Wednesday, January 26

Warren Buffett is seduced by emerging fintechs

Nubank, the Brazilian neobank backed by Warren Buffet himself, a profitability of 11 percent is noted since its Wall Street debut on December 8.

Already the first day it started trading on Wall Street allowed to verify the interest that had aroused among investors, beyond well-known names, closing its first day with a rise of 15 percent.

Capitalization it was close to 48,000 million dollars, becoming the most valuable bank in Latin America.

And it is that Ita├║, the largest listed bank in Latin America, has a market value of 37.7 billion dollars and Bradesco, 33.3 billion.

With the sale of shares in New York, Nubank sought to raise 2.6 billion dollars to “use it for general corporate purposes, such as working capital and operating expenses.”

Caught the attention of Warren Buffett

The oracle of Omaha has acknowledged on several occasions that it regretted not having invested in the technology sector. But one learns from mistakes, the investor who for a couple of years has been taking positions in technology through its investment arm Berkshire Hathaway must have thought.

Between theThe latest interests have focused on fintech companies in emerging countries, specifically in Latin America, where the strongest bet has been Nubank.

In the first quarter, the neobank closed a financing round with notable success, which led to another two expansions. In one of these, he managed to capture 500 million dollars (410 million euros) from the US investor.

With 40 million customers, Buffett saw an opportunity to keep his investments on the cutting edge since with his bet on Nubank he ensured, on the one hand, participate in the continuous digitization of financial services and, on the other hand, participate in a business with potential growth Since of the 200 million inhabitants in Brazil, 16 million still do not have a bank account.

In addition, Nubank has signed agreements with WhatsApp to include WhatsApp Pay.

Buffet is also present in India

The Indian fintech have also caught Buffet’s attention. Specifically, a company dedicated to payments, Paytm.

So much Warren Buffett, Alibaba y SoftBank they invested in this company. Buffett did so in 2018 after acquiring a 3 percent ($ 300 million) stake that has risen 70 percent in value.

The company prepares its debut on the stock exchange with a valuation of 20,000 million dollars in what will be the largest public offering in India. Investment banks, including Goldman Sachs, are working on the deal.

The application connects more than 230 banks and 20 third-party apps without forgetting that it is putting cash aside, in a country that, until the arrival of the pandemic, bank digitization and its use was almost residual.

Snowflake’s background

Even if Buffett has always been known for being a cautious investorBy prioritizing value companies, it is gradually incorporating technology and growth companies into its portfolio. And it is doing so with remarkable success.

One of the most successful bets was the entry into Snowflake, a company specialized in big data solutions and cloud computing, which benefited from the outbreak of the pandemic and the commitment to telecommuting.

Buffet has a company stake of $ 730 million that it managed to duplicate on the same day of its debut on the stock market. The company’s shares have recorded a gain since September 2020 of 183 percent on the stock market. The price of its shares move in the 347 dollars.

Likewise, these operations represent a change in Buffett’s strategy, since since the mid-1950s he had not invested in companies that had just started on the stock market.