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Tencent- & Berkshire Hathaway-backed neobank NuBank trims IPO to ~$47B valuation
Hot Latin American neobank $Nu Holdings (NU.US)$ scaled back its upcoming U.S.-Brazilian dual-listing IPO Tuesday, estimating the go-public deal will now value the $TENCENT (00700.HK)$- and Berkshire Hathaway $Berkshire Hathaway-A (BRK.A.US)$ $Berkshire Hathaway-B (BRK.B.US)$-backed firm at $47.1B − $3B less than originally expected.
NU wrote in a revised F-1 filing with the U.S. Securities and Exchange Commission that it now expects the bank’s Class A shares will fetch $8 to $9 apiece, down from the $10-$11/share that the firm previously forecast.
And while NuBank reiterated plans to sell as many as roughly 289.2M Class A shares through the offering, the firm scaled back and modified terms of underwriters’ overallotment options.
Whereas certain of NU’s pre-IPO investors had previously planned to offer some 43.4M Class A shares for overallotments, the bank has instead granted underwriters the option to buy roughly 28.6M such shares directly from the NuBank itself.
The neobank also disclosed for the first time that a virtual who’s who of A-list investors have expressed non-binding interest in collectively buying $1.3B of its Class A IPO shares.
Purchasers include major pre-IPO backers Sequoia Capital and Tiger Global Management, along with entities affiliated with or managed by Baillie Gifford, Dragoneer, Invesco, Morgan Stanley, Sands Capital Management and SoftBank.
The company also plans to make some $32.2M of Brazilian Depositary Receipts (or "BDRs") available to employees and institutional investors, while also using some for a customer-loyalty program. The BDRs, which will trade on the Brazilian Stock Exchange, will be worth one-sixth of a Class A share apiece.
Additionally, NU reiterated plans to have Class B shares for company co-founders David Osorno, Cristina Zingaretti Junqueira and Adam Wible or their affiliates. Each Class B share will have 20 votes vs. one vote per Class A share, giving the founders some 86.9% of the company’s voting power − including 75% just for Osorno, who’s also the bank’s CEO.
All told, NuBank now expects to have some 4.6B Class A and B shares outstanding following the offering. That will value the company at about $36.9B to $47.1B on a non-diluted basis, depending on how many overallotment shares underwriters buy and where the IPO prices within its forecast range. By contrast, the IPO’s initial terms put NU’s non-diluted value at up to $50B.
Eight-year-old NuBank has been shaking up Latin America’s financial-services industry by running a digital-first operation that offers consumers credit cards, personal loans, life insurance and more. The popular bank has more than 48M customers in Brazil, Colombia and Mexico.
In addition to Sequoia Capital and Tiger Global, NU’s other major pre-IPO backers include Tencent and DST, while Warren Buffett’s Berkshire Hathaway invested $500M in June.
NuBank wrote in its revised F-1 that it expects to net some $2.4B if the IPO prices at a midpoint $8.50 a share, rising to about $2.6B if underwriters fully exercise their overallotment options.
The bank said it plans to use the money for working capital, operating expenses, capital expenditures, possible acquisitions and other general corporate purposes.
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emirsway : This valuation is ridiculous.
A bank with low revenue and zero profit valuing more than Brazil’s largest bank, that profits more than 6 billion U$ (P/E -~7).
Sweety Reality : Berkshire is in on a lot of startups as of late .
Timothy Roberts : The float is way too big.
643YVeALhF : Ut seems like another STNE type of ipo...different business model( pmt vs. banking) but the same idea.
Selected one : I will stick buying BRK.B SAN and APPLE.
Lashell Liffick Selected one : San? Its a dog with fleas
Hotbuns : Berkshire sells OOTM Calls on their stock for income.
They're desperate.
Muriel Melber Hotbuns : What’s wrong with selling otm calls? If it hits your strike price you get paid at that higher price plus the premium
Wall Street newbie : Has Berkshire divested their STNE holdings?
Barney Tamminen Wall Street newbie : no they are still holding