Nubank Nabs $650M to Invest In Colombia, Mexico

The funds come from a three-year, local currency credit line from Morgan Stanley, Citi, Goldman Sachs and HSBC

Left to right, Nubank co-founders David Vélez, Cristina Junqueira and Edward Wible.
April 11, 2022 | 01:35 PM

Bogotá — Brazil’s Nubank (NU) has procured a credit line for $650 million, and which it will invest in the development of its brand in Mexico and Colombia, where it operates under the name Nu, the bank announced on Monday.

Nubank will invest the funds in technological development and product innovation, the growth of its client base and the attraction of talent, the company said.

The Brazilian firm highlighted the importance of the Mexican and Colombian markets in its operations, which, together with Brazil, represent 60% of Latin America’s GDP and population.

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The company reported that the credit line will be spread over three years, in local currency, and was provided by Morgan Stanley, Citi, Goldman Sachs and HSBC.

The lenders were also the placement intermediaries in Nubank’s IPO in December 2021, in which the company raised some $2.8 billion.

“This financing is a reflection of the confidence of major investors and shareholders in our business model, and growth potential,” Nubank’s CEO and co-founder, David Vélez, said.

Last year the company increased its client base to 53.9 million in Brazil, Mexico and Colombia.

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By the end of 2021, the neobank had 1.4 million clients in Mexico, a growth of 1.2% year on year, as well as an net promoter score of 94 points.

In that same year, it racked up 114,000 clients in Colombia, where it is working on the construction of an engineering, product and data science center.

According to Nubank’s financial report, total revenues in 2021 were $1.7 billion, setting a new record for the company, while gross profit was $732.9 million in 2021, up 131.6% from the previous year.

Vélez, 40, was born in Medellín into a family with entrepreneurial roots, as his uncle, Juan Raúl Vélez, is the co-founder of Cueros Vélez, and the latter’s brothers are also the founders of footwear, leather goods and accessories brand BOSI.

Disenchanted with the bureaucracy of traditional banking, and having suffered with the difficulties of opening an account as a foreigner, the Colombian entrepreneur founded Nubank in 2013 together with Brazilian Cristina Junqueira and U.S. citizen Edward Wible.