Tencent’s investment of $180 million in Nubank has given a boost to the funds of the financial services company of Brazil.
Tencent has always shown interest in financial services start-ups. After the investment of $90 million each in the secondary market and direct investment, the company has gained an access to the biggest digital banking company of the world.
Further, Nubank has also benefited by the huge investment raising its total valuation to $4 billion making it one of the highest valued private start-ups of Latin America. The co-founders of Nubank, Cristina Junqueira and David Velez, felt that it is a very valuable investment that has provided them with a strategic partner. The financial services and products of Tencent as well as the transaction platform that it provides is far better than any other company in the US or Western Europe.
Velez said that the company has already raised $150 million in the month of February and there was no requirement for additional capital. He also said,
We found so much value in partnering with Tencent. Particularly everything there is to learn about the Chinese financial market.
Velez is hoping to learn valuable lessons and benefit from their application to the Brazilian market. Being on the forefront of the global financial services is the result of the ability of China’s technology companies to offer multi-product platforms.
On the other hand, Tencent will also have an understanding of the management system of Nubank and it deals with the millions of credit card holders to whom it is providing service. Velez said,
Over 20 million people have applied for the card. There are active, engaged, customers that want to get everything from us.
The company has high potential to serve tens of millions of the Brazilian population. It is observed that developed markets have a lot of banking barriers that restrict emergence of financial services start-up. However, this is not the case in Brazil.
Source: TechCrunch, Tecofertas