Brazilian Nubank acquires Easynvest, a broker backed by Advent

SAO PAULO (Reuters) – Brazilian financial start-up Nubank has decided to acquire broker Easynvest as part of a plan to become a full-service financial provider, Nubank founder David Velez said on Friday.

FILE PHOTO: The logo of Nubank, a Brazilian FinTech start-up, is pictured at the bank’s headquarters in Sao Paulo, Brazil on June 19, 2018. Photo taken on June 19, 2018. REUTERS / Paulo Whitaker

The move illustrates growing competition between the country’s five largest lenders – which account for over 80% of Brazil’s deposits – with newer platforms such as those of XP Inc, BTG Pactual and Guide already attracting billions of reais from saving.

“Since its founding, Nubank has wanted to offer a full-service financial platform because we see a lot of inefficiency in banks,” Velez said in an interview.

A growing mass of retail clients are switching from certificates of deposit to commercial stocks in Brazil due to historically low interest rates that have affected returns.

With around 30 million customers, Nubank is best known for its no-charge credit cards.

Nubank has entered into a cash and stock deal for Easynvest, Velez said, without disclosing a price. US private equity firm Advent International has been a major shareholder of Easynvest since 2017.

Velez said Easynvest will not target high net worth clients already served by the largest platforms in the country, but will instead only use digital channels to sell investment products, without brokers.

Easynvest, which has 1.5 million customers according to Nubank, is the third acquisition of the digital bank in 2020.

Velez said integration with Easynvest is expected to take more than a year. In addition to expanding investment offerings to Nubank clients, Velez said the company sees opportunities to expand loans to microentrepreneurs and also into non-financial services, although he did not elaborate.

The Nubank founder added that fintech could expand to other countries, although a planned launch in Argentina has been postponed due to the country’s economic slowdown. It also offers credit cards in Mexico.

In June, Nubank closed a new round of funding of $ 300 million, with five of its existing investors. Current shareholders of Nubank are TCV, Tencent Holdings Ltd, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital, Kaszek and Thrive Capital.

The acquisition of Easynvest has yet to be approved by the central bank and Brazilian antitrust watchdog Cade.

Reporting by Carolina Mandl; Additional reporting by Paula Arend Laier; Writing by Ana Mano; Editing by Steve Orlofsky and David Gregorio

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