Warren Buffet’s Berkshire Hathaway Inc (NYSE: BRK.A) agreed to take a $500 million (£353.72 million) stake in Brazil’s Nubank on Tuesday, becoming the largest shareholder of the fast-growing online bank.
Nubank is the largest fintech bank in Latin America, with close to 40 million clients. The funds it raised from Berkshire, the bank said on Tuesday, will be used to hire more employees, launch new products/services, and expand its operations in Mexico and Colombia.
Nubank raised another $250 million from other investors
The Sao Paulo-headquartered company also highlighted that funds from other investors, including Canada Pension Plan Investment Board, Sands Capital, Advent’s Sunley House Capital, MSA Capital, Absoluto Partners, and Verde Asset Management, helped it raise another $250 million.
Nubank’s previous fundraising round had left it with a valuation of $25 billion. The new investments on Tuesday pushed its valuation up, to $30 billion. Including these $750 million, the Latin American bank’s G series has now raised $1.15 billion in total.
In late April, the Brazilian digital bank was reported considering listing its shares on the New York Stock Exchange before the start of 2022. Established in 2013, Nubank has raised roughly $2 billion to date. Berkshire Hathaway is yet to comment on Tuesday’s news.
Nubank reports record NPS for its Mexican credit card
Commenting on the fundraising, Nubank founder David Velez told TechCrunch:
“We saw a great opportunity in terms of growth rate, and we’re very tiny when compared to the incumbents. The momentum we’re seeing in Mexico is terrific. Our Mexican credit card net promoter score (NPS) is 93, which is the highest we have had in Nubank history. In Brazil, the highest we had was 88. We’ve seen the entire market go digital, especially people who never thought they would. There is really now an avalanche of all backgrounds of people who are getting into digital banking.”
The news comes more than a month after Berkshire Hathaway reported its financial results for the first quarter. The Omaha-based company also extended its share repurchase programme by $6.6 billion at the time.
Berkshire Hathaway Class A shares tanked close to 1.5% on market open on Tuesday. On a year-to-date basis, the stock is up roughly 25%. At the time of writing, the American multinational conglomerate holding company is valued at about $657 billion and has a price to earnings ratio of 6.55.
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