Brazil’s Nubank buys Advent-backed broker Easynvest

SAO PAULO (Reuters) - Brazilian financial startup Nubank decided to acquire broker Easynvest as part of a plan to become a full-service financial provider, Nubank’s founder David Velez said on Friday

FILE PHOTO: The logo of Nubank, a Brazilian FinTech startup, is pictured at the bank's headquarters in Sao Paulo, Brazil June 19, 2018. Picture taken June 19, 2018. REUTERS/Paulo Whitaker

The move illustrates growing competition among the country’s five biggest lenders - which account for more than 80% of Brazil’s deposits – with newer platforms such as those from XP Inc, BTG Pactual and Guide already luring billions of reais in savings.

“Since its foundation, Nubank wanted to offer a full-service financial platform because we see much inefficiency in the banks,” Velez said in an interview.

A growing mass of retail customers is shifting from certificates of deposit to trading stocks in Brazil due to historically low interest rates that have affected yields.

With roughly 30 million clients, Nubank is mainly known for its no-fee credit cards.

Nubank agreed on a cash-and-stock deal for Easynvest, Velez said, without disclosing a price. U.S. private equity firm Advent International has been a prominent Easynvest shareholder since 2017.

Velez said Easynvest will not target the wealthy clients already serviced by the country’s biggest platforms, but instead will use only digital channels to sell investment products, without brokers.

Easynvest, which has 1.5 million customers according to Nubank, is the digital bank’s third acquisition in 2020.

Velez said the integration with Easynvest is likely to take more than a year. Besides extending investment offers to Nubank clients, Velez said the company sees opportunities to grow lending to micro entrepreneurs and also in non-financial services, although he did not elaborate.

Nubank’s founder added the fintech may expand to other countries, although a planned launch in Argentina was postponed due to the country’s economic downturn. It also offers credit cards in Mexico.

In June, Nubank concluded a new funding round of $300 million, with five of its existing investors. Nubank’s current shareholders include TCV, Tencent Holdings Ltd, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital, Kaszek and Thrive Capital.

The acquisition of Easynvest has yet to be approved by the central bankand Brazil’s antitrust watchdog Cade.

Reporting by Carolina Mandl; Additional reporting by Paula Arend Laier; Writing by Ana Mano; Editing by Steve Orlofsky and David Gregorio