NuBank one of the fastest growing digital banks in South America

By Chris Kapfer

Within six years, Nubank reached the 12 million customer mark, becoming the sixth largest financial institution in Brazil in terms of customer numbers

 

Nubank, the leader in financial services technology in Latin America, announced 26 July that it has raised $400 million in investments in its F-Series, led by US investment firm TCV and GIV Private, the Singaporean sovereign wealth fund.

Tencent, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital and Thrive Capital have participated in previous contributions. The last funding round was in October 2018, raising $180 million led by Tencent which acquired a 5% stake in the company.

With this new and to date, the largest injection of funds, Nubank has accumulated $820 million raised in seven rounds of investment since its founding in 2013. Nubank is reportedly valued at $10 billion, making it Latin America’s most valuable private tech company.

In 2014, the company launched its first product, a non-annual credit card that is entirely managed by a mobile app and has been requested by over 30 million people. Three years later, Nubank also launched its benefits program, Nubank Rewards and NuConta, a digital account. This year, the company began testing its personal lending service.

Within six years, Nubank reached the 12 million customer mark, becoming the sixth largest financial institution in Brazil in terms of customer numbers. Nubank took the first steps in its international expansion by opening offices in Mexico and Argentina, countries that present challenges similar to those encountered in Brazil and is preparing to start operations and serve customers in both countries over the coming months. It currently has over 1,700 employees in Brazil, Germany, Argentina and Mexico.

Nubank began offering debit and withdrawal functions to NuConta in late 2018, consolidating its digital account as a complete alternative to commercial banks propositions. Today, more than eight million Brazilians are already NuConta customers up from two and a half million in September 2018. In comparison, Brazil’s largest banking group, Bradesco, grew its digital profile from 14.5 million digital users to 16.4 million registered digital users from June 2018 to June 2019, an average growth of 158,300 digital users per month.

While it is challenging the customer mandate of the largest financial group in Brazil, Nubank has already overtaken some of the fastest growing digital banks in Europe and Asia (excluding China). N26 only had 3.5 million digital European users as of June 2019, growing by 188,000 digital users per month between July 2018 and February 2019. In Asia, KakaoBank in Korea grew from 4.9 million users from December 2017 to 8.5 million in February 2019 with an average monthly growth of 257,000.

After completing the process to obtain its license as a financial institution, the company launched a personal loan service in early 2019, which is now available to over 500,000 customers. Nubank currently reaches 100% of the 5,570 Brazilian municipalities, a milestone in a country where only 60% of cities have bank branches.

“We remain firm in our mission to combat complexity and give people back control of their finances. While technological change has been transformative for most industries around the world, most banked consumers continue to pay absurd interest rates and fees to receive bad financial services in return,” says David Vélez, founder and CEO of Nubank.



 

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