NuBank’s $750 Million Funding Round Proves Digital Challengers Are Still in the Game

Digital banking giant NuBank is about to become even more gigantic. That’s because the Brazil-based pulled in $750 million in Series G funding. When added to the $400 million it raised in January, the funds bring the Series G round to $1.15 billion.

Today’s round was led by Berkshire Hathaway, which contributed $500 million. Additional investors include Sands Capital, Canada Pension Plan Investment Board, MSA Capital, Advent’s Sunley House Capital, Brazilian asset managers Verde Asset Management, as well as Absoluto Partners.

With the new investment comes a new valuation. NuBank is now valued at $30 billion, a figure that rivals the valuation of Brazil’s number three bank, Banco Santander Brasil.

NuBank was founded in 2013 to serve the underbanked population across Brazil, a group that adds up to 30% of the country’s population. Today, the digital challenger has 40 million customers and offers a robust range of banking services including a debit card, insurance, loans, small business accounts, and P2P payment tools.

Today’s news comes after the company brought on two C-level hires, Matt Swann as Chief Technology Officer and Arturo Nunez as Chief Marketing Officer.

NuBank will use the funds from today’s investment to fuel further expansion into Mexico and Colombia, launch new products, and hire more employees. While the company has been in Mexico since 2018 and Colombia since last October, NuBank’s banking tools are currently limited to credit cards in both nations.

The massive size of this round and the notoriety of the lead investor offer a hint that digital-only banks are not just a fad limited to 2020. These newcomers have the ability and willingness to serve populations that banks have consistently ignored. Because of this, existing digital banks have increased their customer numbers in the past year, and there has been a massive onslaught of new digital banking players vying for a niche subset of the population.