Indeed, a company owned by Warren Buffett has made a $500 million investment in a Brazilian Digital Bank known as Nubank. While this might be a bit ironic, it’s actually quite impressive when you think about how the market can re-shape someone’s opinion about a certain subject as well as how they see digital currencies as a whole. The growth of the cryptocurrency market simply cannot be ignored, and this is the case with Buffett as well.
Brazilian digital bank Nubank has secured a $750 million extension to its Series G round led by Berkshire Hathaway, which actually bought $500 million in shares,
If you haven’t been following the news in a while, here’s how the story goes. Warren Buffet told CNBC last year that “Cryptocurrencies basically have no value and they don’t produce anything. In terms of value: zero. I don’t have any cryptocurrency and I never will.”
On Tuesday, Warren Buffett’s Berkshire Hathaway made a $500 million investment in the parent company of Nubank, a privately held digital bank based in Brazil. This is despite the fact that its billionaire owner has personally spoken out against cryptocurrencies in the past, numerous times in fact.
Discussing Nubank, it was founded in 2013. The company has 40 million customers, and the company’s CEO David Vélez said that an initial public offering is likely, however at this current time unplanned. He also mentioned that only half the people in the region of Latin America have bank accounts, with 21% of them using credit cards.
He stated, “No one thought it was possible to change the financial system, but we were always convinced that there was room for disruption and innovation and, more importantly, that customers deserved better service”.
Buffet is known for investing in financial firms, as traditional banks and insurance companies make up a huge chunk of Berkshire’s investment portfolio.
However, Buffet has sold almost all of his stake in Wells Fargo by the end of the first quarter.
Furthermore, over the last year, the multinational conglomerate has invested in more firms related to technology. This includes technology company Snowflake. It is important to note that Berkshire Hathaway holds billions of dollars of Amazon and Apple stock.
Nubank said that the investment that has been raised here will be used to expand its product offerings and introduce new solutions to its portfolio alongside maintaining its growth rate when it comes to market share.
The funding is also intended to go towards international expansion plans. The digital bank launched its first product in Mexico a year ago and it is one of the largest issuers currently of new credit cards within the country.
This investment is accompanied by a $250 million deal that includes domestic as well as foreign investors. Both deals were actually signed last Friday and put the company’s value at $30 billion.
Berkshire’s class B shares did not change much following the announcement and the stock has raised 25% year-to-date.
In any case, this announcement marks a big leap for the digital currency industry and showcases the interest in mainstream adoption of its technology.