FinTech: Brazilian Fintech Nubank Pulls In $400M At Massive $25B Valuation
The LatAm focused challenger bank has raised a total of $1.2 billion to date.
Nubank, the Brazilian fintech bank that promised to serve the country’s vastly underbanked population has delivered. The bank now has 34 million customers today, and that number is more than three times its 2019 base of 12 million. After the latest G Round funding of $400 million, Nubank is valued at a solid $25 billion. (FinTech)
Investors in the G Round include Singapore’s GIC, Whale Rock, Invesco, Tencent, Dragoneer, Ribbit Capital, and Sequoia.
Nubank is now one of the five most valuable financial institutions in Latin America. In July 2019 it raised $400 million and announced that it had doubled its customer base to over 12 million.
Now that customers have tripled, it’s no surprise that its valuation too has vaulted from $10 billion to $25 billion. It is now also the largest challenger bank in the world in terms of the number of customers and app downloads, according to TechCrunch.
Over the last two years, it also expanded its LatAm footprint, launched a slew of new products, and acquired three businesses.
Use of funds
Nubank plans to use the latest money to fuel its expansion in Mexico and Colombia. It is already cash-flow positive, incurs zero customer acquisition costs, and has no physical branches.
The bank plows savings in marketing costs into higher salaries and superior customer service. Its customer growth has been propelled mainly due to word-of-mouth.
Nubank says on its website that Brazilians pay the highest fees and interest rates in the world for the worst banking services. It decided to offer a service that is fair, simple, and transparent by using technology and design.
In a blog announcing the latest round the company said: “We started as a small startup in São Paulo, 2013, offering a credit card with no annual fee and completely controlled by the app. Following the model of success of large global technology companies, we chose to reinvest our revenues in Nubank itself and raise funds with investors to accelerate our growth. We are happy with the success of this choice.”
The bank, therefore, secured an early-mover advantage in a country ripe for banking disruption. The bank claims customers have saved over R$16bn by using its services.
Furthermore, Nubank has allowed a large number of customers to open a bank account for the first time and build up a credit record through the use of its fee-free credit cards.
Related Story: Nubank, the Brazilian Fintech, Hits a Purple Patch
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