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Brazilian neobank Nubank has raised a $650 million credit line to accelerate its presence in Mexico and Colombia, where it operates under the name Nu.
The three-year credit line is financed by Morgan Stanley, Citi, Goldman Sachs, and HSBC. The institutions also backed Nubank’s IPO in December 2021, in which the company raised approximately $2.8 billion.
According to Nubank, the capital will be invested across technology development and product innovation, customer base growth, and attracting talent in the region.
Currently, in Mexico and Colombia, the company only has a credit card offering. While the digital bank did not reveal what its next steps in both countries will be, but the neobank will likely use a strategy that is similar to what it has done in its home country, where it started to gradually roll out additional services such as a checking account, insurance and investments.
“We are working decisively to become leaders in the sector. We have grown at a strong pace and this regional credit line allows us to continue advancing more rapidly in our objective of fighting bureaucracy to empower our clients,” said Catalina Bretón, general manager of Nu Colombia, in a press statement.
The Nubank expansion across Latin America
Nubank announced its was setting foot in Mexico and Colombia in 2020. The Mexican operation alone received a $135 million investment, which went towards business development and customer acquisition.
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Although the fintech does not disclose many details about its growth in its individual markets, it said the Mexican business had 1.4 million customers by the end of 2021, up 1,243% year on year.
In Colombia, Nu reached the mark of 114,000 customers only 11 months after launching its credit card, with growth of almost threefold in the last quarter of 2021. In addition, the company is working on building an engineering, product, and data science hub in the country.
Back in 2014, right after Nubank was founded in Brazil, the company ended its first year of operations with 400,000 customers. Fast forward to February 2022, the neobank reached a total of 53.9 million customers across all its markets, of which 41.1 million are active customers.
The rationale as to why the company focused on these three countries is clear: together, Brazil, Mexico and Colombia represent 60% of Latin America’s GDP (Gross Domestic Product) and population.
“The rapid growth we have seen in Mexico and Colombia exceeded our most ambitious expectations”, said David Vélez, CEO and founder of Nubank, in a press statement. “We are doubling down our commitment in these countries to continue growing and generating positive local impact through the financial inclusion of millions of Latin Americans”,
(translation by Gabriela Del Carmen, editing by Angelica Mari)
