Nubank moving into new territory with investments

Brazil-based Nubank, currently providing banking products for more than 30 million customers, has acquired digital investment platform Easynvest. This brings the bank into the investment sphere, but what is the end goal? Patrick Brusnahan writes

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Easynvest has grown exponentially in recent times. It currently holds 1.5 million customers. Furthermore, the number of investors in Brazil has grown by 76% between December 2019 and August 2020 to reach three million.

Both Nubank and Easynvest are aiming to disrupt the industry by building the investment market in Brazil. In addition, they both want to foster financial inclusion and education by making the sector more inclusive and universal.

David Vélez, Nubank CEO, says: “We challenged the status quo to create a new generation of financial services in Latin America. In the past seven years, we have freed around 30 million customers from the complexity of the traditional system through a platform of simple and human-centric financial services products.

“The current investments market in Brazil is filled with complex, expensive products and surrounded by conflicts of interest. The less income and financial education a customer has, the worse her investment options are. This creates an enormous opportunity to replicate Nubank's approach to bringing simplicity and efficiency to a complex market and using technology and customer focus to democratize access to great financial services products for everyone. In Easynvest, we have found a partner that not only shares our cultural values and purpose but also has a strong leadership position.”

Speaking to PBI, a Nubank spokesperson states: “We understand that investing is a fundamental part of people's financial planning and something increasingly present in the lives of Brazilians. From December 2019 to August this year, for example, the number of individual investors on the stock exchange increased by 76%, according to B3 (the Brazilian stock exchange).

“The problem is that this is still a complex market, with expensive products and few options, especially for those who do not have large amounts available. Therefore, there is still the perception that investment is something for a few - when, in fact, learning to invest can help millions of people achieve a better financial future. Today it is difficult to find democratic and affordable investment solutions, but we will work to change this scenario.”

This is Nubank’s third acquisition in 2020 after snapping up technology consultancy firm Plataformatec and US-based software firm Cognitect.

On whether the shopping spree is over, the spokesperson adds: “Nubank is always evaluating M&A opportunities to keep reinventing the financial services industry across Latin America.”

Nubank is one to watch. While many private banking look to shift digitally, Nubank has started digital and decided to go into investment. Other companies can see the path opening and more digital players will be looking into the possibilities created by investments.

The bank has raised over $1bn in investment rounds and has expanded offices to Mexico, Argentina and Germany. The only question left is: where next?