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Nubank Approaches $1 Billion in Revenue Amid Mexican Expansion

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Brazilian neobank Nubank is predicting it will someday become Latin America’s largest financial service company.

“I think that will happen eventually,” CEO David Vélez told the Financial Times (FT) Tuesday (Feb. 6), referring to the company’s ambitions to lead its industry in terms of customer numbers.

“We’re now in the top five,” he said. “We see a path towards becoming the leading financial institution in Latin America and one of the leading financial institutions in the world over a number of decades.”

His comments come as Nubank is expected to mark $1 billion in yearly profits amid expansion into Mexico and Colombia, the FT said, citing analyst projections.

“It‘s the first time a western neobank reaches that milestone, so it should give peers and investors confidence in what can be achieved,” said Christoph Stegmeier, of management consulting group Simon-Kucher & Partners.

After launching in Brazil a decade ago, Nubank is now targeting Mexico. That country “has the potential to be as important as Brazil for us,” said Vélez, pointing to its large population of nearly 130 million and higher income per capita.

The FT report also notes that — per regulator CNBV — more than half of all Mexican adults have no bank accounts.

Last year, Nubank began offering personal loans to customers in Mexico as part of a larger effort to promote access to credit and financial products.

The company pointed to findings from Mexico’s 2021 National Financial Inclusion Survey (ENIF), showing that only a third of consumers in Mexico who applied for a loan were able to get one from a traditional financial institution.

“We are having a positive impact by enabling greater access among Mexicans, as around 20% of the smartphone-connected adult population in the country has already applied to build a financial relationship with us,” said Iván Canales, general manager of Nu Mexico. “We hope to continue expanding our footprint in the country with the launch of personal loans.”

Meanwhile, PYMNTS looked at the challenges of modernizing financial services in Latin America in a recent interview with Ximena Aleman, co-founder and co-CEO of Uruguayan FinTech Prometeo.

“What we’re providing is versatile, comprehensive infrastructure that our customers can use in multiple countries at the same time,” Aleman told PYMNTS CEO Karen Webster.

After heading a pair of startups and launching Prometeo, Aleman said she and her company “understood very early on that this infrastructure was quite necessary, especially if we wanted to have better financial services in Latin America,” adding that “we didn’t want to be a Plaid copycat.”