BBVA reached an agreement to invest US$300 million in Neon, a digital bank founded in 2016 that facilitates access to financial services among individuals, freelancers and small Brazilian companies and that It has 15 million registered accounts.
“This investment occurs in a context of unprecedented technological disruption, with strong growth in digital and innovative models, especially in the financial sector. In addition to a clear commitment to innovation, the investment allows BBVA to have exposure to the banking business retailer in Brazil, one of the markets with the greatest potential in the world,” BBVA reported in a press release.
Through this new investment, BBVA acquires 21.7% of Neon. The BBVA Group already had a stake since 2018, through the Propel venture capital fund. Following this new investment, BBVA’s stake will add up to a total of 29.7% of Neon.
Neon marks a new step in BBVA’s strategy of entering new markets through investment in digital platforms. Brazil is a very attractive market due to the size of its economy (the eighth in the world and the first in Latin America), its large population (more than 210 million inhabitants) and the development of attractive proposals for digital financial services.
“The strategic commitment to innovation is one of BBVA’s hallmarks and the digital path opens up a path for us to grow in very attractive markets”, said Carlos Torres Vila, president of BBVA. “Neon has proven to have a value proposition that is connecting with the financial needs of Brazilians and has the capabilities to continue growing rapidly in a market with great potential.”
The investment in Neon is added to those already made by BBVA in other financial digital platforms such as Atom Bank in the United Kingdom and Solarisbank in Germany. In addition, BBVA has also recently entered the Italian market with an offer for 100% digital retail customers, based on the experience of its ‘app’, recognized for the fifth consecutive year as the leader in Europe.
Neon was founded in 2016 with the aim of offering a simpler and more competitive alternative to traditional Brazilian banks. Through a unique product offering – which includes free checking accounts, debit and credit cards, payroll loans and specialized products for micro-enterprises – Neon has managed to differentiate itself from the competition with a focus on individuals, freelancers and small businesses. .
Before BBVA’s investment, the company had managed to raise US$423 million in various rounds of financing since its creation in 2016, and its shareholders include other partners such as General Atlantic, Vulcan, BlackRock, Paypal and Banco Votorantim. Its management team consists of Pedro Conrade, founder and CEO, and Jean Sigrist, executive president, who lead the company.
“With BBVA’s investment and global experience, Neon will be able to offer loans in a simpler, more sustainable and inclusive way. We want to reach more Brazilians and promote our purpose of reducing inequalities and making a difference in the lives of people in Brazil. Neon will continue to grow rapidly while meeting these goals,” said Pedro Conrade, founder of Neon.
It is expected that the subscription of the shares and the payment of the price will take place during this month.
