DRS 1 filename1.htm

As confidentially submitted to the Securities and Exchange Commission on August 2, 2021.

This draft registration statement has not been publicly filed with the Securities and Exchange Commission and all information herein remains strictly confidential.

Registration No. 333-_____

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Nu Holdings Ltd.

(Exact Name of Registrant as Specified in Its Charter)

The Cayman Islands	7389	N/A
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)
	Campbells Corporate Services Limited, Floor 4, Willow House, Cricket Square, KY1-9010 Grand Cayman, Cayman Islands +1 345 949 2648
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Cognitect, Inc.
101 West Chapel Hill Street, Suite 300

Durham, NC 27705
+1 919 283 2748

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

Byron B. Rooney

Manuel Garciadiaz

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Tel: +1 (212) 450-4000

Donald Baker

John Guzman
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020

Tel: +1 (212) 819-8200

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered		Proposed Maximum Aggregate Offering Price⁽¹⁾⁽²⁾		Amount Of Registration Fee
Class A ordinary shares, par value US$ per share(3)	US$		US$
Brazilian Depositary Receipts, or “BDRs”		—		—	(4)

(1)

In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the proposed maximum aggregate offering price is not included in this table.

(2)

Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. Includes the aggregate offering price of additional Class A ordinary shares that the underwriters have the option to purchase. See “Underwriting.”

(3)

Includes Class A ordinary shares, initially in the form of BDRs, offered and sold outside the United States.

(4)

In the aggregate, the proposed maximum aggregate offering price of the Class A ordinary shares and the BDRs is estimated at US$ . Therefore, no additional filing fee is required for the BDRs being registered herein.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant will file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED , 2021

PRELIMINARY PROSPECTUS

Shape

Description automatically generated

Class A Ordinary Shares

Nu Holdings Ltd.

(incorporated in the Cayman Islands)

This is an initial public offering of Class A ordinary shares of Nu Holdings Ltd. We are offering Class A ordinary shares, including in the form of Brazilian Depositary Receipts, or the “BDRs,” each representing Class A ordinary share, and the selling shareholders identified in this prospectus are offering an additional Class A ordinary shares in a global offering, consisting of (1) an international offering and (2) a concurrent Brazilian offering. The international offering includes newly issued Class A ordinary shares being sold by us, and Class A ordinary shares being sold by the selling shareholders, in each case to be offered in the United States and other countries outside of Brazil. The concurrent Brazilian offering includes newly issued Class A ordinary shares in the form of BDRs being sold by us, in each case to be offered to the public in Brazil with a concurrent placement to investors located outside Brazil. The international offering is being underwritten by the international underwriters named in this prospectus, or the “international underwriters,” and the Brazilian offering is being underwritten by the Brazilian underwriters named in the Brazilian prospectus, or the “Brazilian underwriters,” and together with the international underwriters, or the “underwriters.” We will not receive any proceeds from the sale of Class A ordinary shares by the selling shareholders. The closing of this international offering is not conditioned upon the closing of the concurrent Brazilian offering, but the closing of the concurrent Brazilian offering is conditioned upon the closing of this international offering, and there can be no assurance that the concurrent Brazilian offering will be completed on the terms described herein or at all. A separate Portuguese-language prospectus relating to the concurrent Brazilian offering will be made available in Brazil.

Prior to this offering, there has been no public market for our Class A ordinary shares or BDRs. It is currently estimated that the initial public offering price per Class A ordinary share will be between US$ and US$ , which is equivalent to between R$ and R$ per BDR, respectively, based on the , 2021 exchange rate of R$ to US$1.00 published by the Central Bank of Brazil.

We intend to apply to list our Class A ordinary shares on the Nasdaq Global Select Market, or Nasdaq/New York Stock Exchange, or “NYSE,” under the symbol “NU.” We intend to apply to register the offering of our BDRs with the Brazilian Securities Commission (Comissão de Valores Mobiliários, or the “CVM”) to list and trade our BDRs on the São Paulo Stock Exchange (B3 S.A. – Brasil, Bolsa, Balcão, or the “B3”) under the symbol “ .”

Following this offering, we will have two classes of ordinary shares, Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares will be identical, except that (1) holders of Class B ordinary shares are entitled to 20 votes per share, whereas holders of Class A ordinary shares are entitled to one vote per share; (2) holders of Class B ordinary shares have certain conversion rights; (3) holders of Class B ordinary shares are entitled to preemptive rights in the event that additional Class A ordinary shares are issued in order to maintain their proportional ownership interest; (4) holders of Class B ordinary shares have certain consent rights and (5) Class B ordinary shares will not be listed on any stock exchange and will not be publicly traded. Immediately following the completion of this offering, all Class B ordinary shares will be beneficially owned by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, Adam Edward Wible or each of their permitted transferees, or, collectively, the “co-founders,” and such Class B ordinary shares will represent approximately % of the voting power, and % of the outstanding share capital, after this offering, assuming no exercise of the underwriters’ over-allotment option. For further information, see “Description of Share Capital.”

