SoftBank appears to be backing away from investing in Brazilian digital banking startup Nubank. The Japanese conglomerate believed the $10 billion valuation that Nubank was seeking was too high, according to a person familiar with the matter.
SoftBank was considering investing $1 billion in the startup, which offers credit cards to people without bank accounts and was last valued at $4 billion in late 2018 following an investment by Tencent Holdings.
The investment the two companies were discussing would come from SoftBank’s new $5 billion fund focused on Latin American startups, which is separate from SoftBank’s tech-focused Vision Fund. The Latin American fund on Wednesday announced a $300 million investment in Brazilian corporate fitness startup Gympass, alongside the Vision Fund and other backers. SoftBank’s investment arms also have invested hundreds of millions of dollars recently in Colombian delivery startup Rappi and Brazilian logistics provider Loggi.
A SoftBank executive confirmed the talks, saying in a statement that “the conversation isn’t final yet.” Nubank said its discussions with a few investment funds were “preliminary,” adding that the firm “currently does not need additional capital to fund its operations.” It declined to comment on its valuation.
Since launching its first product in 2014, Nubank has risen to become the most valuable venture-backed firm in Latin America, according to PitchBook data. The company, which has more than 8.5 million active customers, says it has raised about $420 million from venture capital investors including Sequoia Capital, Founders Fund, Tiger Global Management and DST Global. Nubank’s rise has coincided with fast growth in electronic payments across the region, threatening incumbent financial institutions. —Alfred Lee contributed to this article.