Nubank contemplates for an IPO later this year

Nubank, a Brazilian digital bank backed by Warren Buffett’s Berkshire Hathaway, is contemplating an IPO on Nasdaq, according to reports. Nubank is crypto-friendly, with a bitcoin exchange-traded fund available for purchase (ETF). “The bitcoin ETF might be a means to further democratize access to the crypto market,” the bank stated.

(Source: Nubank)

Bloomberg reported Thursday that Nu Pagamentos SA, commonly known as Nubank, is contemplating an IPO on the Nasdaq stock exchange for more than $2 billion before the end of the year, citing individuals familiar with the issue.

Berkshire Hathaway Inc., which is owned by Warren Buffett, has funded Nubank. Berkshire Hathaway invested $500 million in the Sao Paulo-based digital bank, which has over 40 million customers across Latin America, in June.

Nubank may seek a valuation of more than $40 billion, according to the sources. Details may alter, though, as negotiations continue. Following private fundraising in early 2019, the bank was valued at $10.4 billion, but after Berkshire’s $500 million investment in June, it was valued at $30 billion.

Nubank, with a market capitalization of more than $40 billion, may become Latin America’s second most valuable banking institution. With a market value of $55 billion, Brazil’s Itau Unibanco Holding SA is the most valued, followed by Banco Bradesco SA with a market value of $41 billion. Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc., and UBS Group AG are among the banks handling the anticipated IPO’s share sale.

Nubank is a cryptocurrency-friendly financial institution. It provides bitcoin exchange-traded funds (ETFs) through Easynvest, a trading platform it purchased earlier this year and rebranded “Easynvest by Nubank.”

QBTC11 by QR Asset Management is the bitcoin ETF provided by Easynvest. The Securities and Exchange Commission of Brazil authorized it as the first bitcoin ETF (CVM). It is traded on the B3 stock exchange, which is one of Latin America’s major and second-oldest stock exchanges.

Nubank said on the Easynvest website, citing Tesla CEO Elon Musk and Bridgewater Associates founder Ray Dalio: “A simple [online] search is enough to find that even billionaires like Elon Musk and Ray Dalio have already shown an interest in this sort of asset.” The cryptocurrency ETF, according to the bank, “maybe a method to further democratize access to the crypto market.”

Nubank, which was formed in 2013, started with simply a credit card, allowing users to build confidence without having to pay any money upfront, as would be the case with a debit card. When the firm expands into other markets, it follows the same approach. Nubank aims to develop consumer trust before launching debit and savings accounts.