Panel SA: Former bikini salesman becomes banker and attracts millionaire investors

Before founding Neon, a fintech that has raised almost BRL 4 billion in investments since its creation, Pedro Conrade, 30, started his career with a bikini store in Guarujá, on the coast of São Paulo, still in his teens.

After winning a scholarship and moving to São Paulo, the distance prevented the bikini store from continuing to operate. But other businesses eventually emerged.

He founded other startups with a partner until he opened Neon, which already has 22 million customers. Today, after 14 years, Conrade is a successful businessman in the financial sector. “I’ve always been an entrepreneur.”

How did you go from owning a bikini shop to becoming a banker?I don’t consider myself a bikini salesman or a banker. I’ve always been an entrepreneur. I was born wanting to have my own business.

The store started when a friend from São Paulo said she was going to Guarujá and couldn’t find a bikini for a good price and with quality. My father gave me some money to paint the store, set up the window and buy the mannequins. We went to Brás to buy bikinis. I tagged it for twice the value and sold it. That simple. I was 16 years old, studying and running the store. It was two years like that. Then I got a scholarship for administration at FGV in São Paulo, I went to college, but I continued with the store.

Sales fell, stock began to fail. Everything went wrong. I learned that the owner’s eye makes the pig fat. It has to be close. Things don’t go on automatic.

And how did it end up in the banking sector?I had a partner in other startups before Neon. I was 23 when I set up fintech. I was supposed to have graduated, but I was working. I stretched as long as it took, but I had to give up [a graduação]🇧🇷

the fuse [para abrir a fintech] that’s when I used R$ 1.00 from my overdraft and they charged me R$ 46 in fees. I spent BRL 800 a year on bank fees, and I earned BRL 1,500 a month.

I already understood a little bit of this technology, not much. And I wanted to start a digital account: an application connected to the card. You use it, you have the expenses, you deposit it and pay with the bank slip. It started like this. And it became something bigger. What’s the point? Take the customer out of the clutches of tariffs at “banks”.

Today there are credit cards, personal loans, private payroll, investments, all types of transactions.

At Neon, did you start alone or did you have a partner?A lot of people joined in the beginning and, until today, there is a group of partners with 10% of the company.

Neon started out as a tech company with no financial institution licenses. We partnered with banks to be able to operate. Over time, we got payment institution licenses, DTVM [Distribuidora de Títulos e Valores Mobiliários ] —through the acquisition of Magliano—, and, recently, financially with the purchase of Biorc.

Did you need investors to get started?Neon’s first round was BRL 855,000 with 14 angel investors. I see startups today starting out with a $3 million check and still complaining. I had to work hard to get investors. To date, the company has raised more than R$3.7 billion in investments.

How did you convince these people to invest in a business run by someone with no experience?People could see that I wanted to make things happen. And the investment is not going up to someone and saying: “hi, how are you? Give me the money. Bye”. You know [o investidor], says what it is building. After a month, she goes there and says ‘Look, I’ve already done this here’.

It was like this with all our investors. The first time I spoke with General Atlantic [gestora de private equity], for example, who was a big investor, I was looking for $300,000. They said, “Here at GA it’s at least $30 million to start making sense.” I said: “Okay, in two lifetimes I’ll come back and ask for this money”. Three or four years later they invested in Neon.

How does the company differ from traditional banks?At Neon, people have access to different credits. When we analyze the user, we know if he is negative. And then we give the person the chance to build credit with us. Come here at Neon, use our account for two or three months, pay an electricity bill, receive your salary, do your portability. We understand your behavior and almost forget your past. In fact, 80% of our approval comes 30, 60 or 90 days after the person is at Neon.

So there’s no way to deny the customer’s credit request?Has. If someone arrived here super indebted and negative, we don’t give a credit card today. But, if I use the Neon account for two or three months and do two or three more things, like placing an investment of R$50, I can already give a first credit to be used.

How do they compete with the big banks?“Banks” have very expensive fixed cost structures. We don’t have. The team is almost 100% remote. Today there are 50 people in the office out of the 2,200 who work at the company. About 60% of the team lives outside São Paulo. What’s the conversation here? Be efficient and low cost [gerar pouca despesa] not to pass on our efficiency to the customer.

X-ray

Peter Conrade

Age: 30

Career: He founded fintech Neon in 2016. Before that, he was a partner in a venture building and two other startups.