Nubank IPO opens on December 9th: Key things to know

Nubank IPO opens on 9th Dec

### About Nubank - There is a lot of buzz around Nubank, as Warren Buffett’s Berkshire Hathaway had invested in the company. **Warren Buffett had invested about $500 million** in June this year, at a valuation of $30 billion. - Nubank is a digital bank that offers a credit card with no annual fees, debit cards and cash management accounts, payment services, installment loans, and the ability to invest online. - Nubank mainly serves customers in Brazil and Mexico, but is also expanding to other parts of Latin America. - Nubank has disrupted the Brazilian market filled with players who charge high fees. ### Superfast growth at low cost - Nubank has acquired **48.1 million customers**, with more than 35 million monthly active customers. - Around 47 million of these customers are consumers, while Nubank also has 1.1 million small- and medium-sized businesses. - The bank has achieved this high growth at a very low cost, mainly due to an emphasis on Organic Acquisition. Customer acquisition cost for the first nine months of 2021 was only **$5 per customer**, with very low net churn as well. Customer acquisition costs in the U.S. in the credit card, retail checking, and consumer finance sectors typically range from $250 to $1,500 per customer, according to estimates by The Motley Fool. - Nubank has reported steady rise in revenues and gross profit year on year. From $319m in CY 18, the revenue has jumped to $737m in CY20. ![Group 96854.jpg]( ### Valuations The bank has decided to trim its price range to align with current market conditions. "Our focus is and has always been in the long term. For this reason, we sought to set a price range in line with markets at this moment,” Nubank said. Earlier, Nubank had planned a valuation of about **$50 billion** at the higher end of the price range. The revised valuation works out to be around **$41.5 billion**, down 18% from before. While this is certainly a good move given the current market condition, the public offer is still expensive. At an mcap of $41.5 billion, Nubank would be priced at **30 times** 2021 revenue. The company has a long way to become profitable, which could weigh on investor sentiment post listing. Hence, investors with a higher risk appetite who wish to take exposure to an innovative fintech company could consider investing in the issue.