Brazil‘s Nubank, Latin America’s most valuable fintech, is fueling its expansion in Mexico and Colombia with the investment of a $650 million line of credit.
The new funds are a three-year credit line in Mexican and Colombian pesos, financed by Morgan Stanley, Citigroup, Goldman Sachs, and HSBC, institutions that were underwriters of Nubank’s initial public offering (IPO) in December 2021.
Backed by Warren Buffett‘s Berkshire Hathaway, Nubank said the funding will go towards technology and product development, customer-base growth and hiring.
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While the majority of Nubank‘s products are developed and designed in-house, the company has recently looked into partnerships, said Nubank Chief Executive David Velez, citing its in-app marketplace in Brazil where customers can shop at retailers, and its insurance products in alliance with provider Chubb. “We are constantly evaluating possibilities to broaden our product offering,” Velez told.
Nubank offers credit cards in both Mexico and Colombia and operates under the name “Nu”. “Our priority is to keep developing this product to expand our customer base and launch more features,” he added.
By the end of 2021, the company already had 1.4 million customers in Mexico, representing a 1,243% growth year over year, and became one of the largest credit card issuers in the country. Velez previously told that Nubank is preparing to launch checking accounts in Mexico this year, after it received regulatory approval for its acquisition of local lender Akala.
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In Colombia, with only 11 months since the first card was delivered, Nu already had 114,000 customers, which represents a growth of almost 3x in the final quarter of the year. In the country, Nu is working on the construction of an engineering, product and data science center that is developing the next generation of financial services in the country.
Nubank’s presence in Brazil, where it offers clients services including credit cards, savings accounts, investments, insurance and personal loans, gives an “interesting idea” of where the firm is headed in Mexico and Colombia in the next five to 10 years, Velez said without offering more details.
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Founded in 2013 to offer consumers a no-fee credit card, Nubank became Latin America‘s most valuable listed bank, at $41.5 billion, ahead of Brazil‘s Itau Unibanco Holding.
In the last quarter, Nu holding (that includes Nubank in Brazil, as well as Nu México and Nu Colombia), added 5.8 million customers, reaching a total of 53.9 million customers in Brazil, Mexico, and Colombia – of these, 41.1 million are considered to be monthly active customers.