Nubank announces USD 330 mln equity capitalisation

Wednesday 7 December 2022 13:27 CET | News

Nubank, a Brazil-based digital bank, has announced a USD 330 million equity capitalisation in Mexico as it pushes to expand its operations there.

The investment adds to the USD 1 billion the company has previously invested in Mexico, making it one of the largest foreign investors and one of the best capitalised financial institutions in Mexico.

Nubank also said that Mexican banking regulator Comisión Nacional Bancaria y de Valores (CNBV) approved the expansion of its product portfolio, allowing the company to kick off the roll-out of its digital savings account and debit card announced in November 2022.

In April 2022, Nubank was announcing it will invest USD 650 million line of credit to fuel its expansion in Mexico and Colombia. The funds are a three-year credit line in Mexican and Colombian pesos, financed by Morgan Stanley, Citigroup, Goldman Sachs, and HSBC, institutions that were underwriters of Nubank’s initial public offering (IPO) in December 2021.

In April 2021, the company was announcing a USD 135 million investment to expand services in Mexico. Nubank injected USD 70 million in its Mexican subsidiary and the rest was financed by J.P. Morgan Chase, Goldman Sachs, and Bank of America.

Nubank’s offerings

Founded in May 2013, Nubank already has great results for a fintech company that has less than ten years in the market. In less than a year after its launch, fintech presented its first product, the credit card with the Mastercard brand. After four years of this launch, Nubank has achieved unicorn startup status and is today one of the world’s largest digital banking platforms, serving around 54 million customers across Brazil, Mexico, and Colombia.

Nubank, a Brazil-based digital bank, announces a USD 330 million equity capitalisation in Mexico as it pushes to expand its operations there.

In October 2022, Nubank has announced the creation of Nucoin, its own cryptocurrency, expected to launch in the first half of 2023 on the Polygon blockchain network. Nucoin can be a new way to recognise customer loyalty and encourage engagement with Nubank products. Nubank’s customer loyalty rewards program, powered by Polygon, can deliver the transformative benefits of blockchain technology to its customers, whilst acknowledging the shift happening in the traditional finance space, as Polygon representatives say.

In September 2022, Nubank has joined Open Finance, a Central Bank system allowing institutions to share among themselves customers’ financial data. The feature is still in its testing phase and will be released gradually. It will soon be available to all 62.3 million customers in Brazil.

The popularity of fintech in Mexico

Mexico is one of the leading countries in Latin America to encourage the creation and adoption of digital banking and financial services. For financial institutions in Mexico, digital services like mobile apps and digital wallets are on the rise, largely thanks to changes to banking regulation and accessibility. According to the World Bank, there is a direct relationship between the increase in the use of information technologies and financial inclusion.

According to a 2021 Rapyd Research report, out of the Mexican population that already owns a bank account, 65% are willing to migrate to fully digital banks. For the significant percentage that is still unbanked, a digital account that can be accessed through mobile devices represents their first step toward financial stability.

This push for greater banking accessibility in Mexico marks a shift toward greater reliance on more inclusive financial institutions and services, such as crowdfunding institutions and electronic payment funds institutions.

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Keywords: digital banking, investment, expansion, financial institutions, regulation
Categories: Banking & Fintech
Companies: Nubank
Countries: Mexico
This article is part of category

Banking & Fintech


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