Narayan AmmachchiChinese gaming and social media firm Tencent Holdings has reportedly acquired a 5% stake in Brazilan financial technology startup Nubank.
Tencent will infuse US$90 million into Nubank’s coffers to be used for loans, in addition to paying another US$90 million for the stake, valuing Nubank at US$4 billion, according to Brazilian media.
The news comes almost ten months after Nubank received regulatory approval for offering consumer loans.
Founded in 2013, Nubank is a success story in the Brazilian financial technology industry. It offers credit cards for free, besides providing digital banking services to more than 2 million consumers across the country.
Over the years it has raised US$330 million through six financing rounds. In March it raised US$150 million from DST Global and Sequoia Capital. Its other investors are Kaszek Ventures, Tiger Global Management, Goldman Sachs, and QED Investors.
The Brazilian fintech company says it will use the new funding for expanding its payments, consumer lending, engineering, and machine learning businesses.
Nubank’s mobile app is widely popular in Brazil, as it allows users to block their credit card, contact customer support, and track transactions in real time.
Brazil has Latin America’s fastest growing financial technology market. Reports say there are 150 fintech startups offering a wide range of digital payment services in the country. Even Facebook and Amazon are planning to venture into the country’s financial landscape.
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