The Brazilian financial services company, Nu Pagamentos SA, raised USD$180 million from the Chinese gaming and social media giant, Tencent Holdings Ltd, for an undisclosed minority stake, the two firms announced on Monday.
This recent corporate move from Tencent will mark its debut into the Latin American's economy, just as well as the time when Nubank, as it is popularly known, is paving the way to offer consumer loans by the end of 2018. This new financial product is beyond the company's usual offering of fee-free credit cards and digital payment services, the report from NASDAQ said.
As further indicated over at Reuters, citing Nubank Chief Executive, David Velez, the Chinese tech behemoth is investing in the LatAm financial institution through a $90 million capital increase.
On top of this, Tencent is also pouring in another $90 mil for the acquisition of partial stakes on current Nubank shareholders.
Aside from the beefy $180 million capital, Nubank also now has access to what is considered as the largest digital banking company in the world.
Furthermore, the Brazilian firm is now valued at $4 billion, making it one of the most valued startups in the Latin American region.
Velez said, via Tech Crunch, that the partnership with Tencent is not actually focused on the money that it can help put upon its operations and expansion programs. Rather, the CEO sees more value in cooperating with the Chinese firm as it opens them into learning the ins-and-outs of the wider Chinese financial market.
According to the Nubank big boss, they hope that they can take those valuable lessons from their Chinese partners and in turn, apply them to its own market setting.
As Velez reiterated, China, through Tencent, has now become one of the chief innovators of financial services thanks to the company's dedication to create new industry-focused user-technology and offer them in various product platforms.
China, as he said, was able to exhaust the nearly endless possibilities of using the smartphone.
On the other hand, Tencent should be able to gain a deeper understanding as to how its corporate counterpart was able to manage serving over 5 million credit card holders.
According to Tencent President Martin Lau, the goal of the investment is to help Nubank realize its plan to build a full-service personal finance platform which it hoped to cater to the Brazilian market.
Aside from Nubank, Tencent has already got major stakes in online-only banking establishment, WeBank, and online-only insurance firm, ZhongAn Online P&C Insurance Co. Ltd.