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and, as such, may elect to comply with certain reduced public company reporting requirements. In addition, following this offering, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq/NYSE and as such plan to rely on available exemptions from certain Nasdaq/NYSE corporate governance requirements.

Investing in our Class A ordinary shares and BDRs involves risks. See “Risk Factors” beginning on page 28 of this prospectus.

		Per Class A ordinary share(1)		Per BDR(2)		Total
Initial public offering price	US$		US$		US$
Underwriting discounts and commissions(3)	US$		US$		US$
Proceeds, before expenses, to Nu Holdings Ltd(4)	US$		US$		US$
Proceeds, before expenses, to the selling shareholders(4)	US$			—	US$

(1)

Excludes Class A ordinary shares to be offered and sold in the form of BDRs.

(2)

Based on the , 2021 exchange rate of R$ to US$1.00 published by the Central Bank of Brazil.

(3)

See “Underwriting” for a description of the compensation payable to the underwriters.

(4)

Assumes no exercise of the underwriters’ over-allotment option.

We and the selling shareholders have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to additional Class A ordinary shares, which Class A ordinary shares may, at the option of the underwriters, be represented by BDRs, to cover over-allotments at the initial public offering price, less underwriting discounts and commissions.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus (or the Portuguese-language prospectus used in connection with the offering of our BDRs in Brazil) is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Class A ordinary shares to purchasers on or about , 2021.

Global Coordinators

Morgan Stanley

Goldman Sachs & Co. LLC

Citigroup

NuInvest

The date of this prospectus is , 2021.

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Page

Glossary of Terms	iii
Prospectus Summary	1
The Offering	13
Summary Consolidated Financial and Other Data	21
Risk Factors	28
Special Note Regarding Forward-Looking Statements	81
Presentation of Financial and Other Information	83
Use of Proceeds	87
Dividend and Dividend Policy	88
Capitalization	89
Dilution	91
Exchange Rates	93
Selected Consolidated Financial Data	96
Management’s Discussion and Analysis of Financial Condition and Results of Operations	98
Regulatory Overview	140
Business	162
Management	195
Executive Compensation	204
Certain Relationships and Related Party Transactions	210
Principal and Selling Shareholders	213
Description of Share Capital	216
Description of Brazilian Depositary Receipts	238
Class A Ordinary Shares Eligible for Future Sale	244
Taxation	247
Underwriting	256
Expenses of the Offering	267
Legal Matters	268
Experts	268
Enforceability of Civil Liabilities	269
Where You Can Find More Information	271
Index to Consolidated Financial Statements	F-1

This prospectus has been prepared by us solely for use in connection with the proposed offering of Class A ordinary shares and BDRs in the United States and, to the extent described below, elsewhere outside of Brazil. None of us, the selling shareholders or any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. None of us, the selling shareholders or any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus or any applicable free writing prospectus is current only as of the date of this prospectus or of any such free writing prospectus, as applicable, regardless of its time of delivery or of any sale of our Class A ordinary shares or BDRs.

None of us, the selling shareholders or any of the underwriters have taken any action that would permit a public offering of our Class A ordinary shares or BDRs or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States or in Brazil in connection with the Brazilian offering. In addition, except for the Brazilian offering of BDRs being made under the Portuguese-language prospectus, we have not taken any action to permit a public offering of Class A ordinary shares or BDRs outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our Class A ordinary shares and BDRs and the distribution of this prospectus outside the United States and in their jurisdiction (including Brazil). However, we may make offers and sales outside the United States in circumstances that do not constitute a public offer or distribution under applicable laws and regulations. Our Class A ordinary shares and BDRs are being offered, and

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offers to purchase our Class A ordinary shares or BDRs are being sought, only in jurisdictions where offers and sales are permitted.

This prospectus is not addressed to Brazilian residents and it should not be forwarded or distributed to, nor read or consulted by, acted on or relied upon by Brazilian residents. Any investment to which this prospectus relates is available to non-Brazilian residents only and will be made by non-Brazilian residents only. If you are a Brazilian resident and received this prospectus, please destroy it and any copies. The Brazilian prospectus is in a format different from that of this prospectus and contains information not generally included in documents such as this prospectus.

