Digital bank Nubank is on the hunt for FinTech bargains in Latin America as venture capital money dries up amid rising interest rates and tighter credit flows, triggering possible hard times for struggling startups.
Nubank CEO David Vélez told Financial Times it will make sense for some players in the crowded FinTech 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 want three or four payment apps on their smartphones, not 20.
He told FT he thinks there will be a number of acquisitions in the FinTech space and said some prospects Nubank had discussions with in the past are “coming back at a 70% discount.”
See also: FinTech Nubank Expects Growth Amid Brazil’s Economic Struggles
The digital bank’s quest for mergers and acquisitions (M&As) is moving ahead despite its fall in valuation from $52 billion last December, PYMNTS reported in February. Velez said at the time that Nubank’s use of data in underwriting loans will keep its increased ratio of nonperforming loans to a minimum.
The company’s shares on the New York Stock Exchange fell by two-thirds so far in 2022, bringing its market capitalization to about $15 billion, according to the FT report.
Nubank raised roughly $2.8bn in its initial public offering last year, and its credit losses were lower than the market average, Velez told FT.
Read more: Bexs Pay Partners With Nubank to Offer Brazilians Cross-Border eCommerce Payments Platform
Founded in São Paulo 2013 by Cristina Junqueira, Vélez, and software engineer Edward Wible, Nubank is the biggest digital lender in Latin America and has focused on bringing financial services to the unbanked. The startup works with more than 50 million people across three countries, including Mexico and Colombia, and in every city in Brazil.
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