Nubank suddenly seems poised to become SA’s most popular challenger.

The Brazilian start-up Nubank specialized in financial services completed a fund raising with Chinese giant Tencent which closed at $180 million. To carry out this transaction, Alibaba’s rival proceeded with a capital increase of $90 million within the company and the acquisition of partial holdings with Nubank current shareholders for $90 million.

This Tencent investment suddenly makes Nubank the most attractive start-up in Latin America with an estimated value of $4 billion, and Brazil’s third unicorn. This new operation, which brings the total amount of capital raised by the Brazilian startup since its creation up to an impressive to $ 700 million, is further proof of the unprecedented excitement that has been driving the Latin American ecosystem in recent weeks. In September, the Colombian unicorn Rappi, which is developing an on-demand delivery service, raised $ 200 million, while the Brazilian start-up company Yellow, which launched a free-to-use electric bike and scooter sharing service, service, completed a $ 63 million round.

 

More on the market

Founded in 2013, Nubank has made a killing by offering mobile banking solutions to one of the world’s fastest growing mobile markets, said to have 100 million smartphones in circulation. The company offers no-fee cash cards and digital payment accounts.

The São Paulo-based start-up currently has 5 million customers in Brazil but female co-founder Cristina Junqueira believes that the company will soon be able to serve tens of millions of Brazilians with adequate funding for product development. Nubank’s ambitious numbers could be prompted by their authorisation from the Central Bank of Brazil to launch instant payments, which dates back from January 2018.

 

Goals

The acquisition will likely allow Tencent to expand its influence internationally by creating an instant platform into Latin America’s economy. Tencent is actively looking for growth drivers to reduce its dependence on video games, which remains to this day the firm’s main grossing business. But this is likely to change, as Chinese regulations continue to tighten down with online gaming. Tencent’s August quarterly results, which were down for the first time in nearly 13 years, are a testimony.

That being said, the group is not the only Chinese company to be interested in Brazil. At the beginning of the year, the car-hailing startup Didi Chuxing got his hands on Brazilian counterpart 99.

In an interview with TechCrunch, Velez stressed that Nubank, which raised $150 million in a February financing round, did not need the additional capital, and instead found value in the opportunity to learn about the Chinese financial market.

Velez, who views Tencent to have “built the playbook of how to use mobile” hopes to apply lessons learnt back to the market in Brazil.

 

 

Nubank

Nubank is a Brazilian FinTech company that acts as a digital bank and credit card operator, located in São Paulo. Among the company’s products are NuConta and Nubank Mastercard, both without fees.

Nubank was founded byCristina Junqueira, David Vélez and Edward Wible in 2013. Based in Sao Paolo.

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