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Berkshire Hathaway Just Invested in Another Fintech

By Matthew Frankel, CFP® - Jun 8, 2021 at 12:28PM

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The Warren Buffett-led conglomerate just bet on another foreign fintech start-up.

Berkshire Hathaway (BRK.A 1.32%) (BRK.B 1.27%) has had a difficult time finding places to put its money to work in recent years, and this has led to the company branching out into more tech-focused investments.

One area that is a natural fit for Buffett and his team is financial technology, or fintech. Banking has long been a favorite industry of Buffett's, and that's obvious in the company's massive stock portfolio -- in fact, Bank of America (BAC 0.74%) is Berkshire's second-largest investment.

So, when looking to branch out into newer technologies, the financial sector certainly makes sense. We've already seen fintech investments from Berkshire such as Brazilian payment processor StoneCo (STNE 5.48%) and India-based mobile payments company Paytm, and we just learned that another has been added.

Two young women paying for purchases with credit card.

Image source: Getty Images.

Berkshire's latest fintech investment

It was reported on Tuesday that Berkshire has invested $500 million in another Brazilian fintech start-up called Nubank, which is best known for issuing credit cards. Nubank, which is private, raised a total of $750 million in new funding (including Berkshire's) at a valuation of $30 billion. 

Nubank currently has 40 million customers and plans to expand its operations into Mexico and Columbia, and there have previously been rumors that the company is eyeing a U.S. IPO in the not-too-distant future.

StoneCo has been a highly successful investment for Berkshire, up by about 160% from the $24 share price Berkshire paid at the time of the fintech's late-2018 IPO, and Berkshire is clearly hoping for a repeat of its initial success in the Brazilian fintech market.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Matthew Frankel, CFP owns shares of Bank of America and Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Stoneco LTD. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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Stocks Mentioned

Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$300.25 (1.27%) $3.78
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$451,171.13 (1.32%) $5,869.14
Bank of America Corporation Stock Quote
Bank of America Corporation
BAC
$36.18 (0.74%) $0.27
StoneCo Ltd. Stock Quote
StoneCo Ltd.
STNE
$11.93 (5.48%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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