By Vinod Sreeharsha
DST Global, the investment firm started by a Russian venture capitalist, Yuri Milner, has led an $80 million private investment in a Brazilian startup called Nubank. The new financing suggests that despite Brazil’s political and economic upheaval, the financial technology sector remains a bright spot.
Peter Thiel’s Founders Fund, QED Investors, Sequoia Capital and Tiger Global Management, all prior investors in Nubank, also joined the investment round, which closed in late November, David Velez, the company’s founder and chief executive, said in an interview.
New backers Redpoint and Ribbit Capital, which over the past six years have been two of Silicon Valley’s most active investors in Brazil, also participated. Velez did not disclose the private company’s current valuation.
The investment comes at a time when the broader financial technology sector in Brazil is gaining traction.
Recently, the online trading platform XP Investimentos, backed by the private equity firm General Atlantic, said it had acquired Rico, another online investment platform. It paid approximately 400 million reais, or $116.7 million, according to Isaias Sznifer, a principal at Greenhill & Co. in Brazil, the firm that advised Rico’s founding shareholders on the deal.
“We think there’s a lot of interest, both from local and international players in the space, and we expect to see a number of transactions in the full spectrum of fintech in the coming 12 to 24 months,” said Sznifer, a former Goldman Sachs vice president.
DST Global has been an active global investor in the segment known as fintech, although this is its first foray into Brazil. Milner started investing in internet companies in Russia and Eastern Europe more than a decade ago. In 2009, the firm, then known as Digital Sky Technologies, invested in Facebook. It became one of the social network’s largest owners before its initial public offering.
The firm also backed Twitter in 2011, before its initial public offering. Over the past several years, DST has invested heavily in the United States and China. Brazil was off the firm’s radar, until now.
Nubank provides a digital credit card for smartphones. It is looking to take customers away from Brazil’s highly profitable banks.
The startup, based in São Paulo, was founded in 2013, and it rolled out its credit card in 2014.
© 2016 The New York Times
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