Brazil's largest fintech Nubank to invest $135 million in Mexico

The funds will be used to hiring, technological development, and expanding the local business

David Vélez, founder and CEO of Nubank.
David Vélez, founder and CEO of Nubank. Photo: Nubank/Courtesy
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  • Nubank’s goal is to be amid the top three card issuers in Mexico this year;
  • It is the first time that Nubank raises money exclusively for Mexico.

Nubank, the largest fintech in Latin America, announced on Thursday that it will invest $135 million in its Mexican unit, Nu México, in operation for a year. This is the first time that the company raises funds exclusively for its operation in Mexico.

Mexico is a strategic market for Nubank. The Mexican population represents 20% of the whole of Latin America, but only 60% have a bank account. Also, only six banks account for 75% of the entire local market. What we have learned in this last year of operation in the country is that Mexicans want more humane, transparent, and unbureaucratic financial services, ”said David Vélez, the company’s co-founder and global CEO, in a press statement.

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Of the total amount, $70 million will be injected by Nubank into the local operation. The remaining $ 65 million will be financed by JP Morgan, Goldman Sachs, and Bank of America.

The investment marks the first anniversary of the launch of Nu México’s first product on Aztec soil: a credit card with no annual fee. To date, more than one and a half million Mexicans have signed up for a Nubank credit card, according to the company.

Nubank also said that it has achieved a satisfaction rate never seen before in the Mexican economy: while the market has an average NPS (net promoter score) of 28 points, Nu México has an NPS of 90 points.

Also, 30% of new customers arrive through invitations made by other customers. According to Nubank, in the last quarter of 2020, the flow of orders for credit cards in Mexico grew twice as much as in the previous quarter, a trend that continues to consolidate this year.

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“After one year of operation, we are already among the five largest issuers of new credit cards in the country. Our goal for 2021 is to position ourselves in the top three, ”says Emilio González, director-general of Nu México.

The funds will be allocated to three key areas: hiring people, technological development, and expanding the local business. “The great reception we have received from our customers gives us the necessary confidence that we will consolidate ourselves as the preferred institution for Mexicans,” says González.