By Oliver Smith on Wednesday 9 June 2021
The Oracle of Omaha has his sights on fintech.
In an altogether unexpected move, famed business magnate, investor and philanthropist Warren Buffett has written a $500m cheque to buy a stake in Brazilian fintech Nubank.
The digital bank yesterday announced that Buffet’s funding, via his company Berkshire Hathaway, and an additional $250m from investors including the Canada Pension Plan Investment Board, MSA Capital and Sunley House Capital would be added to its Series G funding round.
The extra $750m pushes Nubank’s round to an incredible $1.15bn in fresh funding for 2021, the largest private capital raise by a Latin American tech company and one of the largest fintech raises ever.
"As I look back on the past eight years, everything that we have been able to accomplish as a company is just remarkable,” said Nubank’s CEO and founder David Vélez on the news.
“When no one thought it was possible, we were convinced that there was room for disruption and innovation and, more importantly, that the customers just deserved better.”
Vélez reiterated the fintech’s growth plan regarding the funding, deepening its product offering in Brazil with a particular focus on its recently acquired Easynvest investment platform, while aggressively expanding in its new markets like Mexico and Colombia.
“In Latam alone, roughly 50 per cent of the population is still unbanked and credit card penetration is on average 21 per cent versus 70 per cent in the US,” the CEO added.
“As we announce this new funding, we are at a true inflection point for Nubank and we are honored to welcome such a world-class investor to support us on our journey.”
While Buffett didn’t personally comment on the Nubank investment, it’s actually Berkshire Hathaway’s second Brazilian fintech play.
Back in 2018 Berkshire bought 14m shares or an 8 per cent stake at the IPO of StoneCo, a payments group that offers similar services to Zettle (formerly iZettle) and Square in the Latin American market.
In the years since its listing, StoneCo’s share price has risen over 100 per cent to $7.58bn and today it’s the fourth-largest payment processor in Brazil.
Buffett will surely be hoping Nubank follows a similar trajectory.