Nubank’s Massive New Round, 5G Auction Rules Released, Open Banking Kicks Off
Welcome to this week’s Brazil tech and innovation round-up, with a selection of three key developments from the ecossystem in Latin America’s largest economy. First up, the main story from the week that was: the announcement of the latest funding round by fintech giant Nubank, which placed it among the most valuable financial institutions in Latin America.
Also, Jair Bolsonaro’s government releases rules for the upcoming 5G auction and, looking ahead, Brazil readies the introduction of open banking.
New round places Nubank among most valuable financial firms in LatAm
Brazil-headquartered fintech Nubank is one of Latin America’s most valuable financial firms following the announcement of a $400 million Series G round this Thursday (27). The investment was led by Singapore’s sovereign fund GIC, hedge fund Whale Rock and global asset manager Invesco. The new backers were joined by funds that have supported Nubank’s previous rounds Tencent, Dragoneer, Ribbit Capital and Sequoia.
The digital bank doesn’t confirm its exact market value, but the new round brings the figure to an estimated $25 billion. This places Nubank among the five most valuable financial services firms in Latin America, ahead of institutions such as the oldest Brazilian bank, partly state-owned Banco do Brasil.
The fintech’s fresh funding will go towards the its international expansion, particularly in Mexico and Colombia. The company noted that in Mexico, where the company’s international expansion began in March 2019, it is already one of the six main credit card issuers, with over 1 million requests for the firm’s no-fee purple card.
In Colombia, Nubank’s chief executive David Vélez home country, the company has attracted the interest of 200,000 clients, four months after launching its local operations in September 2020, the fintech said. The company also has operations in Argentina, launched in October 2019.
Since its previous Series F $400 million round in July 2019 (which valued the company at $10 billion) Nubank expanded its customer base from 12 to 34 million clients across the Latin markets where it operates. With the new investment, the fintech has attracted $1.2 billion in funding throughout its inception in 2013.
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“It is still day one.” This is a phrase Vélez often cites when talking about the growth trajectory of his company since its inception in São Paulo in 2013, and future prospects ahead.
The fintech’s current product portfolio that includes a credit card, a digital bank account, insurance and investments, bolstered by the acquisition of investment firm Easynvest in 2020. Vélez said diversification will be core to the strategy in 2021 for the company, which also has an eye on possibilities beyond its current area of focus:
“Although our focus is on financial services, we see no limits to the ways in which Nubank can tackle complexity and have a transformative impact on people’s lives. I usually say that we are still on ‘day one’. The opportunities ahead are endless”, Vélez said on future prospects for the company, whose leaders have talked about potential of partnerships with marketplace players, rather than building its own ecosystem.
Brazilian government sets out rules ahead of 5G auction
Yesterday (29), the Brazilian government released a decree setting out a series of rules ahead of the country’s upcoming 5G auction. Among the determinations is the creation of a private, high security and encrypted network for strategic communication between federal government agencies.
According to the Ministry of Communications, “the companies that will supply equipment for this network must have a standard of transparency and corporate governance compatible with those required in the Brazilian stock market.”
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