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Latin American Fintech Nubank Receives $500M Investment from Buffett’s Berkshire Hathaway

UTC by staff writer · 3 min read
Latin American Fintech Nubank Receives $500M Investment from Buffett’s Berkshire Hathaway
Photo: Depositphotos

The news about investing in Nubank comes as a surprise due to Warren Buffett’s known reservations against and aversion to Bitcoin and crypto in general.

American investment mogul and philanthropist Warren Buffett elevates Brazil’s fast-growing financial technology business Nubank to new levels through its largest single investment of $500 million in the company, giving the latter a $30 billion valuation. The firm has invested in Nubank’s parent company, Nu Pagamentos SA. Buffett, whose total net worth is a whopping $109.2B as of today, has acquired more than 60 companies, and continues to be counted amongst the most successful and popular investors of all time. Berkshire’s investment portfolio consists of wholly-owned entities like Duracell, Fruit of the Loom, BNSF, Helzberg Diamonds, etc.

The news comes as a surprise due to Warren Buffett’s known reservations against and aversion to Bitcoin. The investment of half a billion dollars into Nubank, which alongside Easynvest Brokerage, plans to trade in Bitcoin ETFs, hints towards Buffett’s changing mindset against the cryptocurrency.

Berkshire Hathaway is a multinational holding company run by investment guru Warren Buffet whose investment portfolio mostly consists of financial enterprises like the good old banks and insurance firms. Berkshire Hathaway is trying to consolidate its share in the Brazilian financial technology market as it has also, in the past, invested in StoneCo, a digital payments entity in the South American country. The advent of such heavy investment conglomerates that usually invest in publicly traded companies also points towards Nubank’s preparations to get a stock market listing.

This latest funding has been part of Nubank’s Series G fundraising round, which helped the company amass a total of $1.15 billion. With this achievement, the Brazilian digital bank has managed to raise almost $2 billion since its inception in 2013. Boasting a massive customer base of 40 million members with the growth of 45000 new customers every day in the first five months of 2021, Nubank has been making big strides in Brazil’s overall banking industry. Right from offering traditional banking services like savings accounts, issuing credit cards, the digital bank also offers insurance services, personal loans, financial investment products, mobile payments and products for small businesses and entrepreneurs.

The company plans to use its 8th fundraising proceeds i.e. the Series G funds estimated at $750 million into the expansion of digital services in the existing market that they operate in, enlargement of their product portfolio and giving a makeover to their international talent acquisition model in addition to hiring more personnel. Brazil’s largely untapped market has been at the forefront of Nubank’s market model.

According to Nubank’s founder-CEO David Vélez, Brazil has a potential customer base of almost 60 million people in the country i.e. Brazil and 250 million across Latin America with no direct access to any kind of financial facilities. Going digital owing to constraints on mobility has become a necessity in post-Covid world and this change in addition to the much attractive target market has made these large investments in the region possible.

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