With the acquisition of the financial company Biorc, Neon will expand its product offering

January 26, 2022
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The digital bank Neon has just closed the purchase of the Santa Catarina finance company Biorc.

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With the acquisition, which has not been disclosed, the fintech will have the necessary license to operate directly in credit operations, as well as access to new funding structures and sources.

As usual, the transaction still depends on approval from the Central Bank (BC).

Founded in 2009, Biorc focuses on granting private payroll loans, one of Neon's main strategies, which in 2020 had already purchased ConsigaMais+, one of the main fintechs in the sector.

“With this acquisition, Neon will be able to offer all the financial services and products a customer could want. It was a natural step to better serve the Brazilian worker”, says Pedro Conrade, founder of Neon, in a statement.

The purchase of the finance company is one more step by Neon — today with 15 million customers — in its move to be the bank for working Brazilians. The objective, as Pedro has been saying for some years, is to compete with the largest banks in the country.

The avenue of growth via M&A is not new at Neon. In 2019, fintech bought MEI Fácil, to advance among individual microentrepreneurs. The following year, it acquired the Magliano brokerage and the private payroll fintech ConsigaMais+.

In April of last year, Neon received authorization from the BC to operate as an IP (Payment Institution), in the modalities of issuing electronic money and issuing postpaid payment instrument.

Since its founding in 2016, Neon has raised more than $420 million, according to Crunchbase data. The last investment was a Series C, announced in September 2020, when it raised US$ 300 million (R$ 1.6 billion, at the exchange rate at the time) in a round led by General Atlantic (GA), with the participation of BlackRock, Vulcan Capital, Endeavor Catalyst and PayPal Ventures.

Also part of the captable are Monashees, Flourish Ventures, Propel Venture Partners and BV. The bank even helped Neon to continue operating in 2018, when Banco Neon (formerly Pottencial, a small institution in BH) had its liquidation decreed by the BC.

At the time, the closure of the mining bank's operations caused doubts about the fintech's future, but it is worth remembering that Neon Pagamentos (which was born as Controly) had only one commercial agreement with Pottencial — replaced at the time by BV. That is, there was no equity interest of the mining institution in fintech.

In the “battle” for the Brazilian worker, Neon faces fierce competition from digital banks and fintechs. The largest of them, Nubank, is approaching 50 million customers. Inter, in turn, already exceeds 16 million and C6, founded in 2019, surpassed 14 million.

Despite the differences and proportions, all are now positioned with more complete offers, abandoning in a way the 'unbundling' seen long ago. The combination of banking and marketplace has also been a common strategy among players.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

With the acquisition, which has not been disclosed, the fintech will have the necessary license to operate directly in credit operations, as well as access to new funding structures and sources.

As usual, the transaction still depends on approval from the Central Bank (BC).

Founded in 2009, Biorc focuses on granting private payroll loans, one of Neon's main strategies, which in 2020 had already purchased ConsigaMais+, one of the main fintechs in the sector.

“With this acquisition, Neon will be able to offer all the financial services and products a customer could want. It was a natural step to better serve the Brazilian worker”, says Pedro Conrade, founder of Neon, in a statement.

The purchase of the finance company is one more step by Neon — today with 15 million customers — in its move to be the bank for working Brazilians. The objective, as Pedro has been saying for some years, is to compete with the largest banks in the country.

The avenue of growth via M&A is not new at Neon. In 2019, fintech bought MEI Fácil, to advance among individual microentrepreneurs. The following year, it acquired the Magliano brokerage and the private payroll fintech ConsigaMais+.

In April of last year, Neon received authorization from the BC to operate as an IP (Payment Institution), in the modalities of issuing electronic money and issuing postpaid payment instrument.

Since its founding in 2016, Neon has raised more than $420 million, according to Crunchbase data. The last investment was a Series C, announced in September 2020, when it raised US$ 300 million (R$ 1.6 billion, at the exchange rate at the time) in a round led by General Atlantic (GA), with the participation of BlackRock, Vulcan Capital, Endeavor Catalyst and PayPal Ventures.

Also part of the captable are Monashees, Flourish Ventures, Propel Venture Partners and BV. The bank even helped Neon to continue operating in 2018, when Banco Neon (formerly Pottencial, a small institution in BH) had its liquidation decreed by the BC.

At the time, the closure of the mining bank's operations caused doubts about the fintech's future, but it is worth remembering that Neon Pagamentos (which was born as Controly) had only one commercial agreement with Pottencial — replaced at the time by BV. That is, there was no equity interest of the mining institution in fintech.

In the “battle” for the Brazilian worker, Neon faces fierce competition from digital banks and fintechs. The largest of them, Nubank, is approaching 50 million customers. Inter, in turn, already exceeds 16 million and C6, founded in 2019, surpassed 14 million.

Despite the differences and proportions, all are now positioned with more complete offers, abandoning in a way the 'unbundling' seen long ago. The combination of banking and marketplace has also been a common strategy among players.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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