Nubank is looking for M&A LatAm FinTech coup

Digitalbanken Nubank is looking for a FinTech coup in Latin America as venture capital money dries up in the midst of rising interest rates and tighter credit flows, which triggers possible difficult times for struggling start-ups.

Nubank CEO David Vélez told the Financial Times that it would make sense for some players in the crowded LatTech market in LatAm to merge or sell.

“This will enable the survival of the fittest,” he said, estimating that there are probably 40 digital banks in Brazil – and people will have three or four payment apps on their smartphones, not 20.

He told FT that he thinks there will be a number of acquisitions in the FinTech area and said that some prospects Nubank had discussions with earlier “come back with 70% discount.”

See also: FinTech Nubank expects growth in the midst of Brazil’s financial struggles

The digital bank’s search for mergers and acquisitions (M & As) is progressing despite the fall in valuation from $ 52 billion in December last year, PYMNTS reported in February. Velez said at the time that Nubank’s use of data in taking out loans would keep the increased proportion of non-performing loans to a minimum.

The company’s shares on the New York Stock Exchange fell two-thirds so far in 2022, bringing the market value to around $ 15 billion, according to the FT report.

Nubank raised about $ 2.8 billion in its IPO last year, and credit losses were lower than the market average, Velez told FT.

Read more: Bexs Pay partners with Nubank to offer Brazilians cross-border e-commerce payment platform

Founded in São Paulo in 2013 by Cristina Junqueira, Vélez and software engineer Edward Wible, Nubank is the largest digital lender in Latin America and has focused on bringing financial services to those without a bank. The startup works with more than 50 million people in three countries, including Mexico and Colombia, and in every city in Brazil.

Related: Nubank invests $ 650 million to expand to Colombia, Mexico