Banco Bilbao Vizcaya Argentaria (BBVA) has agreed to invest $300m in Neon, a Brazilian digital bank, in exchange for a 21.7% stake in the company.
The Spanish bank, through its venture capital fund Propel, already owned a stake in Neon since 2018. Following the transaction, its total stake in Neon reaches 29.7%.
Established in 2016, Neon provides individuals, self-employed and small businesses in Brazil with a competitive alternative to the traditional banks.
Its product offering includes free checking accounts, debit and credit cards, payroll loans and specialised products for small businesses.
Prior to investment from BBVA, Neon had raised $423m in several financing rounds.
Investors including General Altlantic, Vulcan, BlackRock, Paypal and Banco Votorantim, among others, participated in the previous rounds.
Neon will continue its operations under its existing management team, comprising founder and CEO Pedro Conrade and executive managing partner Jean Sigrist.
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.”
BBVA said that its latest investment in Neon will complement its other investments in digital platforms, such as the UK’s Atom Bank and Germany’s Solarisbank.
It has recently entered the Italian retail banking market with a 100% digital offering based on its app, which has been used in Europe for five years.
According to the Spanish company, the investment in Neon will fuel a technological disruption and provide exposure to retail banking in the attractive Brazilian market.
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.”
