Brazilian online lender Nubank's target valuation of $50 billion would make it one of the most valuable IPOs in the U.S. in 2021.
Nubank filed for a confidential IPO with the SEC last week. According to the filing, the company plans to raise over $3 billion through the sale of about 289 million shares priced between $10 and $11 per share.
Nubank IPO is expected this year.
The Sao Paulo-based fintech's IPO is expected to happen before the end of this year. The company plans to trade on the New York Stock Exchange under the ticker symbol “NU.” It will also list Brazilian Depositary Receipts on the Sao Paulo Stock Exchange under the ticker symbol “NUBR33.”
Target valuation will make Nubank more valuable than Brazil’s largest bank.
If Nubank reaches its target valuation of $50 billion, it will make the company more valuable than Brazil’s largest traditional lender, Itau Unibanco Holding SA, which has market capitalization of over $38 billion, Reuters reports.
In June, Nubank’s valuation was estimated at $30 billion after Warren Buffett’s Berkshire Hathaway invested $500 million in the company.
Nubank is a disrupter of the Latin American banking industry.
Founded in 2013 as Nu Pagamentos, Nubank originally started as a credit card company that charged no annual fees for its customers. Nubank co-founders David Velez, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible started the company as a way to reinvent the financial services industry in Latin America.
“We set out to build a fundamentally different enterprise that could lead the way in redefining what a Latin American company in the 21st century looks like,” the trio wrote in the company prospectus filed with the SEC.
The company grew over the years to offer more financial products including loans, investing, insurance, and checking and savings accounts. Currently, the online lender has over over 48 million customers throughout Brazil, Mexico, and Columbia. As of Sept. 30, over 5.1 million people selected Nubank for their first bank account or credit card, the company said in its prospectus.
Forbes ranked Nubank as the number one bank in Brazil for the past three years. The online bank has also been ranked as the #1 Digital Banking App in the World by Pymnts.com and Latin America’s Best Bank and Best Digital Bank by Euromoney.
Nubank's revenue has doubled in the past nine months.
According to the company’s financials, its revenue almost doubled to $1.06 billion in the nine months prior to the end of September.
The company states that proceeds from the Nubank IPO will be used for general corporate purposes, including working capital, operating expenses, and capital expenditures. A portion of the proceeds might also be used to acquire or invest in businesses, products, services, or technologies.
After the IPO, Velez, Junqueira, and Wible will hold 87 percent of the voting power and 25 percent of the company’s outstanding shares, Reuters reports.
The lead underwriters of the Nubank IPO are Morgan Stanley, Goldman Sachs, Citigroup, and NuInvest.