The archive · Money & Fintech · Strategic decision · 2019–2025
Z1's teen-banking bet: 30%/week growth and $22M raised, then absorbed by rival NG.Cash
Z1 built Brazil's teen neobank — prepaid card, Pix, no-fee accounts — grew 30% a week, raised ~$22M, and in Feb 2025 handed its base to rival NG.Cash.
Z1 · NG.Cash
What the business is
Z1 was a digital bank app for Brazilian and Latin American teenagers and young adults: a fee-free account, a linked prepaid card, Pix cash-out and savings features, monetized later through premium subscriptions (Z1 Pass) rather than parent-controlled allowances.
Starting capital：~$22M total: YC W21 ($125K); Maya Capital-led $700K seed (Mar 2020); $2.5M Homebrew-led round (Jul 2021, with The Chainsmokers' Mantis, Clocktower, Goodwater); $10M Kaszek-led Series A (Nov 2021); $9M 2023 round (Homebrew, Parade Ventures, Kindred Ventures).
How it started
João Pedro Thompson and Thiago Achatz, entrepreneurs-in-residence at Maya Capital, started Z1 in late 2019, with Mateus Craveiro and Sophie Secaf joining as co-founders. The thesis: Gen Z is roughly 30% of Brazil, grew up through recessions, starts earning early, and would switch to a bank that treats them as customers rather than children. YC W21 and a $700K seed led by Maya Capital followed.
What happened
In July 2021 Z1 raised $2.5M led by Homebrew. Six months later, Kaszek led a $10M Series A: revenue had grown 26x (~40%/month) and customers 8x (~30%/month); Z1 made its core banking free after charging $2/month, and cited Brazil's Pix instant-payments launch (105M registered users) as the enabler. A $9M round in 2023 (Homebrew, Parade Ventures, Kindred Ventures) was extended into 2024 — a smaller round from existing investors — as Nubank and other incumbents moved into teen accounts.
How it ended up
Gone as a standalone: negotiations with rival NG.Cash began in December 2024, and on February 13, 2025 NG.Cash absorbed Z1's customer base, taking the combined platform past 6M clients and ahead of Nubank for under-18 accounts. Z1 ceased to exist as a brand; founder João Pedro Thompson said Z1 considered raising again in 2025 but chose the deal, and the founders did not join NG.Cash.
Background
Z1, co-founded in late 2019 by João Pedro Thompson and Thiago Achatz (with Mateus Craveiro and Sophie Secaf), bet that Brazilian Gen Z — about 30% of the population, raised through recessions and earning early from side hustles — would embrace a dedicated teen bank rather than a parent-controlled allowance app. Its wedge was a fee-free account, a prepaid card and Pix cash-out for teens who already worked and sold goods online, marketed through word-of-mouth and TikTok instead of paid acquisition.
The early numbers validated the thesis: Z1 grew about 30% a week and 200% a month after launch with almost no marketing spend, per TechCrunch in July 2021, after Y Combinator W21 and a Maya Capital-led $700K seed. A $2.5M Homebrew-led round followed, then a $10M Series A led by Kaszek in November 2021 — revenue had grown 26x in six months (~40% a month), customers 8x, and Brazil's Pix launch (105M registered users) was the tailwind. Z1 made its core account free after briefly charging $2/month.
Then the competitive window closed. Nubank and other incumbents added teen products, and Z1's 2023 round ($9M, Homebrew/Parade/Kindred) was smaller and extended into 2024 with mostly existing investors. In a market where the biggest player could give teen accounts away, a dedicated pure-play had trouble raising growth capital on its own terms.
The ending was rational rather than dramatic: negotiations with rival NG.Cash began in December 2024 and on February 13, 2025 the customer base was absorbed — pushing the combined platform past 6M clients and ahead of Nubank for under-18 accounts. Z1 ceased to exist, the founders did not join NG.Cash, and CEO Thompson said the deal made more sense than raising again in 2025.
What has to be true
- Z1 bet that Gen Z would choose a dedicated teen bank, not a parent-controlled app, and stay for life — a loyalty play incumbents could not copy overnight.
- The wedge worked early: 30%/week growth and 26x revenue in six months proved teens wanted prepaid cards, Pix and fee-free accounts.
- The moat didn't hold: Nubank and rivals moved into teen accounts, and a $9M 2023 round plus a 2024 extension showed investors were no longer paying up for the segment.
- The rational ending: instead of a down round, Z1 merged its base into NG.Cash in February 2025 — 6M+ combined clients, ahead of Nubank for under-18 — and wound down the brand.
What can be applied
A wedge can be real and still lose: teen banking proved demand, but when Nubank and rivals added teen products, the pure-play couldn't raise — the exit was handing its base to a competitor.
Aftermath
As of February 17, 2025, Z1 no longer exists as a standalone: its customer base was integrated into NG.Cash on February 13, 2025, taking the combined platform past 6M clients and ahead of Nubank for under-18 accounts. Founder João Pedro Thompson said Z1 considered raising again in 2025 but chose the NG.Cash deal; the founders did not join NG.Cash, which continued as the main brand with an AI WhatsApp assistant, a prepaid card and savings at 100% of the CDI. Users migrated without extra costs; Z1's ~$22M of venture funding ended in absorption rather than a shutdown or a sale.
Sources
- Homebrew leads Z1's effort to bring digital banking to Latin America's teens
- Kaszek leads Z1's latest round as it develops its bank app aimed at LatAm teens
- NG.Cash e Z1: união de fintechs soma mais de 6 milhões de clientes
- NG.Cash, Fintech que ofrece cuentas digitales a los jóvenes en Latam, adquiere la base de clientes del neobanco Z1
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