Neon, a Brazilian digital bank, has raised US$94 million from top investors.

Digital Brazilian bank Neon has ambitious plans in a high-growth market. It will use the funds to triple the number of its new customers by 2020. The challenger bank already has about two million active accounts.

Neon is also considering the roll-out of new products such as personal credit lines and investment services, according to co-founder Pedro Conrade.

Neon is looking to boost its workforce numbers, too, especially in technology. Already it is likely to end 2019 with 600 employees. That’s three times what it began the year with.

Neon may even consider acquisitions. Neon could follow up on its recent acquisition of Mei Facil. Mei Facil provided a platform designed to support micro-entrepreneurs.

The fund-raising is timely. The field is already highly competitive. Neon’s peers are Nubank and Banco Inter, plus names like C6 Bank, BS2, and Next. Neon may also, therefore, invest in a marketing campaign, maybe even off-the-internet. “We are well known in the digital world, but we want to make room in the offline world,” says Conrade.

Neon digital bank: Hot-shot growth

Neon’s revenue is up nine times in the last year. According to one report, 55 million people in Brazil do not have a bank account. Further, the top five banks in Brazil, led by Itaú Unibanco, control about 82 percent of banking assets. In June this year, Brazil’s Economy Minister Paulo Guedes said: “Banks’ profits are huge, they are really excessive.” He also complained that large sectors of the economy, including banking, were ‘cartelized.’

It’s well-known that in Brazil, people pay the highest fees and interest rates in the world for the worst banking services.

Neon to live down some unsavory history

In May this year, Neon’s banking partner, Banco Pottencial (later renamed Banco Neon) had been liquidated by the Brazilian central bank due to a breach in regulations. Neon, therefore, lost its back-office infrastructure and had trouble servicing customers. It, however, salvaged the situation by finding a new partner in Banco Votorantim, Brazil’s seventh-largest bank.

Current funding

Banco Votorantim and General Atlantic led the current funding round of $94 million. Washington, D.C.-based Quona Capital, Propel Venture Partners, Omidyar Network, and Monashees also participated.

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