You must comply with all applicable laws and regulations in effect in any jurisdiction in which you purchase, offer or sell our Class A ordinary shares and BDRs, or possess or distribute this prospectus and must obtain any consent, approval or permission required for your purchase, offer or sale of our Class A ordinary shares and BDRs under the laws and regulations in effect in any jurisdiction to which you are subject or in which you make such purchases, offers or sales, and neither we, the international underwriters nor the Brazilian underwriters will have any responsibility therefor.

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “Nu” or the “Company,” the “Issuer,” “we,” “our,” “ours,” “us” or similar terms refer to Nu Holdings Ltd., together with its consolidated subsidiaries. “Nu Holdings” refers solely to Nu Holdings Ltd. “Easynvest Companies” refers to the companies that are part of the Easynvest investment platform acquired by us in a transaction completed on June 1, 2021, namely Easynvest Holding Financeira S.A., Easynvest Título Corretora de Valores S.A., or “NuInvest,” Easynvest Participações S.A., Easynvest Corretora de Seguros Ltda., Easynvest Gestão de Recursos Ltda., and Vérios Gestão de Recursos S.A.

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners.

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Glossary of Terms

The following is a glossary of certain industry and other defined terms used in this prospectus:

“active customers” is defined as any customers that have generated revenue in the last 30 calendar days, for a given measurement period.

“activity rate” is defined as active customers divided by total number of customers as of a specific date.

“ANBIMA” means the Brazilian Association of Financial and Capital Markets Entities (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais).

“Boleto” (banking payment slips) means a printable document issued by merchants and used to make payments in Brazil.

“Brazil” means the Federative Republic of Brazil.

“Brazilian government” means the federal government of Brazil.

“Brazilian reais” or “BRL$” means Brazilian reais, the official currency of Brazil.

“B3” means B3 S.A. – Brasil, Bolsa, Balcão, the Brazilian Stock Exchange.

“CAC” means customer acquisition cost and consists of the following expenses: printing and shipping of a card, credit data costs, and paid marketing.

“CAGR” means the compound annual growth rate, measured as the annualized average rate of the growth between given dates, assuming growth takes place at an exponentially compounded rate.

“CDI Rate” means the Brazilian interbank deposit (certificado de deposito interbancário) rate, which is an average of interbank overnight deposit interest rates in Brazil.

“Central Bank of Brazil” means the Brazilian Central Bank (Banco Central do Brasil).

“Colombian pesos” or “COL$” means Colombian pesos, the official currency of Colombia.

“CMN” means the Brazilian National Monetary Council (Conselho Monetário Nacional).

“CNBV” means the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria de Valores).

“COPOM” means the Brazilian Monetary Policy Committee (Comitê de Política Monetária do Banco Central).

“cost of risk” is defined as the sum of change in loan loss provisions, credit losses and gross recoveries divided by total receivables.

“credit loss allowance expenses / credit portfolio” is defined as credit loss allowance expenses, divided by the sum of receivables from credit card operations (current, installments and revolving) and loans to customers, in each case gross of ECL allowance, as of the period end date.

“customers” are defined as an individual or SME that has opened an account with us and has not been charged-off, or blocked, or has voluntarily closed their account.

“CVM” means the Brazilian Securities Commission (Comissão de Valores Mobiliários).

“ECL” or “ECL Allowance” means the expected credit losses on our credit operations, including loans and credit cards.

“EUR” or “€” means the Euro, the official currency of the European Union.

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“founding shareholder” refers to our founding shareholder and chief executive officer, David Vélez Osorno.

“FX Neutral” measures refers to certain measures prepared and presented in this prospectus to eliminate the effect of foreign exchange, or “FX,” volatility between the comparison periods, allowing management and investors to evaluate our financial performance despite variations in foreign currency exchange rates, which may not be indicative of our core operating results and business outlook. For additional information, see “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures.”

“IASB” means the International Accounting Standards Board.

“IFRS” means the International Financial Reporting Standards, as issued by the IASB.

“interest-earning portfolio” consists of receivables from credit card operations on which we are accruing interest and loans to customers, in each case gross of ECL allowance, as of the period end date.

“Mexican pesos” or “MEX$” means Mexican pesos, the official currency of Mexico.

“monthly average cost to serve per active customer” is defined as the monthly average of the sum of transactional expenses and customer support and operations expenses (sum of these expenses in the period divided by the number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period).

“monthly average revenue per active customer” or “Monthly ARPAC” is defined as the average monthly revenues (total revenue divided by number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period).

“Net promoter score,” or “NPS,” measures the willingness of customers to recommend our products and services. See “Presentation of Financial and Other Information—Calculation of Net Promoter Score.”

