Brazilian Fintech Disprutor Moves into Business Banking
The five-year-old fintech is already to six largest credit card issuer in the country and is now trialling services for small businesses to get a better feel for market and customer demands.
Brazilian fintech NuBank is expanding to offer banking to small businesses. Already a leader in the personal banking sector, the start-up is expanding to offer their payments and processing systems to small enterprises.
Founded in 2014 as a credit card provider, NuBank was a disruptor in the Brazilian market which has traditionally been dominated by five major institutions. It is now the sixth largest credit card issuer in Brazil, and has expanded into high interest savings as well as direct deposits and services such as bill payments.
Building on this success, they are now planning on facilitating financial services for business customers. A statement on Tuesday said that they would be focussing on self-employed and indvidual microentrepreneurs. The initial customer base will be around 10,000 customers who are sole owners of their business and an exisiting NuBank customer.
Although starting small, the potential for growth is large, with around 20million registered businesses in Brazil. "It's a market with intense competition that requires a different understanding of what Nubank has today," says Carlos Daltozo, director of variable income at financial analysis house Eleven Financial.
"We do not pretend to serve large companies, with more sophisticated needs," says Cristina Junqueira, co-founder and vice president of Nubank. "Our goal is to serve well the micro and small segments, the vast majority of the corporate universe and a very neglected public."
Goldman Sachs is one of the main institutional investors in NuBank. They've given financing of up to US$120million for the company's credit portfolio. The next markets in NuBank's sights include Colombia and Mexico.