Brazil’s Digital Bank Nubank In Talks to Go Public with U.S. IPO

Other featured stories include: Armed with $160M in Funding, LatAm’s Merama Enters the E-Commerce Land Grab; Brazil’s Loft Closes $100M in Additional Funding, Adding $700M to its valuation in a Single Month; Brazilian Mobile Payments Platform PicPayfiles for IPO on Nasdaq; and GM to Invest $1B in Mexico to Build Electric Vehicles.

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May 7, 2021

Brazil’s Digital Bank Nubank In Talks to Go Public with U.S. IPO

Brazil’s Nubank is in talks to go public on the U.S. stock market via an initial public offering (IPO). The digital bank is coordinating with advisers in New York, but further details, such as when the IPO would happen, are unclear, according to Reuters.

“We will probably do an IPO at some point in time, but it is not among our current priorities. We have the support of an amazing group of investors that share a long-term vision on our business,” Nubank told Reuters in an email.

Nubank was most recently valued at $25 billion, after a $400 million Series G funding round in January. The IPO would be one of the largest to come out of South America recently. The FinTech’s Co-Founder Cristina Junqueira said at the time that the bank could reach profitability within 18 months. 

“Once we’re able to build that trust with customers, then we launch debit and savings accounts. That’s the playbook we followed [in Brazil], and today we have more savings accounts than credit customers,” CEO and Founder David Vélez told PYMNTS in a recent conversation.

Armed with $160M in Funding, LatAm’s Merama Enters the E-Commerce Land Grab

Merama- an e-commerce startup focused on Latin America launched just five months ago- has announced it has raised $60 million in seed and Series A funding and $100 million in debt.

The money was raised “at well over a $200 million valuation,” according to Co-Founder and CEO Sujay Tyle. “We are receiving significant inbound for a Series B already,” he added.

Merama was founded in December 2020 with a vision to be the “largest and best-selling set of brands in Latin America.” The company has dual headquarters in Mexico City and São Paulo. The company partners with e-commerce product sellers in Latin America by purchasing a stake in the businesses and working with their teams to help them “exponentially grow and boost their technology while providing them with non-dilutive working capital” (TechCrunch). 

Merama expects to sell $100 million across the region this year: more than double the year before. It is currently focused on Mexico, Brazil, Argentina and Chile. The company already operates “very profitably,” so the newly raised capital will be used primarily for partnering with more brands; investing in building its technology platform “to aid in the automation of several facets” of its partners’ brands and in working capital for product innovation and inventory purchases. 

Merama collaborates with e-commerce giants such as Amazon and Mercado Libre, and several executives from both companies have invested in the startup, as well.

Brazil’s Loft Closes $100M in Additional Funding, Adding $700M to its valuation in a Single Month

São Paulo-based digital real estate platform Loft recently announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others. At the time, Loft was valued at $2.2 billion: a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.

Last week, Loft announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion, increasing its valuation by $700 million in a matter of weeks.

Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process.  In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to Co-Founder and Co-CEO Mate Pencz. 

The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” 

The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said. Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”

This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir Co-Founder Joe Lonsdale, Instagram Co-Founder Mike Krieger and David Vélez, CEO and Founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.

Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.

Brazilian Mobile Payments Platform PicPay Files for IPO on Nasdaq

Brazilian mobile payments app PicPay has filed an F-1 with the Securities and Exchange Commission (SEC) for an IPO valued at up to $100 million. The company plans to list on the Nasdaq under the ticker symbol PICS.

PicPay operates largely as a financial services platform that includes a credit card, a digital wallet similar to that of Apple Pay, a Venmo-style P2P payments element, e-commerce and social networking features.

“We want to transform the way people and companies interact, make transactions, and communicate in an intelligent, connected, and simple experience,” said José Antonio Batista, CEO of PicPay, in a statement.

Tech Crunch reports that 2020 was an explosive year for PicPay as the company saw its active user base grow from 28.4 million to 36 million as of March 2021. According to the company’s 2020 financial report, which PicPay shared with TechCrunch, the company’s revenues also grew drastically from $15.5 million in 2019, to $71 million in 2020. The company is not yet profitable, however, and PicPay shelled out $146 million in 2020 to fuel its growth.

“We believe that the growth of our base and user engagement in our ecosystem demonstrates the scalability of our business model and reveals a great opportunity to generate more value for these customers,” Batista added.

Fintech is one of the most popular sectors in Brazil today, as the country has traditionally been controlled by four major banks, which have been slow to adapt to technology and also charge very high fees.

PicPay’s IPO is being led by Banco Bradesco BBI, Banco BTG Pactual, Santander Investment Securities Inc., and Barclays Capital Inc. 

GM to Invest $1B in Mexico to Build Electric Vehicles

General Motors Co. announced it will invest $1 billion in a manufacturing complex in Mexico, drawing immediate criticism from the union for U.S. autoworkers as it prepares to build electric vehicles in 2023 in the border state of Coahuila.

Reuters reports that GM confirmed it is building a new high-tech paint shop that will start operations from June at the Ramos Arizpe site, which currently assembles conventional internal-combustion vehicles, including the Chevrolet Equinox and Blazer models, along with engines and transmissions.

GM aims to build two Chevrolet electric SUVs at Ramos Arizpe starting in 2023, according to Sam Fiorani, who tracks future vehicle production for AutoForecast Solutions. A GM spokesman said the company was not announcing or confirming the electric vehicles that will be built in Coahuila, describing Fiorani's comment as speculation.

The automaker already makes electric vehicles at four locations in the United States and Canada. GM has said it aspires to halt U.S. sales of gasoline-powered passenger vehicles by 2035.

GM's Ramos Arizpe expansion will include new capacity to make batteries and other electronic components, which will begin during the second half of this year, the company said.

"I'm sure this investment will contribute to boosting Mexican manufacturing while bringing development to the region, the industry and the country," said Francisco Garza, president of GM's Mexican unit, during a webcast announcement.

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