Brazil’s New Fintech Unicorn Neon Raises $300M Series D Round

Spanish bank BBVA led the investment, which will be applied in technology, marketing, and products

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February 14, 2022 | 12:03 PM

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Brazilian fintech Neon announced on Monday that it raised $300 million in a Series D round led by European bank BBVA. Counting the new fundraising, the neobank has already received more than R$3.7 billion in investments. The company does not disclose its valuation, although it said it has already reached more than $1 billion.

Asked if this would be a pre-IPO round, Jean Sigrist, chairman of Neon’s board, told Bloomberg Línea that the company “thinks one step at a time”. For Sigrist, the IPO is “not an end” but “a way”.

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“We don’t have a concrete plan of when we will do an IPO. With the accelerated growth we have consistently achieved and as we gain more and more scale, the IPO becomes a natural way for us to expand access to the capital markets,” he says.

The banking unicorn will invest the resources in technology, marketing, products. Created in 2016 by Pedro Conrade, Neon said it tripled revenues last year. It reached 15 million customers, 88% of these users from low-income classes.

Neon said it moves more than R$5.8 billion per month in transactions and expects to more than double revenue by 2022.

To achieve this, the fintech plans to launch new products based on its Democredit platform of artificial intelligence for granting credit.

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“We will give all our customers simple and sustainable ways to get credit fairly. This is our contribution to reducing inequalities and making a difference in people’s lives,” Conrade said in a press release.

The founder says the new funding will allow Neon to “serve more and more Brazilian workers”.

“With BBVA’s global support and expertise in digitalization and credit we will have even greater advances,” he said.

In January this year, Neon signed a contract to acquire finance company Biorc, still subject to Brazil’s Central Bank approval. This will be the fourth acquisition for the startup, which in 2019 bought MEI Fácil. In 2020, the company bought brokerage Magliano Invest and payroll loan fintech ConsigaMais+.

Recall Neon’s rounds:

Series A - Propel Venture Partners, Monashees, Quona Capital, and Flourish Ventures invested R$72 million in May 2018.

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Series B - General Atlantic, Banco Votorantim, and some Propel Venture Partners shareholders invested R$400 million in November 2019.

Series C - General Atlantic and investors from BlackRock, Vulcan Capital, PayPal Ventures, Endeavor Catalyst and Propel invested R$1.6 billion in September 2020.

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