BBVA has reached an agreement to invest $300 million (about €263 million¹) in Neon, a Brazilian digital bank founded in 2016 that aims to improve access to financial services for individuals, self-employed and small businesses in its country. Neon has 15 million registered accounts. The investment takes place in a context of unprecedented technological disruption, with solid growth of digital and innovative models, particularly in financial services. In addition to a clear commitment to innovation, this investment allows BBVA to gain exposure to retail banking in Brazil, a market with one of the highest potential in the world.
Neon was founded in 2016, aiming at offering a simple and competitive alternative compared to the traditional Brazilian banks. Through a unique product offering –including free checking accounts, debit and credit cards, payroll loans and specialized products for small businesses– Neon has set itself apart from the competition with a focus on the individuals, self-employed and small businesses.
With this new investment, BBVA acquires a 21.7% stake in Neon. The Group already held a stake since 2018 through its venture capital fund Propel. Following this transaction, BBVA’s stake will total 29.7% of Neon.
Neon represents a new step in BBVA’s strategy to enter new markets through investments in digital platforms. Brazil is a very attractive market given the size of its economy (8º in the world and 1º in Latin America), its large population (more than 210 million people) and the development of interesting propositions in the digital financial services arena.
“The commitment to innovation is part of BBVA’s DNA, and digital is opening new ways for us to grow in very attractive markets,” BBVA Chairman Carlos Torres Vila said. “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.”
The deal with Neon adds up to other investments by BBVA in digital platforms, such as Atom Bank in the U.K. and Germany’s Solarisbank. Additionally, BBVA recently entered the Italian retail banking market with a 100% digital offer, based on its award-winning app, which has been recognized as a leader in digital experience in Europe for five years in a row.
Uria Menéndez acted as European legal counsel to BBVA with Madrid office International counsel Alex Bircham leading the firm’s deal team, and Corporate/M&A associate Luis Ignacio Díaz González. Uría Menéndez team was also led by partner Juan Martín Perrotto with the support of senior associates Martín Jordano and Arlanza Sánchez García.
Coordinating the legal affairs of the deal, Neon counted with its general counsel Larissa Arruy. Clifford Chance acted as UK counsel to Neon, and Pinheiro Neto acted as Brazilian legal counsel to BBVA.