become a case study in how to build a disruptive financial services company in a market long dominated by established players.
And for the Canadian technology ecosystem more broadly, Neo’s success provides a template for how homegrown companies can achieve significant scale by deeply understanding local market needs before pursuing international expansion.
As Andrew Chau puts it: “We’re just getting started. Our vision extends far beyond what we’ve built so far. We want to fundamentally change Canadians’ relationship with money.”
If their performance on the Deloitte Fast 50 for three consecutive years is any indication, they might just do exactly that.
