On December 12, 2021 shares of Nubank, the Brazilian digital lender backed by Warren Buffett’s Berkshire Hathaway, jumped by nearly 15% in its first day.
Here’s what you need to know:
- What is an IPO?
- What is Nubank?
- How to buy Nubank IPO stock? – detailed instructions.
- Nubank IPO details – Nubank IPO date, price etc.
- What brokers provide access to the Nubank IPO?
What is an IPO?
When a private company or a startup first sells its shares to the general public, this process is known as an Initial Public Offering (IPO). An IPO means that a company's ownership is transferred from private ownership to public ownership. That is why the IPO process is called "going public".
Why go public? The primary benefit of going public is easier access to capital, but there are more reasons for that. If you want to learn more - here we answered frequently asked questions about IPOs in simple terms.
What is Nubank?
Nubank (also known as Nu Pagamentos) is a company developing a mobile app that is synchronized with the credit card. It allows tracking transactions, blocking credit cards, applying for a limit raise. The company also issues credit cards and offers loans with personalized interest rate.
Nubank Business Details and Financials Before IPO
The Brazilian entity is primarily known for its bank NuBank, which is one of the largest neo-banks in the world that focuses on online services without physical locations.
The company's potential post-IPO valuation could be $50 bn, with a current valuation of $30bn, making NuBank the most expensive digital bank in the world. Its closest competitor, the Swedish fintech startup Klarna was valued at $45.6bn in June 2021.
The company is one of the main innovators in the banking sector in Brazil. While many financial market players charge fees even for basic transactions, Nubank offers free services. The company started in 2013 by issuing credit cards with no fees, before gradually moving on to provide insurance, issue loans and offer savings accounts.
One of the bank's big investors is Berkshire Hathaway, which invested $500m in it this year. The bank now has more than 48m users, including the Brazilian pop star Anitta, and has branches in other Latin American countries. On average, the company grows its customer base by 2 million new customers each month.
The organisation's growth prospects are high. More than 650 million people live in Latin America, many of whom are still unbanked. The potential market is estimated at $269 billion. A positive factor for development is legislation that is loyal to the fintech sector.
Now Nubank gets more than half of its income from interest on credit cards and retail loans, plus it invests its own funds - mainly in government bonds. The second largest source of income is commissions, which the bank receives when customers pay with its cards (they are paid by merchants). Another source of income - subscriptions to loyalty programs, commissions for late payments, and money from brokers and management companies, which the company receives when it sells their services to customers.
The bank now operates in Brazil, Mexico and Colombia, which account for 60% of the population of all Latin America.
Nubank Prospectus SEC S-1 form
Nubank's top competitors include Monese, N26, Atom Bank and Monzo Bank.
Is Nubank Stock Publicly Traded?
Yes, Nubank is a public company now.
Nubank's Key People
Nubank's CEO is David Vélez.
Nubank pre-IPO Investors
Nubank's top pre-IPO investors are – Sequoia Capital, Founders Fund, Goldman Sachs, Redpoint Ventures, QED Investors, DST Global, Thrive Capital, Dragoneer Investment Group, Tiger Global Management, Ribbit Capital, Tencent, Fortress Investment Group, Kaszek Ventures, Tencent Holdings, Nicolas Berggruen, Invesco, Berkshire Hathaway, TCV, Sands Capital, Dragoneer, Whale Rock Capital Management, Whale Rock, Singapore’s GIC
Nubank has raised $2.3 b in total funding across 9 funding rounds for a $1 b valuation.
How to Participate in Nubank IPO Before Shares Hit the Public Market
In the past, Initial Public Offerings as a profitable investment type were only available to big funds or elite customers of major brokerage firms or banks and it was hard (almost impossible) for retail investors to gain access to IPOs. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market.
Luckily, technologies and marketplaces changed the rules of the game, now average investors can participate in IPOs. Brokers adjusted accordingly, making access to IPOs more affordable now.
Step-by-Step Guide How to Buy Nubank IPO Stock at Its Offer Price
- Check the Nubank IPO details. Always Do Your Own Research (DYOR) for the company that is going for IPO first.
- Find a broker. You need a broker that can provide you access to the IPO. You can use our tool attached below that helps to match investors with available IPO brokers in your area. Just click "FIND IPO BROKERS" button below to see brokers that offer access to Nubank IPO.
- Check eligibility criteria. Each broker has its own eligibility criteria, like account minimum which can vary widely.
- Create trading account. For KYC you need to prepare your identity document (valid passport or driving license) and a document confirming the address of residence (utility bill). Note, this procedure may take 1-3 days as it's better to prepare your account in advance.
- Deposit your account. To participate in an IPO, your account must have available funds in the amount you send IPO application for. Note, this procedure may take 1-3 days as it's better to prepare your account in advance.
- Request Nubank shares. Assuming you meet the requirements for participating in this IPO, your next step will be to request a certain number of shares in the IPO. Note, you may not be allocated all the IPO shares you offer to buy.
- Wait for allocation. The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
Note: Many IPO purchases come with a lock-up period, usually 90 or 180 days. You will not be able to sell your shares until this period expires.
What Brokers Offer Access to this IPO?
How to Invest After Nubank IPO at Its Opening Price
The most conservative way to buy Nubank stock would be to wait for the IPO and buy the shares on the public stock market. You can do this through the same brokers that provide access to IPOs or a trading app. Most of them have a stock trading functionality. Though, you won’t get in at the low price offered by pre-IPO.
How is Nubank going public?
Nubank announced it will go public via a traditional initial public offering, or IPO. No SPACs here.
When will be the Nubank IPO date?
Nubank IPO date is December 12, 2021.
What will be the Nubank IPO price?
Nubank IPO price range is $10.00 - $11.00 per share.
How many Nubank shares will be available for its IPO?
Nubank's number of shares - 289 million shares.
What stock exchange will Nubank trade on?
Nubank will be traded on NYSE.
What Is the Nubank Stock Ticker Symbol?
Nubank stock ticker symbol is NU
Nubank IPO news and updates:
- 23 Nov 2021 – Nubank moves into e-commerce
- 3 Nov 2021 – TechCrunch+ roundup: Yahoo leaves China, Nubank IPO, B2C expansion tips
- 27 Oct 2021 – World’s Second-Most Valuable Digital Bank Nubank Begins IPO Process In The U.S.
- 27 Oct 2021 – Nubank files to go public