Warren Buffett Backed Brazilian Digital Bank Planning $2 Billion IPO

Divya  |  Aug 16, 2021

Nubank, a major digital banking institution, and fintech firm in Brazil backed by Warren Buffett is planning a $2 billion initial public offering (IPO).  The bank is a crypto-friendly establishment that provides a Bitcoin exchange-traded fund (ETF) called QBTC11, which happens to be the first crypto instrument approved by Brazil’s Securities and Exchange Commission (CVM). 

Warren Buffet Backed Nubank to Rollout  $2 Billion IPO by Year-End

A recent Bloomberg report revealed that Nubank could list its IPO on the Nasdaq exchange by the end of this year. The digital bank -- which has over 40 million customers in  Latin America -- received $750 million from Warren Buffett’s Berkshire Hathway in June.

According to sources familiar with the matter, Nubank is seeking a valuation of $40 billion. In 2019, private fundraising put the valuation of Nubank at $10.4 billion. That estimate inflated to $30 billion in June after Berkshire Hathaway bought a stake in the firm. 

If Nubank reaches its target valuation, it’ll become Latin America’s second most valuable financial institution after Brazil’s Itau Unibanco Holding SA, which has a market capitalization of $55 billion. At present, the second spot is held by financial services company Banco Bradesco SA, estimated to be worth $41 billion.

Multinational banking institutions such as Morgan Stanley, Goldman Sachs, Citigroup, and UBS Group AG are said to be participating in the planned IPO sales.

In addition to Berkshire Hathaway, Nubank is backed by Advent International and Tencent Holdings Ltd. It was founded in 2013 by Cristina Junqueira, who joined private equity veteran David Velez and Edward Wible in kickstarting a zero-paperwork, no-fee credit card service, which has evolved into a tech unicorn in Brazil’s growing asset management market.

Nubank’s Expansion Plans and Other Interests

After netting a massive investment from Berkshire Hathway, Nubank declared that it was looking to expand in Mexico and Columbia, and hire more employees for a new set of products and services. 

The firm has also shown interest in offshore ventures and has recently led a $45 million funding round for Indian neobank Jupiter. 

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