Nubank Invests $650M to Expand to Colombia, Mexico

Nubank, Latin America’s most valuable listed bank, announced Monday (April 11) that it is investing in a $650 million credit line to expand into Colombia and Mexico.

As Reuters reported, the new funds are a three-year line of credit in Colombian and Mexican pesos and financed by Citigroup, Goldman Sachs, Morgan Stanley, and HSBC, all of which underwrote the Brazil-based Nubank’s initial public offering (IPO) in December 2021.

At the time of the IPO, the company said the $2.6 billion it had raised would help it expand into Colombia and Mexico.

Read more: Nubank Goes Public at $41.5B Valuation with LatAm Growth on Horizon

Nubank, which is also backed by Warren Buffett’s Berkshire Hathaway, said the funding will go toward technology and product development, hiring, and expanding its customer base.

Most of Nubank’s products are developed and designed in-house, but the company has recently begun exploring partnerships, CEO David Velez told Reuters. He cited the company’s in-app marketplace in Brazil where users can shop at retailers and its insurance partnership with provider Chubb.

“We are constantly evaluating possibilities to broaden our product offering,” Velez told Reuters.

See also: FinTech Nubank Expects Growth Amid Brazil’s Economic Struggles

Founded in 2013 to give consumers a credit card with no fees, Nubank has become Latin America’s most valuable listed bank, at $41.5 billion, down from its $52 billion launch. The FinTech offers credit cards in both Mexico and Colombia, ending 2021 with more than 1.4 million customers in Mexico and 114,000 customers in Colombia.

“Our priority is to keep developing this product to expand our customer base and launch more features,” Velez said.

In February, Velez said he sees the economic struggles facing Brazil as a potential chance for Nubank to grow even faster in Latin America and around the world. He said the ratio of nonperforming loans (NPL) is likely to increase in Brazil this year as consumers face rising inflation and interest rates and a struggling economy. However, he expects Nubank’s NPL level to remain lower because of its advanced use of data in loan underwriting.