Brazilian Fintech Nubank, announced that it has filed to go public

October 27, 2021
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This morning Brazilian neobank Nu, better known as Nubank, announced that it has filed to go public. Today its S-1 filing remains private, but the announcement of its existence implies that Nu is on track to go public soon, perhaps inside of 2021.

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The company filed with both the American Securities and Exchange Commission (SEC) and the Comissão de Valores Mobiliários (CVM) in Brazi, it saidl. Per the company’s bulletin, Nu intends to list in the United States with intent to “negotiate a program of Brazilian Depositary Receipts” in its home country.

In June, Nu raised a $750 million round led by Berkshire Hathaway at a $30 billion valuation, making it one of the most valuable unicorns in the world. Since its 2013 inception, Nu has raised $2.3 billion in capital, with investors such as Sequoia Capital, Tencent, Ribbit Capital, Kaszek, QED Investors and others.

At that time, Nu had 40 million users across Brazil, Mexico and Colombia. Its sheer number of users makes Nubank the largest digital bank in the world in terms of customers. Notably, it had 25 million users in June of 2020 and 6 million in 2018 — so its pace of growth and acquiring customers is quite remarkable.

Earlier this month, Business Insider reported that Nubank had turned its first-ever half-year profit in its home market.

Colombian businessman and former Sequoia VC David Velez founded Nu with the mission of fixing the dated Brazilian banking system. The company set out to help serve the underbanked and unbanked in the country with a range of products and services. It is estimated that tens of millions remain unbanked in Brazil, so the opportunity for the neobank remains quite large, especially considering the increased use of smartphones and the move to digital overall.

The Neobanking boom’s leading candidates

News of Nu’s private IPO filing come on the heels of news that American neobank Chime is also targeting a public offering. Per Forbes reporting, Chime could seek a valuation of between $35 to $45 billion, and could go public next March.

A Q4 2021 Nu IPO followed by a Q1 2022 IPO would shift a simply huge fraction of global neobank equity from the private markets into the public. But the two companies’ respective transitions will bring risk along with potentially lucrative returns for their backers. If Nu or Chime struggle when they do list, or price at a valuation that underperforms expectations, we could see the value of yet-private neobanks slip.

Recall that while we are certain that private-market investors are smitten with the neobanking startup and unicorn cohort, we have yet to see how the public markets may react to the most valuable companies in the group. Though the fact that Chime was EBITDA positive in late 2020 implies that we’re not going to see every neobank file with yawning losses on its books.

What we’ll see when we get a public S-1 filing from Nu is less clear, though we are modestly bursting with curiosity. Just how strong of a business set has the neobanking industry managed to concoct with ample capital and plenty of time? We’ll know soon enough.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

The company filed with both the American Securities and Exchange Commission (SEC) and the Comissão de Valores Mobiliários (CVM) in Brazi, it saidl. Per the company’s bulletin, Nu intends to list in the United States with intent to “negotiate a program of Brazilian Depositary Receipts” in its home country.

In June, Nu raised a $750 million round led by Berkshire Hathaway at a $30 billion valuation, making it one of the most valuable unicorns in the world. Since its 2013 inception, Nu has raised $2.3 billion in capital, with investors such as Sequoia Capital, Tencent, Ribbit Capital, Kaszek, QED Investors and others.

At that time, Nu had 40 million users across Brazil, Mexico and Colombia. Its sheer number of users makes Nubank the largest digital bank in the world in terms of customers. Notably, it had 25 million users in June of 2020 and 6 million in 2018 — so its pace of growth and acquiring customers is quite remarkable.

Earlier this month, Business Insider reported that Nubank had turned its first-ever half-year profit in its home market.

Colombian businessman and former Sequoia VC David Velez founded Nu with the mission of fixing the dated Brazilian banking system. The company set out to help serve the underbanked and unbanked in the country with a range of products and services. It is estimated that tens of millions remain unbanked in Brazil, so the opportunity for the neobank remains quite large, especially considering the increased use of smartphones and the move to digital overall.

The Neobanking boom’s leading candidates

News of Nu’s private IPO filing come on the heels of news that American neobank Chime is also targeting a public offering. Per Forbes reporting, Chime could seek a valuation of between $35 to $45 billion, and could go public next March.

A Q4 2021 Nu IPO followed by a Q1 2022 IPO would shift a simply huge fraction of global neobank equity from the private markets into the public. But the two companies’ respective transitions will bring risk along with potentially lucrative returns for their backers. If Nu or Chime struggle when they do list, or price at a valuation that underperforms expectations, we could see the value of yet-private neobanks slip.

Recall that while we are certain that private-market investors are smitten with the neobanking startup and unicorn cohort, we have yet to see how the public markets may react to the most valuable companies in the group. Though the fact that Chime was EBITDA positive in late 2020 implies that we’re not going to see every neobank file with yawning losses on its books.

What we’ll see when we get a public S-1 filing from Nu is less clear, though we are modestly bursting with curiosity. Just how strong of a business set has the neobanking industry managed to concoct with ample capital and plenty of time? We’ll know soon enough.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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