Neon closes USD 300 mln funding round led by BBVA

With this investment, BBVA acquires a 21.7% stake in Neon. As the group already held a stake since 2018 through its venture capital fund Propel, now BBVA’s stake will total 29.7% of Neon.

Founded in 2016, Neon aims to improve access to financial services for individuals, self-employed and small businesses; its product portfolio includes free checking accounts, debit and credit cards, payroll loans and specialised products for small businesses. The digital bank currently has 15 million clients, 88% from the middle and lower social classes, and handles more than BRL 5.8 billion per month in transactions. The Series D round will be allocated to technology, marketing, products, and capital to expand Neon’s reach.

The company’s strategy is to launch new products based on its Democredit platform, proprietary intelligence for credit approval. Neon believes that this is a differential for the contingent of Brazilians who seek sustainable financing.

Neon represents a new step in BBVA’s strategy to enter new markets, allowing the company to gain exposure to retail banking in.

Since its creation in 2016 and prior to BBVA’s investment, Neon had raised USD 423 million from investors through several financing rounds. In 2018, the digital bank secured a Series A with Propel Venture Partners, Monashees, Quona Capital and Flourish Ventures. The following year, it received a Series B led by General Atlantic and Banco Votorantim. In 2020, Neon secured a USD 300 million investment led by General Atlantic, and followed by BlackRock, Vulcan Capital, PayPal Ventures, Endeavor Catalyst and Propel.