Selling nearly 290 million shares priced at $9 in its initial public offering on the New York Stock Exchange this week, Brazilian digital bank Nubank has raised $2.6 billion, reaching a market value of $41 billion. An alumni of Finovate’s developer’s conference FinDEVr in 2016, Nubank is now the most valuable financial institution in Latin America in addition to being the world’s biggest digital bank. CEO David Vélez, who co-founded the company in 2013 with an initial investment of $2 million from Sequoia Capital and Kaszek Ventures, now owns a stake in the company worth $8.9 billion at the IPO price.
“We don’t think the banking branch will survive the way it is,” Vélez said to CNBC this week. “It is too costly to serve the majority of users, especially in emerging markets where you have a very high cost of operations, so a lot of that physical infrastructure will probably disappear.” Vélez predicted that most financial services providers will transition into digital entities in the next five to ten years because of this, leading to an increased focus on customer service as well as lower costs and interest rates.
With more than 48 million customers in Brazil, Mexico, and Colombia, and onboarding more than two million new customers a month on average, Nubank offers financial products for spending, savings, investments, loans, and insurance. The company claims to have provided more than five million people with their first credit card or bank account as of September 30, and to have saved its customers more than $4 billion (R$27 billion) in bank fees and more than 113 million hours of waiting time since inception.
Vélez said that the capital from the IPO will help fuel Nubank’s expansion in Mexico and Colombia, en route to becoming a truly pan-Latin American banking services provider. “There is a lot of opportunity to build the next generation of financial services, so we will continue to invest and grow for a very long time,” Vélez said an interview with the Financial Times.
This fall, Nubank acquired AI-powered assistant company Olivia, announced partnerships with a number of retailers to add a digital commerce section to its app in November, and purchased e-commerce payments company Spin Pay.
FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!
Here is our look at fintech innovation around the world.
Latin America and the Caribbean
- Mexican spend management platform Clara raised $70 million in new funding to earn unicorn status and announced its launch in Brazil.
- Visa announced an investment in Mexico-based open finance platform Belvo.
- Latin American fintech infrastructure company Dock completed its acquisition of Mexican card processing solution provider Cacao.
Asia-Pacific
- Diebold Nixdorf inked an agreement with Cambodia retail bank Acleda Bank.
- Malaysian digital asset exchange Luno onboarded more than 600,000 customers by the end of November.
- Low code API lifecycle management platform Apiwiz partnered with Philippines-based neobank Tonik.
Sub-Saharan Africa
- CinetPay, a digital finance platform serving merchants in French-speaking Africa secured $2.4 million in seed funding from 4DX Ventures and Flutterwave.
- Online fraud prevention company SEON inked an agreement with a pair of African neobanks, Carbon and FairMoney.
- South African device identity and authentication solutions provider Entersekt announced a “significant investment” from U.S. private equity firm Accel-KKR.
Central and Eastern Europe
- VTB has become the first Russian bank to launch a video banking service.
- German biometrics and digital identity verification company Passbase secured $10 million in Series A funding, as well as another $3.5 million in seed-2 investment.
- Moss, a Berlin-based payment and credit card platform, entered the Dutch market this week.
Middle East and Northern Africa
- Israel-based fintech Tipalti earned a $8+ billion valuation after locking in an investment of $270 million.
- Mastercard partnered with Jordan Kuwait Bank (JKB) to offer a biometric card in Jordan.
- Egyptian fintech Sympl raised $6 million in seed funding for its “Save Now Pay Later” offering.
Central and Southern Asia
- India’s Bank of Maharashtra collaborated with NPCI to launch its first credit card on RuPay’s card payment network.
- Pakistan’s largest bank, HBL, teamed up with Telenor Pakistan to drive greater financial inclusion.
- Reserve Bank of India to introduce a UPI on-device digital wallet that can be used off-line.
Photo by Cassiano Psomas from Pexels