Nubank’s IPO is about more than just raising cash

The Brazilian neobank’s IPO could be one of the largest offerings of the year. But co-founder Cristina Junqueira says it could have a more profound meaning for her customers.

Nubank co-founder Cristina Junqueira

Nubank co-founder Cristina Junqueira says she’s proud of what her neobank has accomplished.

Photo: Nubank

Nubank, which began trading on the NYSE today, isn’t just going public to raise money: It’s also looking to use the event of its IPO to spread stock investing to retail investors in its home market of Brazil.

That’s a point of pride for Cristina Junqueira, co-founder of Nubank and CEO of its Brazilian unit — and it demonstrates how companies, particularly in the financial sector, can think about listing shares as more than just a financing event.

Through a dual listing in Brazil and the U.S., about 800,000 people, or one out of four Nubank customers with investment accounts, bought Nubank shares. In addition, the company plans to distribute free shares to about 7.5 million customers through its financial education program NuSocios, which could effectively triple the number of equity investors in Brazil, she said. (People who participate in NuSocios get one-sixth of a Class A share, which can be traded after one year.)

“We’re very excited about the impact this is going to have on the country,” she said. “Equities are a big source of wealth creation for a lot of families. It was something that was completely inaccessible for Brazilians.”

The move is the latest example of the company branching out beyond its roots to become an all-in-one financial app for consumers. Nubank, founded in 2013, started with no-fee credit cards but now offers a variety of other financial services, such as bank accounts, debit cards, personal loans, small business accounts and “buy now, pay later” in Brazil, Mexico and Colombia.

Financial super apps have been popular in China, India and Southeast Asia, and it’s a strategy that American companies like PayPal, SoFi and Block have been pursuing.

Nubank at the New York Stock Exchange Nubank executives and employees celebrate at the New York Stock ExchangePhoto: NYSE

The promise that consumer fintech companies that start out in one niche can spread to others, diversifying their revenue and broadening their customer base, has drawn considerable interest from private and public investors. U.S. neobank Chime is also expected to list its shares in 2022.

Nubank is able to leverage data to help cross-sell and improve its products, Junqueira said — for example, when it moved from credit cards to personal loans.

Nubank, which began trading on the NYSE today, raised $2.6 billion, at the top of its IPO range, Wednesday night. Its shares started trading at $11.63, and though they fell to close at $10.33, it’s still worth a bit over $50 billion. The IPO made Nubank the most valuable financial firm in Latin America, according to Bloomberg.

Nubank’s journey to building a financial super app did not happen overnight. Founded in 2013, it began offering credit cards in 2014, which are data-rich and not capital intensive, Junqueira said, allowing Nubank to build a brand. But it wasn’t until years later that it felt ready to roll out other products.

“We always knew that we're going to go beyond that because we define our mission as finding complexity for people but what we wanted was to earn the right to do the next thing,” she said. “So for four years, almost five years, the only thing that we did was credit cards.”

Next came savings accounts, debit cards and personal loans. It now has a marketplace where it features financial products like shopping, remittances, home equity loans and auto loans. It also offers insurance.

She credits the pandemic with accelerating its growth, and giving Nubank a chance to differentiate itself further. Junqueira points to Nubank’s quick adoption of Brazil’s Pix mobile real-time payments system. (Brazil has done more digital real-time payments by volume than the U.S. this year as of October 2021, per ACI Worldwide.)

Nubank is known for reaching customers that are unbanked, and that is a focus for the company. But it is also now competing directly with banks, Junqueira said.

“[Banks] were always our competitors, right?” she said. “Because the vast majority of our customers were in some shape or form with them. There's some people that we're bringing in [who are] completely new and unbanked.”

Others were “just underbanked” — and “unsatisfied,” she added.

Update, Dec. 9, 2021: This story has been updated to include Nubank's closing price.


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