Nubank Plans to Expand in Latin America by Picking up Startups at Low Prices

Brazilian neobank Nubank plans to continue expanding in Latin America by picking up startups in the area at low prices, David Vélez, founder and CEO of Nubank, said that. 

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The neobank secured a $650m credit line to expand across Mexico and Colombia in April and is now looking to maximise on the impending "shakeout" in the area's fintech sector.

"There's going to be a rationalisation of some of the fintechs that are in the market, there will probably be some consolidation," said Vélez. "This will enable the survival of the fittest." 

The CEO pointed to there now being "about 40 different digital banks" in Brazil. "It probably was too much," he said. "Consumers will not have 20 different payment apps in their smartphones. It's just too complex. You might have three or four, not 20."

Vélez confirmed the company will be looking to do more mergers and acquisitions, noting that some conversations it was having around a year ago are now coming back at a 70 per cent discount.

Nubank has already bought several start-ups in the last few years and expanded its initially credit-based offering to include insurance, investments and crypto.

"The funding environment is certainly going to be a bit harder than what you saw the past few years," Vélez said.

He explained that he was not worried, though, saying that US investors in the past have asked what would happen in the bad times.

"That is the wrong question to ask," he said. Referring to the country's battles with inflation and recession, he said: "Brazil has always had bad times."