But the risks, as well as less friendly markets, already forced the company led by David Vélez to cut its planned IPO price by a fifth last week. And they still loom large. First, established banks have plenty of resources to fight disruptors, even if they may initially be reluctant to accept cuts in traditionally fat fees. Nubank’s no-fee credit card has attracted rival products. The company reckons incumbent Brazilian banks make 10 times as much revenue per customer.
- The week before, the company, officially known as Nu Holdings, cut its proposed IPO price range by a fifth, to $8-$9 per share from $10-$11. - Nubank also gathered so-called cornerstone investors interested in acquiring at least $1.3 billion in shares – about half the total offered – including existing backers such as Sequoia and Tiger Global Management and new ones such as SoftBank Latin America Funds.
- Nubank said in June that it had raised $500 million in funding from Warren Buffett’s Berkshire Hathaway. Berkshire bought 10% of the shares in the IPO, Bloomberg reported on Dec. 8 citing a person familiar with the matter. - Founded in 2013 to offer a cheap credit card in Brazil, the company now offers bank accounts and other services and claims 48 million customers. In recent years it has expanded into Mexico and Colombia.Editing by Swaha Pattanaik and Sharon LamSubscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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