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Nubank, the Brazillian challenger which sailed past the 25 million customer mark in June, has landed $300 million in fresh funding.
The equity funding is made up of five new investors – but none are named. This is according to a filing with the US Securities and Exchange Commission (SEC), first spotted by a Brazilian blog.
Existing investors include TCV, Tencent, DST Global, Sequoia Capital, and Ribbit Capital. Nubank is the second biggest credit card issuer in Brazil, following Itau Unibanco Holding, according to UBS analysts.
Nubank recently released its January – June 2020 financial results. It posted a net loss of BRL 95 million ($17 million) over the six-month period.
Whilst the challenger isn’t turning a profit, it did manage to get losses down from BRL 140 million last year. That’s a notable 32% reduction.
The start-up also said it has BRL 19.9 billion in cash on its balance sheet. It claims to have more than doubled its customer base to 26 million over the last year. Transaction volumes were up in the first six months of 2020, rising steadily by 54%.
Its default rate on loans was around 5.8%. This is notably above the national average. According to macroeconomic data analyst CEIC, Brazil’s non-performing loans ratio stood at a much lower 2.7 % in July 2020.
“The loss is a decision, and therefore expected as part of the current growth strategy,” chief financial officer Marcelo Kopel said in a blog post
“We chose to invest in the company, people and the development of new technologies. This model is well known and used by technology companies,” he added.
Nubank’s pace of growth in the first quarter of 2020 saw it acquire 42,000 users each day on average.
Across Brazil and Mexico, where it expanded in March, the challenger bank has roughly a 7.4% share of all consumers.
For comparison, UK challenger bank Monzo has roughly 4.2 million users – about a 6% share of the UK market if we assume most users are still British.
Whilst US challenger Chime has more than 8 million users in the US, carving out a rough 2.4% share of the market.
In July 2019, Nubank made its last raise of $400 million, hitting a valuation of $10 billion. More recently, it acquired US programming and software firm Cognitect the firm behind Clojure and Datomic.
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