- Latin America has been experiencing a boom in venture capital deals after it spawned several high-return startups;
- Sequoia has made just half a dozen investments in Latin America, including Nubank and delivery app Rappi.
Nubank and Sequoia Capital have partnered up to invest in Latin American startups, two sources familiar with the matter said on Monday. The Brazilian neobank, which has had Sequoia as a shareholder since 2013, has decided to invest alongside the venture capital firm in startups in sectors that may go beyond financial services, such as e-commerce and enterprise software, the sources said.
In the prospectus for its initial public offering of shares released on Monday, Nubank said it is eyeing investments in sectors such as healthcare, e-commerce, and telecommunications, but did not disclose the partnership with Sequoia.
Nubank, which is seeking a valuation of more than $50 billion, also said in the document that it intends to challenge existing business models in these sectors.
Latin America has been experiencing a boom in venture capital deals after it created several high-return startups. Funding rounds soared to $14.8 billion in the first nine months of this year, nearly tripling from 2020, according to CB Insights.
Sequoia has made only a half-dozen investments in Latin America, including Nubank and delivery app Rappi, but plans to increase placements in the region, Sonya Huang, a partner at the venture capital firm, told Reuters in a recent interview.
For Sequoia, the deal adds a partner with a presence in four countries in the region – Brazil, Mexico, Argentina, and Colombia – and with experience in accelerating business, the sources said. For Nubank, the deal adds a partner with global experience in investing in startups.
Paulo Barbosa, former vice-chairman of Singapore’s GIC, will lead Nubank‘s venture capital entry, and Sequoia partners Huang and Stephanie Zhan will be responsible for its efforts in the region, the sources said.
The sources did not disclose the amount both firms plan to invest in the region or how they will split funding rounds. Under the terms of the deal, the two companies can also invest in startups separately.
In August, Nubank and Sequoia partnered in a $44 million funding round for Indian digital bank Jupiter, along with Matrix Partners.
One of the sources said Sequoia and Nubank have also looked at various digital banking investment opportunities in other emerging markets to jointly invest in.
Sequoia and Nubank declined to comment on the matter.
(Translated by LABS)