Brazilian Fintech, Nubank, Receives Massive Investment from Berkshire Hathaway

June 14, 2021
Makayla Santino

Brazilian digital banking fintech, Nubank, announced it received a $500 million investment from Warren Buffet’s investment company, Berkshire Hathaway. This investment is an expansion of Nubank’s $400 million Series G that was originally announced in January 2021.

Nubank came to be when Columbian businessman, David Vélez, made the decision that he would take action to recreate Brazil’s banking systems in 2013. Eight years later, Vélez’s innovation has proven to be a success with over 40 million clients across Brazil, Mexico, and Columbia. Nubank has claimed the number one spot as the biggest digital banking company in the world based on its number of customers. It had originally provided only fee-free credit cards with a credit line of 10 dollars. 

Now, it has expanded greatly and delivers a wide variety of financial services to its customers. These services include a digital bank account, a debit card, insurance, P2P payment, loans, rewards, life insurance, and accounts and credit cards for small business owners. A major portion of their customers are unbanked and underserved citizens of Brazil who make up 30 percent of the population. This strategic approach has proven to be successful and profitable due to Nubank’s large clientele base. 

On June 8th, it announced a $750 million extension to its Series G including the $500 million investment from Berkshire Hathaway as well as $250 million from Sands Capital. These investments brought Nubank’s eighth round of fundraising to a whopping $1.15 billion, boosting their total valuation to $30 billion. This fundraising of $1.15 billion is the largest round that has ever been collected by a technology company in Latin America. Just since January, Nubank’s valuation has increased by $5 billion.

Nubank’s new funding will go towards its product portfolio including its no-fee credit cards and products of Easynvest, a fintech company gained by Nubank in 2020. Additionally, these new streams of investment will boost its plans for international expansion and assist its worldwide talent acquisition strategy. Aligning with this strategy, Nubank has been on a hiring spree for the last couple of months, bringing in two new executives. Matt Swann was hired to be the new CTO with a background as a technology executive for Amazon and Booking.com. Another important hire is Arturo Nunez for the role of chief marketing officer. Nunez had previously worked as the head of marketing for Apple Latin America as well as experience with Nike and the NBA.

Though seemingly odd that Nubank does not have a head of marketing, it is a purposeful decision. Rather than spending time and money on marketing, they utilize their funds in customer service. Rather than heavily emphasizing their marketing, they simply rely on word of mouth to get their company name out there. Digital banking has become a force to be recognized with in the fintech world. It will be interesting to see how companies, such as Nubank, develop and profit over time.    

 

Sources:

https://techcrunch.com/2021/06/08/fintech-all-star-nubank-raises-a-750m-mega-round/ 

https://www.forbes.com/sites/angelicamarideoliveira/2021/06/08/warren-buffetts-berkshire-hathway-invests-500-million-in-brazilian-challenger-nubank/?sh=35d346a63717

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