FinTech: Neo Enters Multicurrency Corporate Payment Market

FACTS

• The FinTech Neo will be introducing corporate multi-currency accounts enabling businesses to pay and be paid in more than 30 currencies.

• Targets: European SMEs.
• Goals: Help companies grow internationally, via streamlining day-to-day currency management for them.
• This FinTech was launched in 2017 in Barcelona. They were aiming at digitising Corporate and Investment Banking businesses. Their new offer lets them open multicurrency accounts in just a few minutes.
• This service will be relying on their Neo FinTech Lab SL structure which was granted PI status in Spain in July. It comes in addition to their existing FX hedging services featured via their investment-focused structure (Neo Capital Markets).
• Business Model: the multicurrency account will cost €100/month for a limited number of users.
• This solution will be available in France, in Spain, in Poland and in the UK.

CHALLENGES

• Regulatory challenge. Neo had entered discussions with several regulators on launching a hybrid structure encompassing investment services and a payment company. Their request was, however, rejected due to regulatory issues, leading them to craft two structures, with unified services.
• Financial one-stop shop. Neo will be one of the first FinTechs in Europe gathering investment services and a payment unit on a single platform. This start-up intends for their getneo.com platform to become a one-stop portal for access to a wide range of financial services (multicurrency accounts, FX hedging services, placement of surplus cash, etc.).
• Geographical expansion. They now claim 30 customers and would intend to attract 200 clients by end-2020. They haven’t yet managed to win French clients. Even so, a French office would be scheduled to open in 2020 and a team of ten people would be hired.

MARKET PERSPECTIVE

• In September 2018, Neo raised €5 million to boost their workforce and speed up their development process.
• Their new solution is reminiscent of iBanFirst’s multicurrency account. This French-Belgian FinTech raised €15 million in November 2018 as they aimed for international reach and targeted corporate payment corridors.