Evaluating only Neon (first iteration)’s profile at its peak — without knowing the outcome — the model ranked Competition as the #1 likely cause. Documented cause: Regulation.
Key Events Timeline
FOUNDING
Pedro Conrade founded Neon in São Paulo as a fee-free digital bank account for Brazilians underserved by big banks.
FUNDING
Neon raised $13M from investors including Omidyar Network and Propel Venture Partners.
REGULATORY ACTION
Banco Central revoked the license of Neon's banking partner Banco Pottencial, locking 350,000 customers out of R$50M.
SHUTDOWN
Neon temporarily ceased operations before relaunching under Banco Votorantim as new licensed partner.
Full Analysis
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Documented cause
Neon, Brazil's early challenger bank founded by Pedro Conrade in 2016, had its banking license revoked by Brazil's Central Bank (Banco Central do Brasil) in August 2018, forcing a temporary shutdown. The regulator found that Neon's partner, Banco Pottencial, had failed to maintain adequate capital reserves. Over 350,000 customers were temporarily locked out of accounts holding R$50M. Neon re-emerged weeks later under a new banking partner, Banco Votorantim, in what became a near-fatal regulatory crisis.
Lesson
“Neobanks depending on licensed banking partners carry existential risk from that partner's regulatory compliance.”