Brazil’s fintech platform Nubank has announced that one million people have opened savings accounts within a month of the company’s launch in Mexico. Nubank invested US $330 million in equity capitalization to start up the project and expand its footprint in the LatAm region to set up the Mexican arm, also known as Nu Mexico.
Customers’ deposits totalled 1 billion pesos (US $58 million) with about 90 percent being saved in Nubank’s separate space also known as “little boxes”. Customers are receiving an annual return of 9 percent. The savings accounts are Nubank’s second digital product being offered in Mexico.
Brazilian banking sector is solid
Nubank is already operating in 10 municipalities in Mexico.
The Brazilian banking sector is solid despite turmoil in the U.S.” David Vélez, Founder and CEO – Nubank
The contribution of Mexico’s operations to the results for Nubank Group may slow down according to research analysts in Citibank because they are expecting low penetration in the credit card market. The volume of transactions by credit card in Mexico only amounts to approximately 20 percent of the same transactions in Brazil.
Next for Nubank is Colombia
The Brazilian lender is also expanding its portfolio in Colombia. The bank announced last month it expects to launch digital checking accounts in the South American country by the end of 2023.
Nubank is backed by investor Warren Buffet. The company’s next expansion in the LatAm region is expected to be Colombia where its portfolio will be implemented by year end. The bank also announced that it plans to launch digital checking accounts to customers in the country.
Nu Holdings Ltd. is a holding company that engages in the provision of digital banking and fintech services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible in 2016. It is headquartered in George Town, Cayman Islands.
Founder and Chairman David Vélez founded Nu in 2013. He was senior partner at Sequoia Capital between January 2011 and March 2013, in charge of the firm’s Latin American investments group. Before Sequoia, Vélez worked in investment banking and growth equity at Goldman Sachs, Morgan Stanley and General Atlantic. He holds a Bachelor’s of Science Degree in Management Science and Engineering and a Master’s in Business Administration, both from Stanford University.