Nubank

Nubank is a Brazilian fintech company founded in 2013 that provides digital financial services such as deposit creation, money transfers, cash withdrawals and lending to individuals through a mobile application. The startup issues cards for free and earns on fees for transactions, currency exchange and other services.

History

2022: Raising $1 Billion from Warren Buffett's Berkshire Hathaway

In mid-February 2022, it became known that Berkshire HathawayWarren Buffett bought Class A shares of the Brazilian bank Nubank worth $1 billion. Increasing investments in crypto assets, the billionaire abandoned a number of traditional financial investments. In particular, the corporation sold Visa and Mastercard papers worth more than $3 billion.

Berkshire Hathaway has increased its stake in Nubank, Brazil's largest fintech bank, which is also popular among Bitcoin investors in the country. Warren Buffett is known for his cautious approach to investing, especially in the hottest sectors of the market, such as fintech. Buffett also downplayed the importance of decentralized financial decisions such as Bitcoin, deriding it as an asset that creates nothing.

Buffett invested $1 billion in Brazilian digital bank Nubank

Buffett's additional investments in Nubank indicate his recognition of the main topic of the fintech sector - the digitization of financial services, as well as his desire to cooperate with companies operating in the cryptocurrency sector. In particular, the Easynvest trading platform, which Nubank acquired in September 2020, has been actively offering the QBTC11 Bitcoin Exchange Fund since June 2021. Thus, Nubank, which continues to participate in the emerging crypto sector through Easynvest, can leverage additional revenue opportunities to benefit its top investor Warren Buffett.

Even indirect support will certainly strengthen positive sentiments that can push more investors into this space. Investing in Nubank can be called Buffett's way of supporting the fintech world without returning to his criticism of the past, "said Greg Waisman, co-founder and chief operating officer of Mercuryo's cryptocurrency service.

In Latin America, where a large part of the population lacks a traditional banking and financial system, there is great competition between promising digital banks, so Nubank seeks to master the huge potential consumer market of people dissatisfied with the existing system.^[1]

2021

Exit to the exchange

On December 9, 2021, Nubank digital bank shares rose 25% during its debut on the stock exchange, which provided the company with a market capitalization of almost $52 billion and made it the third largest in Brazil. The fintech giant is second only to the raw materials giants Petrobras and Vale.

On December 8, 2021, Nubank estimated its initial public offering at the top of the range, which it had reduced earlier due to concerns about a global drop in shares of technology companies to raise about $2.6 billion. According to some sources, the proposal was exceeded eight times.

Brazilian digital bank entered the exchange with a capitalization of $52 billion

On November 9, the company's shares on the New York Stock Exchange opened at $11.25 per share, which is 25% higher than the initial public offering price of $9 apiece. At the end of trading on the same day, the share price fell to $10.33 per share. After the debut, the market value of the company was estimated at $52 billion.

Nubank's IPO makes it the largest monetary asset in Latin America, ahead of Itau Unibanco Holding SA with a market value of $38 billion.

Nubank founder and chief executive officer David Veles said the company will continue to focus on three markets - Brazil, Mexico and Colombia.

{{quote 'Most of the capital we raise during this IPO is for Colombia and Mexico. And therefore, we will continue to invest in this growth opportunity, "said Veles.

Nubank's investors are Sequoia Capital, Tiger Global Management and SoftBank Latin America.

Nubank is one of those companies whose shares we may want to keep for a very long time, "says Douglas Leone, Sequoia's global managing partner, who is also a member of the fintech bank's board of directors. - At the moment, the focus is on ensuring that we (Nubank) do the best work for customers in Latin America.[2]

Raising $750 million, estimated at $30 billion

In early June, a digital bank with investments by Yuri Milner Nubank attracted $750 million in investments, the company's valuation was $30 billion. The investment round of the G series was led by the Berkshire Hathaway fund, which invested $500 million, as well as some other investors.

The funds raised will be used to develop Nubank's business, including to hire more people. Nubank is the largest digital bank in the world by the number of customers - 40 million (by June 2021), but 6 months ago the number of customers was 34 million. Nubank began as a technology company in Brazil, offering only free credit cards with a credit line worth 50 reais (about $10). By June 2021, Nubank offers many financial products, including a digital bank account, debit cards, insurance, P2P payments through Pix (the Brazilian equivalent of Zelle), loans, rewards, as well as an account and credit card for small business owners.

Digital Bank with investments of Yuri Milner Nubank raised $750 million and now costs $30 billion

Nubank serves non-banking or underserved Brazilian citizens - about 30% of the population. Although Brazil remains Nubank's main market, the company also offers services in Colombia and Mexico (services were launched in Mexico in 2018). The company still only offers credit cards in these countries.

The momentum we are seeing in Mexico is amazing. Our NPS index is 93, the highest in Nubank's history. In Brazil, the highest result was 88, "said Nubank founder David Veles.

We are watching the entire market go digital, in particular people who never thought they would do this, "Veles said. - Now really people from different sectors of society connect to digital banking.[3]

2019: Raising $400 million DST Global among investors

At the end of July 2019, Nubank announced a Series F venture financing round, following which the company raised $400 million. Among the investors of the Brazilian fintech startup was the DST SoundYuri Milner fund. And this is not the first time he has invested in Nubank.

The Yuri Milner Fund invested in a fintech company, which was valued at $10 billion

The investment deal was led by TCV. In addition to her, Tencent Holdings, Sequoia Capital, Dragoneer, Ribbit Capital and Thrive Capital invested in Nubank.

Taking into account the funds received, Nubank has raised a total of $820 million since its inception. During this time, the company held seven rounds of financing.

According to The Wall Street Journal, investors valued Nubank at more than $10 billion. The company itself does not disclose the estimated value and only says that it has more than 12 million customers, which is the sixth indicator among Brazilian financial organizations.

Nubank founder and CEO David Velez said in a conversation with Reuters that the company will use the investments raised to accelerate business growth in Brazil and enter new markets in Latin America. Earlier in 2019, Nubank began operations in Mexico and Argentina.

Over the 5 years of its activity, Nubank managed to reach 100% of 5570 Brazilian municipalities, which is an important milestone for the country, where only 60% of cities have bank branches (at the end of July 2019).

By the end of July 2019, Nubank has more than 1,700 employees working in Brazil, Germany, Argentina and Mexico.^[4]

Notes