Fintech darling Nubank raises blockbuster $400M Series G at $25B valuation – TechCrunch

While the epidemic has left some startups for cash, aptly named Brazilian Nobank Nubank Is swimming in it This morning, the company announced that it had raised $ 400 million in the Series G round, raising their total funding to $ 1.2 billion. But even more notable, in addition to their new $ 25 billion valuation (over $ 10 billion in 2019), they have a customer base of 34 million users, which they have built since the launch of Fintech in 2013.

“We have gone from 12 million customers in 2019, based only on word of mouth,” said David Velez, the company’s co-founder and CEO. As of September last year, the company was adding 41,000 new customers per day. NuBank prides itself on being a $ 0 customer acquisition cost. Velez said the startup spends money on “great pay” and better customer service, which in turn creates “hardcore” customers who share their love for the brand with others.

The new valuation puts NewBank as the fourth most valuable financial institution in Latin America and the largest digital bank in the world with the number of customers and app downloads.

The round was led by both private and public investors including Singapore’s GIC, Whale Rock and Invesco. Existing investors Tencent, Dragonair, Rebbit Capital and Sequia also participated in the round. Velez is a former Sequoia partner and originally from Colombia, although he attended Stanford University and worked in the US for many years.

NuBank, based in Sao Paulo – the financial capital of Latin America and home to 12.8 million people – has expanded to Colombia and Mexico and plans to use the new funding to continue its operations in those products, While its product offering continues. Brazil

Started as a credit card company now functions as a full-service bank, lending cumbersome bank branches, which in a way enabled the company to allocate its funds primarily towards growth.

Speaking to Brazil’s notorious bureaucracy and terrible banking experience, Velez said, “People were treated unfairly and paid high fees.” Historically, to pay your monthly bills in Brazil, you had to go to a bank branch and wait in line – often outside in the heat – until it was your turn. Lines draped around the block like the Apple Store upon the release of the latest iPhone.

“It’s like they’re opening an account for you and then charging you a 450% interest rate per year,” Velez said. “Our condition was that people would actually behave like humans,” he said.

In 1994, when the Brazilian real currency was introduced, it was pegged at 1: 1 with the US dollar. However, in recent years, with the country’s largest corruption scandal in history, in which three consecutive presidents have been jailed, impeached, and discriminated against, the economy has declined. And COVID-19 certainly hasn’t helped. The exchange rate is now 1 USD to 5.40 BRL. With low exchange rates in Brazil, Colombia and Mexico, a $ 400 million USD investment creates a massive runway, especially since Nubank’s Brazil operations since 2018 have been cash-flow positive.

The company is known for reaching unaffiliated populations in Brazil, particularly those who were not in a financial position to obtain only credit cards. Traditional banks exist in about 80% of Brazilian municipalities, but given that Nubank’s app-based product is location-agnostic, it is able to reach 100% of municipalities, the company said. In addition, it is helping Brazilians build credit. Its Barney-Purple credit card starts at a monthly limit of $ 50 per month (about $ 10 USD). If a customer makes timely payments for the first month, their credit continues to increase in the following months.

In between its products, Nubank also offers a debit card and savings account, and when it does not have its own branches, money can be withdrawn from networked ATMs, as is common in the US

“Nubank was born out of the belief that people were entitled to better, more transparent and humane financial services that would allow them to be in control of their money and their future. We started seven years ago in Brazil, one of the most concentrated banking sectors in the world and we were able to free up millions of bureaucracy and pain. Through technology and human customer service, we were able to positively impact their daily lives, ”said Velez.