Neon receives USD 300 mln in Series C funding round

Neon Pagamentos, a Brazilian fintech, has secured a Series C investment of USD 300 million led by General Atlantic, a global growth equity company.

New investors participating in the round include funds and accounts managed by BlackRock, as well as Vulcan Capital, PayPal Ventures, and Endeavor Catalyst, in addition to former investors Monashees and Flourish Ventures. BBVA also participated via existing shareholder Propel Venture Partners. The investment will be split between two tranches of USD 150 million each.

The Series C proceeds will be used to support hiring efforts, grow Neon’s user base across consumer and business clients, enhance the platform’s technology capabilities, and invest in product development.

Specifically, the financing will fuel key growth areas, including the release of new products and features on Neon’s consumer platform, including those geared toward direct deposit customers, as well as rolling out additional financial services to its growing user base of around 1 million micro-entrepreneurs through its MEI Fácil platform, which provides tax and payments products. Proceeds will also be used to scale the company’s credit offerings, which will be key to driving additional business monetisation. It will also enable Neon to pursue strategic M&A opportunities that can further enrich its offering.

Founded in 2016, Neon launched with a simple digital account and has since expanded its product suite to include investment products, credit cards, and personal loans, among other new offerings and features. It has expanded its initial focus on consumer clients to also serve small businesses, accelerated by its acquisition of MEI Fácil in 2019. Most recently, in July 2020, Neon acquired one of Brazil’s first brokerage platforms, Magliano Invest, in order to offer new investment products.

This is the company’s third funding round to date. It raised a USD 22 million Series A in May 2018 from Propel Venture Partners, Monashees, Quona Capital, and Omidyar Network, later spun-off as Flourish Ventures, followed by its November 2019 Series B financing of USD 92 million co-led by General Atlantic and Banco Votorantim, Neon’s banking partner.