Warren Buffett invests half a billion dollars in Brazilian digital bank



The deal to pour half a billion USD into Nubank shows that billionaire Warren Buffett is increasingly open to the Fintech world.

The fintech has raised a total of $2 billion since since its establishment.

Nu Pagamentos SA, the company that owns Nubank - Brazil's largest digital bank and Latin America's largest Fintech - has announced the successful sale of $500 million worth of stocks to Warren Buffett's Berkshire Hathaway.

Warren Buffett invests half a billion dollars in Brazilian digital bank

Warren Buffett invests half a billion dollars in Nubank/ Ph: Nubank

 Berkshire Hathaway's $500 million investment accounted for most of Nubank's latest Series G funding round totaling $750 million, bringing the company's valuation from $25 billion to $30 billion, behind Brazil's leading bank Banco Bradesco with a market value of $40.9 billion. This fintech has raised a total of $2 billion since its inception.

 Nubank is headquartered in São Paulo (Brazil), founded by David Vélez in 2013 with two other co-founders, Cristina Junqueira and Edward Wible.  The company is providing services such as credit cards, consumer loans, payments, life insurance and investment products to 40 million users in Brazil, Mexico and Colombia.

Billionaire Warren Buffett is no stranger to investing in financial companies.  Traditional bank and insurance company stocks make up a large part of Berkshire's portfolio.  However, he sold nearly all of his stake in Wells Fargo at the end of the first quarter and increasingly sympathetic to digital finance, although still not in favor of cryptocurrencies.

 Berkshire has invested in Brazilian Fintech before.  The company spent $340 million buying 11% of StoneCo when the digital payments company went public in 2018. Having cut its holdings by 25%, Berkshire still has $655 million in StoneCo stock as of March 31.

 This Nubank bet also shows that billionaire Warren Buffett is increasingly open to technology investments.  Despite his aversion to tech startups that lost out on IPOs, Berkshire invested $570 million in cloud data platform Snowflake when it went public last fall.

 On Nubank's side, the new capital will be used to grow the company's product portfolio, including transaction-free credit cards, credit and investment products through Easynvest, a Fintech acquired by Nubank in 2020.

 In addition, the new capital will help Nubank promote its international expansion plans and attract global talent.  They recently hired Matt Swann, formerly a technology manager at Amazon and Booking.com, as chief technology officer, and Arturo Nuñez;  former manager at Apple and Nike to serve as chief marketing officer.

The company's CEO David Vélez said there is no intention to raise more capital and IPO in the short term because "capitalization is already very good" after this fundraising.  Nubanl's primary focus is on organic growth, but does not rule out acquisitions.

 The deal comes amid a rapidly expanding digital banking where traditional banking for decades has been concentrated in a small number of large institutions and a large portion of the population has yet to access banking services.

 Over the past few years, Brazil's central bank has sought to increase competition by supporting financial startups that are ready to serve large unbanked populations.

 In 2020, Nubank's revenue nearly doubled, to $963 million.  Like other Fintechs serving digital consumers, they benefited from the pandemic, as consumers moved from traditional banking services to financial platforms on mobile, web, even older customers.

 “In Latin American countries alone, about 50% of the population is still unbanked and the average credit card penetration rate is 21% compared to 70% in the US" - Stated CEO David Vélez, "We are at a true turning point for Nubank and am honored to welcome a world-class investor to support my journey."

Warren Buffett invests half a billion dollars in Brazilian digital bank

Your comment
*
*
*
*
 Captcha

SoftBank owner's growth-at-all-costs strategy: Long-term vision or short-sighted thinking?

Investments in a series of successful IPO startups have demonstrated the "growth at all costs" strategy of Japanese billionaire Masayoshi Son.

Investments in a series of successful IPO startups have demonstrated the "growth at all costs" strategy of Japanese billionaire Masayoshi Son.

Read more

Louis Vuitton owner surpassed Jeff Bezos as the world's richest man

Jeff Bezos lost the world's richest title but not to Elon Musk. According to Forbes, French luxury goods magnate Bernard Arnault became the richest person in the world according to real-time billionaire rankings data on Monday morning. At the time, Mr. Arnault owns a fortune of 186.3 billion USD, $300 million more than Jeff Bezos.  The third richest billionaire is Elon Musk with $147.3 billion.

Jeff Bezos lost the world's richest title but not to Elon Musk. According to Forbes, French luxury goods magnate Bernard Arnault became the richest person in the world according to real-time billionaire rankings data on Monday morning. At the time, Mr. Arnault owns a fortune of 186.3 billion USD, $300 million more than Jeff Bezos.  The third richest billionaire is Elon Musk with $147.3 billion.

Read more

Warren Buffett's Berkshire Hathaway earns $17 billion in less than 3 months

Warren Buffett's Berkshire Hathaway conglomerate makes $17 billion in less than three months thanks to stocks of five companies. Only the investment in five businesses (Bank of America, American Express, Kraft Heinz, General Motors and US Bancorp) brought Berkshire $17 billion this year.

Warren Buffett's Berkshire Hathaway conglomerate makes $17 billion in less than three months thanks to stocks of five companies. Only the investment in five businesses (Bank of America, American Express, Kraft Heinz, General Motors and US Bancorp) brought Berkshire $17 billion this year.

Read more

What do the World millionaires focus to invest?

The global elite investors group in the world expect that the stock market will continue to perform well, and real estate is also a preferred investment portfolio.

The global elite investors group in the world expect that the stock market will continue to perform well, and real estate is also a preferred investment portfolio.

Read more

10 simple rules in Warren Buffett's investment philosophy

Below are 10 rules of investment philosophy that helped the legendary investment house Mr. Buffett find and achieve success.

Below are 10 rules of investment philosophy that helped the legendary investment house Mr. Buffett find and achieve success.

Read more

4 Tips to help you find ideal investment house for your startup project

Finding the ideal investment house is even more important than how much cash you can get.  Because it is not easy to find someone who believes in your vision, understands your challenges ahead, and has business acumen to help you achieve success.

Finding the ideal investment house is even more important than how much cash you can get.  Because it is not easy to find someone who believes in your vision, understands your challenges ahead, and has business acumen to help you achieve success.

Read more

Elon Musk surpasses Bill Gates on the 500 richest billionaires list

Increasing more than $100 billion a year, Elon Musk surpasses Bill Gates on the list of 500 richest billionaires.

After Elon Musk's Tesla shares rose in value again, the 49-year-old businessman's net worth surpassed Bill Gates.

Increasing more than $100 billion a year, Elon Musk surpasses Bill Gates on the list of 500 richest billionaires.

After Elon Musk's Tesla shares rose in value again, the 49-year-old businessman's net worth surpassed Bill Gates.

Read more

Elon Musk is about to overtake Bill Gates and become the second richest person in the world

Elon Musk is likely to soon replace Bill Gates as the second richest billionaire in the world.

Elon Musk is likely to soon replace Bill Gates as the second richest billionaire in the world.

Read more

Elon Musk is about to become the 3rd richest person in the world

Elon Musk officially usurped Mark Zuckerberg's 3rd richest person in the world when Tesla joined S&P.

Elon Musk officially usurped Mark Zuckerberg's 3rd richest person in the world when Tesla joined S&P.

Read more

Copyright © Vuhes. All rights reserved. The Content may not be copied, distributed,  republished, uploaded, posted or transmitted in any way without the prior written consent of Vuhes.