Brazilian digital bank Neon announced on Thursday that its revenues grew 3x in 2021.
Neon stated that it expects to see its revenue rise more than double this year. The digital bank further disclosed that it doubled its headcount from 800 to 1,600 employees in 2021 and expects to hire an additional 700 talents by the first half of 2022 to support its growth goals.
Neon made the revelation when it announced an overview of the firm’s growth and momentum that led up to its recent US$300 million Series D funding round, which resulted in its achievement of Unicorn status with a valuation of US$1.6 billion.
In February, Neon raised $300 million in a Series D funding round led by European bank BBVA. Counting the new fundraising, the digital bank has already received more than $726 million in investments from companies such as BlackRock, General Atlantic, Monashees, , Quona Capital, Vulcan Capital, and others.
The increased demand for digital services amidst the pandemic assisted in accelerating Neon's rapid growth trajectory as its platform provides an alternative to traditional banking solutions. As a result, Neon reached 15 million customers in 2021.
While Brazil is the largest economy in Latin America, 80% of the population in the country is low-income. Neon's focus is on serving the needs of this group, which includes microentrepreneurs and people with informal employment. Today 88% of Neon’s customers belong to the C, D, and E classes in Brazil. Currently, Neon handles an average of more than US$1.2 billion US monthly in transactions.
Pedro Conrade, founder and CEO of Neon, commented about the development and said: “Neon has grown tremendously and is increasingly solid, but one thing has never changed, our purpose - to improve the finances of Brazilian workers - is what drives us. Our expectation for this year is to more than double our revenue.”
Booming Digital Banking
The importance of neobanks across Brazil has continued to increase. In 2021, digital banks like Neon, Nubank, Ame Digital, Mercado Pago, Banco Pan, and PagBank had more than 95 million monthly active users. They surpassed what traditional Brazilian banks, such as Santander, Caixa, Bradesco, and Itaú, had by more than 15 million active users a month.
However, traditional banks through their digital divisions are also engaging in such a new approach to banking and finance.
Besides Neon, Nubank is another good example of how digital banks are changing the banking industry in the country.
After its initial public offer on NASDAQ in December last year, Nubank’s valuation hit US$41.5 billion. It is considered the most valuable bank in Latin America, overtaking even Banco Itaú, with its massive annual profit and huge market share.
Early this month, Nubank announced to its 50 million customers.
Image source: Shutterstock
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