Brazil-based digital bank Nubank has entered discussion with telecommunications and internet conglomerate SoftBank to lead an up-to $1bn funding round, according to Recode.
Nubank is targeting a valuation of $8bn to $10bn, with SoftBank expected to invest through its $5bn SoftBank Innovation Fund. Nubank is also considering a second offer to invest from an unidentified party.
Founded in 2013, Nubank offers debit and fee-free credit cards as well as loyalty programs aimed at the unbanked in Brazil, who can use their smartphone to manage their cards.
Financial services firms have implemented some of the most expensive borrowing costs in the world in Brazil, according to the Financial Times, and make customers enter through ultra-secure doors protected by armed security guards.
Nubank would reportedly use the funding to expand throughout Latin America, after the company announced last month it was entering Mexico. The company is also exploring additional financial products, including loans.
Nubank has raised more than $500m in funding to date. Internet group Tencent supplied $180m in October 2018 at a reported valuation of $4bn. Tencent invested $90m directly and purchased the remaining $90m through a secondary transaction from unnamed, existing shareholders.
DST Global led a $150m series E round in March 2018, with participation from Founders Fund, Redpoint Ventures, Ribbit Capital, QED Investors, Dragoneer Investment Group and Thrive Capital.
Nubank had earlier raised $80m in a series D round also led by DST Global in 2016, with commitments from Sequoia Capital, Tiger Global Management, Founders Fund and QED.
Nubank’s earlier funding came from Founders Fund, Sequoia, Tiger Global and Kaszek Ventures and angel investor Nicolas Berggruen.
