Nubank debuts on Wall Street as the largest "fintech" in Latin America

The Brazilian digital bank Nubank starred this Thursday in one of the most outstanding IPOs of the year on Wall Street, where it reached a capitalization of 48,000 million dollars and positioned itself as the most valuable financial institution in Latin America.

Nubank began trading on the New York Stock Exchange at 1:00 p.m. local time (5:00 p.m. GMT) with a starting price of $11.25, 25% above the $9 set the night before and which represented the most optimistic extreme. from a fork that had previously been lowered.

A week before the debut, when fears of the omicron variant of the coronavirus hit markets, the company cut its projections of reaching a size of 50,000 million dollars, but some analysts suggested that it may be due to low demand.

Nothing could be further from the truth: this "fintech" created less than a decade ago in Brazil as an alternative to its concentrated banking ecosystem soared today on the stock market, surpassing the largest entity in the region, Itaú, and number two, Bradesco. .

Despite moderating its advance and closing at 10.33 dollars per share, it also positioned itself as the third largest Brazilian listed company in the US, behind the oil company Petrobras and on the heels of the mining company Vale.

Its CEO, Colombian businessman David Vélez, who gave the traditional opening bell on Wall Street, told Efe that Nubank's growth has been "incredibly fast" and its trajectory "gratifying."

To do this, he has had the backing of large funds, including his former employer, Sequoia, and Warren Buffett's Berkshire Hathaway conglomerate.

With 48 million customers spread across Brazil, Colombia and Mexico, the company seeks to "give alternatives to consumers and bank the entire population of Latin America, with some 200 million people who do not have access to financial services," he said.

"IMPOSSIBLE TO GO BACK TO THE PAST"

Vélez highlighted the positive impact of the pandemic on the business, which caused "segments closely linked to bank agencies" or physical branches, such as people over 60 years of age, to open digital accounts and, he assures, "they no longer see themselves returning" .

“It is almost impossible to return to the past. That change in behavior that the pandemic perhaps forced is already sustainable and becomes something that, regardless of social status or age, the client embraces, ”he explained.

As a result of its larger clientele, Nubank has increased its income to 1,000 million dollars in the first nine months of 2021, although its losses amount to 99.1 million dollars, according to the documents delivered to the regulator.

In 2020, 2019 and 2018 it also had losses, of 171.5 million, 92.5 million and 28.6 million, respectively.

In this regard, Vélez pointed out that the company records profits in Brazil, where the operation "is profitable" and the money is being reinvested in new products and in the markets of Colombia and Mexico, to which the capital raised with the price will also be directed. In U.S.A.

After the welcome on Wall Street, Nubank debuts tomorrow on the Sao Paulo stock exchange through Brazilian deposit certificates (BDRs) in what is the spearhead of a "giant financial education program" that begins with its own clients in Brazil.

Nubank bought the EasyInvest brokerage platform last year and today presents it integrated into its mobile "app" under the name of NuInvest, where 8 million customers will receive a gift BDR, an "ambitious move" to attract Brazilians to the bag, Velez said.