Nubank IPO File Highlights Growth Expectations
During the pandemic, amid a frenetic pace of FinTech listing activity on US stock exchanges, Nubank is preparing, to quote an old movie, to prepare for its close-up.
Focused on Latin America and with roots in Brazil, Nubank is only the latest in the parade of publicly traded neobanks, but it has the distinction of being backed by famous billionaire investor Warren Buffett (in particular , via Berkshire Hathaway).
The company has confidentially filed with the Securities and Exchange Commission (SEC) a document known as F-1. The confidential nature of the filing means that the exact details of the company’s financial statements have yet to be clarified. But enough detail exists – and has been provided by peer neobanks that have gone public – that a cross-read of the trends and a roadmap of what lies ahead is discernible.
Also see: Brazilian FinTech Nubank Prepares for IPO, valuation could exceed $ 55 billion
The first things are the first, as they say. The valuation of $ 55 billion that Nubank could claw back if / when it goes public early next year would exceed the valuation of $ 33 billion that Revolut clawed back in its fundraising round over the summer. . The valuation reflects what a business is likely to “value” and how much investors would pay to own the business, as well as all of its current and future earnings and cash flows.
As announced earlier in the year, Revolut’s revenue tripled through 2020, while its operating loss growth slowed.
Read more: London FinTech Revolut triples revenues against doubled losses
As for the Nubank metrics which have leaked: Bloomberg noted that the company’s first-half 2021 revenue is over $ 716 million, with net income of $ 13.7 million. The company notes that it has 40 million users in its current key markets which cover Colombia, Mexico and Brazil. Earlier this year, the company said it had 34 million users in place; barely three-quarters there has been a jump of more than 17% implied by this latest reading of 40 million consumers.
More Details: Brazilian FinTech Nubank Raises $ 400 Million, Expands in Latin America
One thing Wall Street will look to beyond revenue growth is sustained operating profit. Nubank laid out its strategy in a recent interview with PYMNTS, when CEO and founder David Vélez explained that his company – with the aim of instilling familiarity and trust in markets – always enters a market by launching a card. credit as first product, only later followed by debit offers.
Watch the interview: When consumers are far away, banks and credit unions come to them
And at a high level, Vélez said of the pandemic, “this crisis is accelerating a trend that was already accelerating: a trend to digitize the entire economy – every service. Once the crisis is over, we will only see an even greater acceleration in the number of customers wanting to use digital banking. “
In further signs of expanding its offerings, Nubank announced last year that it would acquire FinTech Spin Pay company. Nubank will thus expand its portfolio to bring Pix, a popular instant payment platform, to more consumers and e-commerce platforms.
The neobank’s promise is to offer a one-stop-shop for a range of financial services, serving the daily conduct of financial life. Nubank’s product list includes rewards programs, cards, and loans. As users grow and the ecosystem solidifies, investors’ eyes will be on the proverbial results.
See also: Nubank buys Spin Pay instant payments platform