Challenger bank Neon raises $300 mn in Series C funding led by General Atlantic

By Pavithra R

Neon Pagamentos, a Brazilian FinTech with the mission to unite technology and design to redesign and simplify people’s financial experience, has announced that the firm has raised a Series C investment of $300 mn led by General Atlantic, a leading global growth equity firm.

The round saw participation from new investors, including funds and accounts managed by BlackRock and Vulcan Capital, PayPal Ventures, and Endeavor Catalyst, along with former investors Monashees and Flourish Ventures. BBVA also participated through existing shareholder Propel Venture Partners. The investment will be split between two tranches of $150 mn each.

The FinTech is planning to use the funding to support its hiring efforts, grow user base across consumer and business clients, invest in product development and enhance the platform’s technology capabilities. The investment will bolster growth areas, including the release of new products and features on Neon’s consumer platform. Proceeds will also be used to enhance the company’s credit offerings, vital to driving additional business monetization. It will also enable Neon to pursue strategic M&A opportunities that can further enrich its offering.

“Neon was born with a clear purpose: to provide an accessible bank account to any Brazilian, placing user experience at the center of everything we do. Unlike banking incumbents in Brazil, we do not transfer the cost of inefficiency to our customers. We are thrilled to partner with our existing and new investors to continue working toward this shared vision,” said Pedro Conrade, Founder of Neon.

The increased demand for digital-based services amid the pandemic has accelerated Neon’s growth trajectory. The company’s platform has met this needs by providing an alternative to in-person banking solutions and has seen a surge in investments, deposits, and online purchases and an uptick of 26% in new users since March.

“Brazilian banking penetration is relatively high for Latin America but still lags developed market peers, with a significant under-banked population that traditional banks have generally overlooked. Neon is focused specifically on providing access to this group and bringing them into the financial world. This new financing enables us to continue our mission of serving even more clients with an increasingly robust offering,” said Jean Sigrist, President of Neon.

“Neon’s digitally-native banking platform offers the features and convenience clients need, especially when going to their local branch may not be practical or desirable. We are excited to be investing in a team and technology that is winning over its retail and small business users with innovative services, low fees, and simplified access via its mobile app,” said William Abecassis, Head of Innovation Capital at BlackRock.

Founded in 2016, Neon was launched with a simple digital account. SInce then the company has expanded its product suite to include investment products, personal loans, and credit cards, among other new offerings and features. Most recently, Neon acquired Magliano Invest, a brokerage platform provider, to offer new investment products.