Brazil’s digital banking platform Nu Holdings adds 5.7 million new customers in Q2

Fintech unicorn Nu Holdings has added 5.7 million new customers in the second quarter of 2022.

The Brazilian digital banking platform now has 65.3 million people and businesses using its services.

Nu achieved 57% year-over-year customer growth in the second quarter — an upward trend from about 41.7 million in June 2021 — the company said in a second-quarter earnings release ahead of a conference call Monday.

“We had another very strong quarter, with growth and profitability in our core business. We recorded record revenues and are making great strides towards becoming a multi-product and multi-country platform,” said David Vélez, founder and CEO.

According to the published financial report, the latest growth comes mainly from its core products, including credit cards and personal loans – which reached 29 million and 4 million active customers respectively, pushing the company as the fifth largest financial institution in Brazil in terms of number of customers.

The growth also helped the company earn a new record $1.2 billion in Q2, up 230% year over year, according to the statement.

In July, when the digital banking company entered the crypto market by launching the Nucripto platform, it added 1 million users within three weeks of its launch.

According to a late July report from Blockchain.News, the firm had projected to reach the milestone within a year after launching Nucripto in May and making its crypto trading service available to 46.5 million users in June.

On May 11, 2022, Nubank launched an initial rollout of Nucripto, which allows cryptocurrency trading from R$1 (US$0.19). The company aims to democratize crypto in Brazil and in the rest of Latin America, the report added.

Nucripto was introduced to eliminate the complexity of the crypto market and to make it accessible to anyone who wants to be a part of it, according to Nubank.

The Nucripto platform allows users to sell and buy Bitcoin (BTC) and Ether (ETH) through a crypto trading and custody service powered by Paxos’ blockchain infrastructure.

In May, Nubank allocated approximately 1% of its balance sheet cash to Bitcoin to demonstrate its belief in crypto.

Nu said that 52.3 million or 80% of the total customers are active. According to the company, the total consists of approximately 63.3 million consumers and 2 million small and medium-sized enterprises (SMEs).

Currently, Nu’s largest market is Brazil, and customers grew 51% year-on-year in the second quarter to 62.3 million.

Besides Brazil, the company aims to expand to the neighboring countries of Mexico and Colombia, with around 2.7 million and 314,000 customers respectively. The company said in its earnings report that it added nearly 700,000 customers in those countries during the quarter.

“Our largest business – Brazil – is now profitable, having recorded a net profit of $13 million in the first half of 2022, driven by customer growth to 65 million and the ability to offer and cross-sell new products. Moving internationally, We are now number 1 issuer of new credit cards in both Mexico and Colombia – where we have just received a license approval to continue our expansion,” said Vélez.

The Block reported that the banking company’s revenue jumped 230% in the second quarter to $1.2 billion on a currency-neutral basis.

In terms of net loss, the company experienced a growth of $29.9 million in the second quarter. While it had seen $15.2 million in the same three months of 2021.

The company stated that this net loss result was due to “higher stock-based compensation and related tax effects in the quarter.”

However, the company’s core products reached 29 million, 45 million and 4 million active customers respectively in the second quarter of 2022. Nu’s core products include credit cards, NuConta and personal loans.

While the company’s gross profit was $363.5 million in the second quarter, increasing 109% year-over-year on a currency-neutral (FXN) basis. Gross profit margin was 31% in the second quarter.

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