Nubank Expected to Seek IPO Valuation of $55B

UTC by Babafemi Adebajo · 2 min read
Nubank Expected to Seek IPO Valuation of $55B
Photo: Depositphotos

A valuation of over $55 billion will make Nubank bigger than any other bank or fintech in Brazil.

Ahead of its planned IPO in the United States, Brazilian fintech, Nubank, is seeking a market valuation of more than $55 billion. The company raised a $500 million investment from Berkshire Hathaway in June. Consequently, it achieved a market valuation of more than $30 billion.

An IPO valuation of more than $55 billion will effectively make Nubank bigger than any other bank or fintech in Brazil. It would also pitch the company behind the largest fintech companies globally. Nubank has amassed more than 40 million customers in Latin America since its establishment in 2013.

The company forayed into Mexico and Colombia areas often neglected by traditional banks. The growing customer base in those areas proves the strategy as solid. Of course, its largest customer base is still in Brazil. However, gaining 1.5 million customers in Mexico, and signing up 300,000 Colombians to a waiting list in just over a year is no mean feat.

The Journey to Nubank IPO Valuation

When Nubank was launched, it had only one product offering – a credit card. Customers could pick up a credit card even before making any deposits to fund their debit card. This strategy has been repeated in new markets and continues to yield results. In addition, the bank now offers other services including personal lending, life insurance, instant payment services, investment products, and products for micro-entrepreneurs.

Interestingly, the bank reported a loss at the end of 2020. It had a loss of 230 million reals and a loan ledger of about 18 billion reals. In comparison, Brazil’s biggest bank, Itau Unibanco Holding, reported a profit of 18.5 billion while its loan book had 870 billion reals.

However, Nuban has shown great potential for growth in 2021. Already, they’ve successfully distributed more debit cards than Itau. Their regional expansion into Mexico and Colombia is also ongoing. The company also posted a profit of 6.8 million reals in Q1 of 2021.

Reuters reports that Nu Pagamentos as Nubank was formerly called has retained the services of the investment banking units of Morgan Stanley, Goldman Sachs, and Citigroup to help drive its IPO in the United States. Reports suggest that the IPO will hold either in late 2021 or early 2022.

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