On Tuesday, Brazil-based digital bank Nubank announced in a blog post that it raised $500 million in funds through Warren Buffett (Trades, Portfolio)’s insurance conglomerate Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial).
Berkshire’s contribution extends Nubank’s Series G funding, which was carried out in January. Nubank said that the new round of funding reflects the bank’s “hyper-accelerated and sustainable growth." The company said that its customer base topped 40 million this year and averaged over 45,000 new customers per day over the past five years.
Nubank founder and CEO David Velez said that no one thought it was possible for a company to change the financial system, yet the bank was confident that “there was room for disruption and innovation.” Velez further said that there was still work to be done: “Around 50% of the population in Latin America still does not have a bank account. Credit card penetration averages 21% while in the U.S., this figure is over 70%.”
The Nubank CEO said that Berkshire’s new round of funding allows the company to continue further democratizing access to financial services across Latin America. The company said it plans to expand product offerings and introduce new services while maintaining the accelerated growth rate in terms of market penetration.
Berkshire’s investment comes despite chopping several other bank positions
Berkshire’s contribution to Nubank comes despite the insurance conglomerate trimming some of its other bank holdings during the first quarter, including a 98% reduction in Wells Fargo & Co. Inc. (WFC, Financial) and the closure of its position in Synchrony Financial (SYF, Financial).
Berkshire also sold approximately 24% of its StoneCo Ltd. (STNE, Financial) holding and 1% of its holding in US Bancorp (USB, Financial) during the first quarter.
