The Spanish banking group will increase its stake in the Brazilian fintech start-up to 29.7%
Brazilian digital bank Neon secures $300m investment from BBVA. (Credit: Zarateman/Wikipedia.org)
Banco Bilbao Vizcaya Argentaria (BBVA) has agreed to invest $300m in Brazilian digital bank Neon to acquire an additional stake of 21.7% in the latter.
The Spanish banking group has been a stakeholder in the Brazilian fintech firm since 2018 through its venture capital fund Propel Venture Partners. After the latest transaction, BBVA’s stake in Neon will increase to 29.7%.
Established in 2016, the Brazilian start-up aims to boost access to financial services for individuals, small businesses, and self-employed in Brazil. Currently, the company is said to have 15 million registered accounts.
Through various financing rounds, Neon had raised $423m from investors such as General Altlantic, BlackRock, Vulcan, Banco Votorantim, Paypal, and others. In September 2020, the Brazilian fintech had secured $300m in a Series C round.
Neon founder Pedro Conrade said: “BBVA’s investment and global expertise will allow Neon to offer loans in a more simple, sustainable and inclusive way.
“We want to reach more Brazilians, contributing to reducing inequalities and making a difference in their lives. Neon will continue to grow rapidly, while delivering on its purpose.”
According to BBVA, its latest investment comes in a context of an unparalleled technological disruption, with robust growth of digital and innovative models, mainly in financial services.
The Spanish banking group said that the investment enables it to get exposure to retail banking in Brazil.
It further stated that Neon marks a new step in its strategy to foray into new markets via investments in digital platforms.
Apart from the Brazilian fintech firm, BBVA has investments in other digital platforms such as the UK-based Atom Bank and Germany’s Solarisbank.
BBVA chairman Carlos Torres Vila said: “The commitment to innovation is part of BBVA’s DNA, and digital is opening new ways for us to grow in very attractive markets.
“Neon’s value proposition connects with the financial needs of Brazilians serving as a platform to continue to grow rapidly in a market with great potential.”