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Is Nubank The Next Big Upcoming IPO, Should You Buy The Stock?

After a year of blockbuster IPOs, the next big public listing investors have in store is a Buffett-backed bank in Latin America.

Haven’t heard of Nubank? Don’t worry, unless you live in Latin America, you really have no reason to. 

However, you can expect to start hearing a lot more about it in the coming months as the financial services company eyes up a blockbuster IPO before the end of the year.

What is Nubank?

Headquartered in Sao Paulo Brazil, Nubank is one of the largest fintech banks in the region. In early 2019, a private fundraising round valued the company at just over $10 billion. A couple of months later, a $500 million investment from Warren Buffett’s Berkshire Hathaway sent its valuation rocketing to roughly $30 billion. 

Now, with reports that it is set to go public on the Nasdaq by the end of this year at a valuation of over $40 billion, Nubank could become the second most valuable financial institution in Latin America. Reuters has even reported that Nubank bankers are pitching a valuation of close to $100 billion, which would put it in the leagues of Stripe and Revolut as the most richly valued private companies in the world.

But why all the hype for a Latin American fintech company?

The region — which includes countries like Mexico, Brazil, Argentina, and Columbia — is home to well over 660 million people, yet suffers from a highly unbanked population. While the penetration of banking services did improve over the past eighteen months due to the pandemic, countries like Argentina and Columbia still have an unbanked population of 40% according to Americas Market Intelligence, while more than half of Mexico’s population remain unbanked.

This presents a massive opportunity in the region for companies that can provide easy-to-use payments services for these demographics. But with other companies like PicPay, PagBank, and MercadoPago in the running too, the competition is hot.

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