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Mobile banking provider Koho Financial Inc. has raised $70-million in its latest financing, new money that leads to Power Corp. giving up its controlling stake in the company.

Koho will announce next week that its latest round of funding was led by new investor Atlanta-based TTV Capital, with commitments from returning investors Drive Capital and Portag3 Ventures, a wing of Power Corp.’s alternative-investing arm Sagard Holdings ULC.

Koho did not disclose how much each investor contributed to the latest round but Power’s economic interest in the company decreases with the new financing.

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Prior to the latest round, Power Corp. – through a limited partnership with its subsidiaries Portag3, Great-West Lifeco Inc. and IGM Financial Inc. – held a 54.4-per-cent equity interest in Koho, as of Sept. 30, 2020.

Now, Power, through Portag3 Ventures, will continue to be Koho’s largest shareholder but will no longer have a controlling interest.

Koho offers clients mobile banking through a fee-free account that allows them to spend funds with a prepaid Visa card. The company makes its revenue from interchange fees that credit-card companies earn from retailers.

Over the past year, as the pandemic caused countrywide lockdowns, the number of new account openings surged as Canadians began to embrace digital financial offerings at a more rapid pace.

As a result, Koho chief executive officer Daniel Eberhard said the company’s growth “surpassed” expectations as the number of customers signing up for the banking application nearly doubled to more than 350,000 users since 2019.

As a result of the impact of the pandemic on many Canadians, Koho launched an early payroll feature for accounts, allowing clients to request a free loan up to two days prior to their scheduled payroll deposit.

In recent weeks, the company has also updated all accounts to include a high-interest savings rate of 1.2 per cent.

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Mr. Eberhard said the capital injection will help fuel the next phase of growth, which will include continuing to expand its client base and introducing more saving options for users.

Koho’s newest investor, TTV Capital, is a pioneer of investing in financial technology companies, with a focus on payments, banking and data analytics. Prior to Koho, the venture-capital firm invested in startups such as payment-processing company BitPay and Greenlight, which provides a debit card for children managed by parents.

“The landscape of financial services is changing rapidly in the digital age,” Gardiner Garrard, co-founder and managing partner of TTV Capital, said in a statement. “As a result, individuals need a more modern banking product.”

Koho has raised $145-million over four rounds of financing since 2016. Its latest round follows a cyberattack last year that exploited a technical glitch in its transfer technology.

The attack, which involved more than $1-million in allegedly fraudulent transactions, was “fixed within hours,” Mr. Eberhard said, and did not have an impact on any customer funds or data.

Since then the company increased cybersecurity controls across the mobile application, and has added several new C-suite executives, including chief financial officer Felix Wu, a former President’s Choice Financial executive, and chief technology officer Jonathan Klein, a former director at e-commerce company Wayfair.

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