Nubank announces layoffs in Brazil
Nubank announces layoffs in Brazil, dLocal co-founder returns amid company woes, and SoFi launches “Student Loan Verification” service
Hi!
Fridays are for the “On The Tape” and “The Compound and Friends” podcasts, so let’s quickly wrap this week with the latest Fintech news and put the AirPods on:
Nubank announces layoffs in Brazil,
dLocal co-founder returns amid company woes, and
SoFi launches “Student Loan Verification” service
Thank you for reading and have a fantastic weekend!
Jevgenijs
Nubank Announces Layoffs in Brazil
Nubank (NYSE: NU) announced restructuring of its operations department in Brazil, which will result in elimination of 296 positions. The restructuring aims to consolidate independent products teams, to ensure “comprehensive customer service and scalability with an integrated management approach for all products and services.” Several groups of employees have already been or will be internally reassigned to other roles and teams, and no further redundancies are planned, according to the company’s announcement.
In the first quarter of 2023, Nubank reported a Net income of $141.8 million, and $2.4 billion in cash and cash equivalents in access of the regulatory capital requirements. The company is well-capitalized and continues to grow both in Brazil, as well as in its new markets, Mexico and Colombia. In the first quarter of the year, revenue increased 85% YoY to $1.62 billion, while loan portfolio rose 54% YoY to $12.8 billion and deposits rose 25% YoY to $15.8 billion. Nubank added 4.5 million customers, finishing the quarter with 79.1 million customers across Latin America.
Earlier in the week, Nubank announced reaching a milestone of one million savings accounts in Mexico, just one month since launching the product. Deposits in these accounts reached 1 billion pesos ($58 million), with 90% of the funds kept in Nubank's "deposit boxes" which offer a 9% annual return. Nubank's Mexican arm, Nu Mexico, opened a waiting list for these savings accounts in November and officially launched them in May. Nubank has already onboarded 3.2 million customers in Mexico, and claims to be the largest credit card issuer in the country.
✔️ Nubank pulls first mass layoffs, branded as “restructuring”
✔️ A reestruturação da área de Operações do Nubank no Brasil
✔️ Brazil's Nubank hits one million accounts in Mexico in one month
dLocal Co-Founder Returns Amid Company Woes
Uruguayan Fintech company dLocal (NASDAQ: DLO) announced that its co-founder, Sergio Fogel, is returning to an operational role as the company’s Co-President and Chief Strategy Officer. Fogel’s return, which signals an effort to restore investor confidence, comes after Dlocal's stock plummeted due to an investigation in Argentina and a report from a short seller Muddy Waters. Despite recent company’s challenges, Fogel stated that there are no immediate plans for further senior management changes, and he will continue to serve on the board of directors.
Last week, dLocal stock plummeted 24.2% after Argentine news outlet Infobae reported that the payments company is being investigated by the country’s government. According to Infobae sources, dLocal was being investigated for an illicit transfer of $400 million outside of the country through a network of subsidiaries. Argentina imposed capital controls in 2019 in a bid to support its currency and prevent further decline of foreign exchange reserves. The company first denied, but later confirmed an information request from the Argentine officials.
In November last year, dLocal faced allegations of fraud by the short-seller Muddy Waters Research. The company’s stock was cut in half after Muddy Waters published its report accusing the company of inflating reported payment volume numbers, booking conflicting inter-company transactions, and back-dating accounting entries to reflect stock transactions by the founders. Yesterday, dLocal held an investor day for analysts and institutional investors in New York. Let’s see if this investor day results in stock upgrades or downgrades.
✔️ dLocal Appoints Sergio Fogel as Co-President and Chief Strategy Officer
✔️ Dlocal Co-Founder Fogel Takes Bigger Role as Stock Gyrates
✔️ Report of Argentina fraud probe sinks shares in dLocal
✔️ dLocal issues response to the press article allegations
SoFi Launches Student Loan Verification Service
SoFi (NASDAQ: SOFI) announced launching “Student Loan Verification”, a service which allows employers to match employees' student loan payments with contributions toward retirement plans. The service assists employers in linking employer retirement contributions to employee student loan repayments, and enables employees to maximize their retirement plans through 401(k) or 403(b) contributions while still making progress in repaying their student loans. The aim is to help employees pay off their student debt while also saving for retirement.
The service works in collaboration with financial groups and record keepers to verify eligible student loan payments and facilitate retirement matching contributions. Employers only need to determine employee eligibility based on student loan debt balances, and SoFi will take care of the rest, including “plan design, data security, and reporting.” “Student Loan Verification” service is offered by “SoFi at Work”, SoFi’s division which partners with over 1,000 organizations to offer a range of financial benefits and tools designed to improve employees' financial wellness.
SoFi stock has been rallying after the debt-ceiling deal, struck by the White House and House Republican leadership, put an end to the freeze on student loan payments. The freeze was introduced at the onset of the COVID-19 pandemic as a relief program for over 40 million borrowers. Speaking at the Piper Sandler Fintech Conference on Wednesday, SoFi’s CEO, Anthony Noto, estimated the addressable market for SoFi’s student loan refinancing product at $200 billion, with people looking to lower their rate or extend the loan term.
✔️ SoFi at Work Launches Student Loan Verification Service To Help Employees Pay Off Student Debt
✔️ Debt Ceiling Deal Would End Freeze on Student Loan Payments. Sofi Stock Jumps
✔️ Restart of Student Loan Payments Included in Debt-Ceiling Deal
✔️ Buy SoFi Stock, Analyst Says. Sellers Have Got It Wrong
It is not only SoFi’s stock that is rallying lately. Thus, Upstart (NASDAQ: UPST) is up 152.39% and Affirm (NASDAQ: AFRM) is up 88.69% since May 1, 2023. Could it be that the rally SoFi’s stock price has nothing to do the end of the student loan repayment moratorium? 🤷🏻♂️
Director, Product - Member Programs
@ SoFiMultiple locations in the United States
Director, Product Management - Credit Card
@ SoFiSeattle, WA or San Francisco, CA, United States
Principal Product Manager, SoFi Money
@ SoFi
Seattle, WA, San Francisco, CA, or Remote, United States
Business Development Manager - USA
@ dLocal
Remote, United States
Head of Operations - Africa
@ dLocalRemote, Nigeria
Cover image: Microsoft Bing Image Creator, Powered by DALL·E, prompt “a Brazilian is let go, looks sad, pop art style”
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.