Nubank will try to hit the IPO with stratospheric numbers by Brazilian standards. The bank’s initial objective, according to conversations with those involved in the preparations for the offer, is to seek funding between US$ 3 billion and US$ 5 billion, with a valuation between US$ 75 billion and (amazingly) US$ 100 billion, found the Pipeline .
To get an idea of the gigantism of these numbers, on the floor initially intended, it would mean being worth the same as Itaú and Banco do Brasil together, or the sum of Bradesco and Santander. At the top of this range, it would stick to Vale and, on the floor, Petrobras spends a few billion dollars at its current price.
The company was scheduled to do the confidential filing of the IPO with the SEC now at the end of August — the sources declined to comment, however, on whether this has already taken place. Listing can take place between the end of the third quarter and the beginning of the fourth quarter, at first.
The offer is coordinated by the banks Morgan Stanley, Goldman Sachs and Citi, as banks in the first line, and the company has already closed the other banks supporting the coordination. As it is an offer in the United States, Nubank did not call Brazilian banks for the selection process of coordinators, also using as a criterion the fact that they are competitors. It was for the latter that the American JP Morgan was also left out, as he became a relevant shareholder of the digital bank C6, the sources said.
In the second and third lines of coordination, Nubank’s criterion was to seek houses that have credit lines in the American market and/or relevant sectorial research, found the Pipeline.
A source close to the operation had already defined it as “the biggest IPO in recent times” for a Brazilian company, without indicating numbers. The market had already expected the Brazilian digital bank to start at US$ 45-50 billion in market value, but the numbers initially presented to people close to the operation were surprising – even though they depend, of course, on investor validation at the roadshow.
David Vélez, CEO of Nubank: sum of Itaú and BB? — Photo: Disclosure
Nubank hopes to get the numbers up, considering that it has more than 40 million customers in Brazil and that it has already set foot in other countries, such as Colombia, Argentina and Mexico — which could make it the first Brazilian bank in fact with a regional presence in retail. Thus, it increased its potential market geographically, as it has been doing in products, with the entry into segments such as insurance and investments.
In recent weeks, the bank has received criticism from competitors about high interest rates on its loan product. Executives who have had a relationship with the company recently also point to “a certain arrogance” emerging at fintech, arising from the proportions that the business has taken and the fact that other institutions are vying for their attention for partnerships and provision of services such as financial and legal advice. “It is normal that a bank created just eight years ago and that has conquered the space it has today causes discomfort”, counters a fan executive close to Nubank.
Despite Nubank’s initial intentions, the definition of an indicative range of price per share – and therefore of valuation and also funding – will be made after the roadshow process, when the bank can confirm its intentions or adjust them to investors’ expectations.