Nubank IPO: Brazilian Fintech Files for Public Offering

NuBank Files for IPO: A Deep Dive

Brazilian digital bank Nu, widely recognized as Nubank, has officially announced its intention to become a publicly traded company. The company’s F-1 registration statement is currently confidential, but the declaration signals a potential public offering before the end of 2021.

Regulatory Filings and Listing Plans

Nu submitted its filings to both the United States Securities and Exchange Commission (SEC) and Brazil’s Comissão de Valores Mobiliários (CVM). The company intends to list on a U.S. stock exchange and concurrently establish a program for Brazilian Depositary Receipts within its domestic market.

Recent Funding and Valuation

In June, Nu secured $750 million in funding, spearheaded by Berkshire Hathaway, resulting in a valuation of $30 billion. This achievement positioned it as one of the world’s most highly valued private companies. Since its founding in 2013, Nu has accumulated $2.3 billion in investment capital from firms including Sequoia Capital, Tencent, Ribbit Capital, Kaszek, and QED Investors.

Rapid User Growth

As of June, Nu boasted a user base of 40 million customers across Brazil, Mexico, and Colombia. This makes Nubank the largest digital bank globally based on customer numbers. The company’s expansion has been remarkable, growing from 6 million users in 2018 to 25 million in 2020.

Recent reports indicate that Nubank achieved its first profitable half-year in its home market earlier this month.

Founding and Mission

Nu was established by Colombian entrepreneur and former Sequoia VC, David Velez, with the goal of modernizing Brazil’s traditional banking infrastructure. The company focuses on providing financial services to the underbanked and unbanked populations within the country.

A significant portion of the Brazilian population remains without access to traditional banking services, presenting a substantial opportunity for Nu, particularly with the increasing adoption of smartphones and digital technologies.

An in-depth analysis of Nu was previously published by TechCrunch in a comprehensive series.

Neobanking IPO Landscape

The announcement of Nu’s IPO filing coincides with reports that American neobank Chime is also preparing for a public offering. Forbes suggests Chime could seek a valuation between $35 and $45 billion, potentially listing in March of next year.

Potential Market Impact

If both Nu and Chime successfully complete their IPOs in Q4 2021 and Q1 2022 respectively, it will represent a significant shift of neobank equity from private to public markets. However, these transitions carry inherent risks, and the performance of these companies will influence the valuation of other private neobanks.

While private investors have shown considerable enthusiasm for neobanking ventures, the public market’s reaction remains uncertain. Chime’s achievement of EBITDA profitability in late 2020 demonstrates that not all neobanks will report substantial losses.

Anticipation for Nu’s F-1 Filing

The details contained within Nu’s public F-1 filing are eagerly awaited. The filing will reveal the strength and sustainability of the business model developed by the neobanking industry, given substantial capital and time for growth. The industry’s performance will soon be made clear.