Friday Briefing: Nubank and Mercado Libre post mixed 2021 financial results

February 25, 2022

#TopStory 🔝

Nubank and Mercado Libre post mixed 2021 financial results

Nubank and Mercado Libre (MeLi) published 2021 financials this week, and while both reports gains in revenue, they remained in the red, in a reflection of the complex macro conditions weighing on their markets.

Nubank said its net loss was 3.6% smaller than a year earlier as revenue grew 130% to $1.7 billion. However, investors expected better numbers.

Nubank’s shares tumbled following the earnings report, falling 14.5% . They recovered the following day, rising to $7.7 per share, though remain below the $9 level at which they debuted on the New York Stock Exchange in December.

“Revenue was expected to improve this quarter and ended a notch below forecasts,” said Itaú BBA in a report.

Meanwhile, Argentine e-commerce giant MeLi ended the year  with a pre-tax loss of US$33.9 million, an improvement on the US$44 million loss in 2020.

Mercado Pago and Mercado Crédito, part of MeLi’s fintech business, continued to grow: processed payments rose 52% to US$24.2 billion while transactions increased 56%.

Mercado Crédito tripled the size of its portfolio to US$1.7 billion, with more than 7.4 million borrowers at the end of 2021.

Pedro Arnt, Mercado Libre’s CFO, said challenges last year included “the changing restrictions derived from the pandemic and macroeconomic changes, in a highly competitive environment.”

Nu obtains license for savings accounts in Mexico

The Brazilian neobank received authorization from the Mexican regulator to expand its business, obtaining a license to operate as a microfinance entity that can offer both savings and loan products.

Nu reported impressive customer growth in Mexico, rising 1,243% last year to reach 1.4 million.

#Cripto 💸

Fluyez backtracks after calling itself a “CryptoBank”

Peruvian cryptocurrency exchange Fluyez made headlines in the local press by declaring itself the country’s first “CriptoBank” and saying it has a license from the industry regulator SBS. However, the SBS issued a statement pointing out that Fluyez is registered as a foreign exchange bureau and isn’t authorized to offer banking services. The startup later said it would stop referring to itself as a bank.

Belo launches its crypto prepaid card

Belo, a crypto fintech, introduced a prepaid card in partnership with Mastercard that will convert Argentine pesos into cryptocurrencies automatically during purchases. The firm issued 1,000 cards and added a 21% cashback incentive. Users can choose between bitcoin, ether, DAI, USDC, and USDT.

#Investments 💵

Chile’s Fynsa to create US$50m venture capital fund

Chilean fund manager Fynsa will next month launch Venture Debt, an investment fund that seeks to raise US$50 million to finance fintechs and startups in Latin America.

Tpaga raises US$10m in investment round

Colombian digital wallet Tpaga closed a series A investment round for US$10 million and will use the proceeds to hire more staff and acquire more customers. The fintech has raised US$15.1 million since its inception in 2017, and aims to reach 5 million users in the coming months.

Klimber receives funding from Swiss Re

Argentine insurtech Klimber received financial backing from reinsurance giant Swiss Re. The undisclosed amount is part of a series A pre-round. The insurtech operates in Argentina and is looking to further expand its Mexico and Brazil businesses.

#Acquisitions 🛒

SoFi Technologies signs deal to buy Technisys

San Francisco-based fintech SoFi Technologies has inked an agreement to acquire Technisys, an Argentine digital-banking platform. The transaction is expected to close in the second quarter. The companies have a combined 89 million accounts in markets including the U.S., Mexico and Colombia, and the deal accelerates SoFi’s plans to expand in the region.

#People 🙋‍♂️

Thunes appoints vice president for LatAm

B2B payments fintech Thunes has named Jenna Wyer vice president for Latin America as it seeks to boost growth and forge alliances with the main digital payment media in the region.

Wyer previously sat on the board of the Money Services Business Association, a U.S. trade association for the non-bank financial services industry.

Yape hires new CEO

Raimundo Morales, a former partner at McKinsey & Co., was named CEO of Yape, the digital payments platform owned by BCP (Banco de Crédito del Perú). Yape told iupana last year about its plans to become a
superapp.

#iupanaExclusive 🔥

Bancolombia and other regulated entities participate in crypto pilot

Is there a crypto-payment boom coming in Latin America? Traditional entities such as Bancolombia and Banco de Bogotá are preparing for it. The starting point is to test (with the supervision of the regulator) the exchange of cryptocurrencies and Colombian pesos between banks and trading platforms.

• Bancolombia is closely following the behavior of crypto.

•  Initial operations in the sandbox reveal strong user demand.

•  Players agree that the pilot is a preamble to a possible crypto law in Colombia.

 Find out more in this week’s iupana Exclusive.

#Four questions with… Tomas Bercovich

How do you see the future of digital wallets in Latam?

The future of digital wallets, in the next 5 or 10 years, is the connection between them; that they’re all connected to make instant national and international transfers.

What is the next challenge of digital wallets in Latam?

It’s to properly monetize their services, which are mostly free and are very well received. The problem is that they don’t have a business model behind them that supports the organization and can provide profitability in the future.

Your company is dedicated to digital remittances. In your experience, what can
fintech offer this sector?

They mainly bring speed, transparency and low costs to the process. Unlike traditional companies with which the user does not feel a true connection, fintechs care much more about the customer experience.

What was the piece of advice that really impacted your career?

When I first started in the world of entrepreneurship, a colleague gave me the best advice: “Surround yourself with more experienced people in order to make the fewest possible mistakes.

Over and out