ImpactAlpha, October 17 – São Paulo-based Nubank launched in 2014 to provide underserved Brazilians with access to no-fee, low-interest digital credit cards that could be managed on their smartphones. It has raised $180 million from Chinese Internet giant Tencent. The deal values Nubank at about $4 billion, TechCrunch reports (via The Information.)
Credit cards in Brazil carry astronomical interest rates; 400% per year is not unusual. Nubank’s first product was a Mastercard that could be managed completely by mobile. Nubank’s interest rates couldn’t be immediately determined, but the company claims its credit lines are “low-cost” relative to other products. As of June, the company had four million credit card customers.
Nubank has also expanded into high-yield savings accounts, catering to the 30% of Brazilians without a bank account.
Nubank’s co-founder David Velez said the company would look to Tencent’s experience in China’s tech-backed financial services sector, noting that China “built the playbook of how to use mobile” in financial services.
Prior to its latest funding, Nubank had raised more than $330 million in six equity rounds, with backing from Sequoia Capital, Kaszek Ventures, Tiger Global Management, QED, Founders Fund, DST Global, Thrive Capital, and others.