MICROCAPITAL BRIEF: Nubank of Brazil Raises $750m in Equity, Mostly from Berkshire Hathaway, Sands Capital to Support Expansion in Latin America

Brazil-based digital bank Nubank recently raised USD 500 million from US-based holding company Berkshire Hathaway to help Nubank: (1) strengthen its management team with additional hires; (2) diversify its portfolio and product lineup, including through an investment of USD 135 million in its operations in Brazil; and (3) expand its products in other countries including Mexico, where Nubank has received 1.5 million credit card applications since its launch there in 2020, and Colombia, where Nubank has 300,000 potential customers on a waitlist.

The investment from Berkshire Hathaway was one of two recent extensions of Nubank’s Series G equity funding round of USD 400 million, which originally closed in January 2021. The second extension, which has similar objectives to the first, totaled USD 250 million and was led by US-based Sands Capital. The other participating investors were Brazil-based Absoluto Partners and Verde Asset Management; the Canada Pension Plan (CPP) Investment Board; China-based MSA Capital and Tencent; and US-based Invesco, Sunley House Capital and Tarsadia Capital.

Founded in 2013, Nubank offers financial products and services including life insurance, credit cards that can be managed through a mobile app, digital bank accounts that support mobile payments and investments, a rewards program, a personal loan product, and various “solutions for small businesses and entrepreneurs.” The credit card carries no fees, and pricing for the insurance begins at BRL 9 (USD 1.80) per month. As of 2021, Nubank serves approximately 30 million clients and has expanded from Brazil to Argentina, Colombia and Mexico. In 2020, Nubank reported total assets of BRL 49.9 billion (USD 9.83 billion).

Established in 1839, Berkshire Hathaway owns significant shares in a range of public companies and a railway as well as businesses in sectors such as energy, utilities and insurance. For 2020, Berkshire Hathaway reported total revenues of USD 246 billion on total assets of USD 874 billion.

Founded in 1992, Sands Capital invests in businesses in its home country abroad with a focus on “long-term growth objectives.” As of March 2021, Sands Capital manages client assets totaling approximately USD 68 billion.

By Harriet Ritchie, Research Associate

Sources and Additional Resources

Nubank press release
https://building.nubank.com.br/investors-berkshire-hathaway/

Nubank press release on Sands Capital extension
https://blog.nubank.com.br/nubank-atrai-segunda-extensao-serie-g/

Nubank 2020 annual report
https://nubank.com.br/docs/financial_statements/Nubank_consolidado_dez_2020.pdf

Berkshire Hathaway homepage
https://www.berkshirehathaway.com/

Berkshire Hathaway 2020 annual report
https://www.berkshirehathaway.com/2020ar/2020ar.pdf

Sands Capital homepage
https://www.sandscapital.com/

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