Buffett-Backed Fintech Nubank to Seek $50.6 Billion Valuation in IPO
(Bloomberg) -- Nu Holdings, the Brazilian digital bank backed by billionaire Warren Buffett’s Berkshire Hathaway Inc., is seeking a valuation of as much as $50.6 billion in its initial public offering, making it one of Latin America’s biggest companies.
Nubank, as the firm is known, will market at least 289 million shares for $10 to $11 each, according to a filing Monday with the U.S. Securities and Exchange Commission. At the top of that range, it would debut as the region’s sixth most valuable firm and its largest financial institution.
With plans to raise more than $3 billion, Nubank’s IPO would be the third-largest on a U.S. exchange in 2021. It would trail only the South Korean e-commerce company Coupang Inc. and China’s biggest ride-hailing company, DiDi Global Inc.
Nubank said last week that it had filed confidentially to go public, in a transaction that will see it listing Class A ordinary shares on the New York Stock Exchange while simultaneously having Brazilian depositary receipts, known as BDRs, trading on the Sao Paulo stock exchange. Each BDR represents 1/6 of a Class A ordinary share. Nubank is also conducting a program that will hand out BDRs as a reward to clients.
The shares are expected to be priced Dec. 8, according to a schedule for the BDR sale.
The world’s biggest standalone digital bank, Nubank is at the forefront of financial-technology upstarts that are upending Latin America’s financial system. Created in 2013, the Sao Paulo-based firm reached 48.1 million customers across Brazil, Mexico and Colombia as of September, growth it credits to easy-to-use financial products with lower fees.
A successful IPO would also be a boon for Berkshire Hathaway, which invested in the company last June. At the time, Berkshire privately purchased a $500 million stake, valuing Nubank at $30 billion, a person familiar with the matter said at the time.
As a publicly traded firm, Nubank would shoot past the valuation of the behemoth banks it was designed to compete with. But it would do so without achieving anywhere near the same amount of profits.
Nubank posted a $99.1 million loss in the nine-month period ended in September, according to the prospectus, which also warned investors to brace for “short-term profit implications” from the firm’s expansion push.
Still, Nubank says it managed to turn a profit on its Brazilian operations in the first half of the year.
Nubank’s founder and chief executive officer, David Velez, owns a stake in the company worth roughly $10.4 billion at the midpoint price, according to the Bloomberg Billionaires Index. Velez, 40, will hold about 75% of the company’s voting power after the offering. His co-founder, Cristina Junqueira, 39, a rare female founder at a tech company, has a stake that would be worth roughly $1.3 billion at the midpoint price.
Sequoia Capital, which invested $1 million in Nubank in 2013 in a seed round, now has a stake that could be worth $8.3 billion at the midpoint price. Other top shareholders include DST Global, Tencent and Tiger Global.
Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc. are among banks handling the offering. Shares are expected to trade under the symbol NU, while BDRs will trade under NUBR33.
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