Brazilian fintech Neon closes Series B worth US$95 million

Contxto – Fintech competition keeps getting stiffer in Brazil. Yesterday, Neon announced a R$400 million (around US$95 million) Series B investment round led by the General Atlantic fund and Neon’s partner, Banco Votorantim. Joining them on this feat were Omidyar, Propel, monashees, Mabi and Quona.

Prior investments took place in May 2018 for US$22 million in a Series A. Based on these two rounds, Neon has reportedly raised around US$117 million in funding. From here, Neon plans to allocate funds to fuel growth and expansion not only in terms of product but also staff and geographic reach.

Fintech growth in 2019

There’s much to be found in Neon’s plans for this investment round in terms of scaling up. First, by offering credit and investment options for their users.

“We want to be a complete account that meets all customer needs,” explained Pedro Conrade, Neon’s co-founder.

Likewise, Neon intends to triple its current customer base of 2 million next year. For this, it plans to hire more team members to facilitate higher capacity. As things currently stand, this fintech reportedly plans to end 2019 with 600 employees. In the end, that’s triple the amount it had at the beginning of the year!

Lastly, the startup will be getting out of its geographical comfort zone in the Rio-São Paulo area.

All of this appears to be part of Neon’s overall strategy in 2019 to extend its reach in terms of customers. As you may recall, earlier this year, Neon acquired fellow fintech MEI Fácil. Resulting from this, Neon was able to have greater access to micro-level entrepreneurs.

Banking fintech competition

Just a few weeks ago, we saw banking giant Itaú acquire startup Zup. Likewise in Europe, Santander acquired fintech Ebury earlier this month. Now more recently, we’re hearing about Banco Votorantim investing money into Neon.

With so much fintech activity throughout the world, there are financial institutions playing their own game of fintech chess. Who will declare checkmate? Honestly, I don’t think there will be a winner.

The way I see it, it’s still a matter of leading fintechs by regional markets. As we’ve come to see in Latin America, oftentimes a single country can have different needs, and depending on the need, there’s a fintech.

Of course, from all of this buzz, this means that there’s a risk of a living in a fintech bubble. Either way, I don’t mind. It’s fun to watch them go neck-in-neck.

More importantly, though, I savor watching big banks scramble to improve their customer service strategies through tech. After all, a little competition never hurt anybody. If anything, it benefits us, the users.

-ML