“NuConta” refers to the Nu account offered to our customers.

“PIX” means the instant payment arrangement launched by the Central Bank of Brazil in 2020 that allows real-time payments and transfers.

“Purchase volume,” or “PV,” is defined as the total value of transactions that are authorized through our credit and debit cards only; it does not include other payment methods that we offer such as PIX, a payment system that allows real-time payments and transfers launched by the Central Bank of Brazil, WhatsApp payments and traditional wire transfers.

“real,” “reais” or “R$” means the Brazilian real, the official currency of Brazil.

“SELIC” means the Brazilian Special Clearance and Custody System (Sistema Especial de Liquidação e Custódia).

“SELIC rate” means the Brazilian interest rate established by the SELIC.

“Shareholder’s Agreement” means the shareholder’s agreement entered into in connection with this offering, among David Vélez Osorno, Rua California Ltd., and Nu.

“SIC” means the Colombian Superintendence of Industry and Commerce, a public authority and a technical agency attached to the Ministry of Trade, Industry and Tourism of Colombia.

“SMEs” means micro and small business accounts.

“squads” is the term used to refer to Nu teams that work within the same scope of operations, e.g. Controllership Squad, FP&A Squad, etc.

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“SUSEP” means the Brazilian Superintendence of Private Insurance (Superintendência de Seguros Privados).

“U.S. dollar,” “U.S. dollars” or “US$” means U.S. dollars, the official currency of the United States.

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Prospectus Summary

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A ordinary shares or BDRs. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus, before deciding to invest in our Class A ordinary shares or BDRs.

Overview

Our Mission and Vision

Our mission is to fight complexity and empower people in their daily lives. We are in the early stages of technology companies revolutionizing a broad range of services by putting the customer at the center of their strategy and using mobile and cloud-based models. We believe new technology-driven leaders will capture share from legacy providers, expand the size and addressable opportunities of their respective markets and operate with a fundamentally better customer experience and superior economics. In this increasingly digital and mobile world, we also believe there is a massive opportunity to use the latest technologies and business practices to create new and more user-friendly customer experiences for consumers and small businesses that are simple, intuitive, convenient, low-cost, empowering and human.

In 2013, we chose to begin our journey by disrupting the financial services market in Latin America, whose market value we estimate will reach approximately US$1 trillion by the end of 2021. This opportunity includes approximately 650 million people according to the World Bank, many of whom are underserved and deeply unsatisfied by their legacy bank relationships, or completely unserved. As we pursue our mission of empowerment, we are building a company that is focused on connecting profit to purpose in order to benefit all our stakeholders, creating much stronger communities where we operate.

Welcome to Nu

Nu is the largest digital banking platform in the world, outside of Asia, and one of the leading technology companies in the world, with 36.9 million customers across Brazil, Mexico and Colombia as of March 31, 2021. We built our business based on four core principles: (1) a highly curated customer-centric culture and approach that permeates everything we do; (2) the prioritization of human-centric design across all of our mobile-apps, products, services and interactions to create superior customer experiences; (3) the development of advanced proprietary technologies built from the ground up by some of the best talent from around the world; and (4) the utilization and optimization of powerful data science and proprietary models that support every aspect of our business. We combine these to create a self-reinforcing business model that we believe enables us to serve our ecosystem of customers and partners more effectively as we grow, and to generate significant and sustainable competitive advantages in the marketplace. Together, these have compounded since our founding to produce:

36.9 Million Customers -- Leadership in Digital Banking – As of March 31, 2021, we had 36.9 million customers, including approximately 22% of the adult population of Brazil, which is nearly as big as the combined customer bases of the next three largest digital banking platforms in the United States, Europe and Latin America, according to a November 2020 report published by Autonomous Research. We were also ranked as the #1 Bank in Brazil by Forbes for each of the past three years, the #1 Digital Banking App in the World by Pymnts.com in 2021, and Latin America’s Best Digital Bank by Euromoney in 2021.

Most Loved Brand in Brazil -- One of the Most Trusted Companies and Brands – By delighting our customers, we have created a powerful reputation and a valuable brand that is highly regarded in our markets and around the world. For example, we were listed in 2021 by TIME as one of the 100 Most Influential Companies in the world and by CNBC as one of the Top 50 Disruptors in the world. We were also ranked as the #1 Most Loved Brand in Brazil by eCGlobal in 2021.

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A Powerful and Expanding Ecosystem of Solutions and Services Across the Five Financial Seasons – We have developed a growing suite of essential and high frequency financial solutions designed to create superior customer experiences across the Five Financial Seasons of a consumer or SME customer’s journey. These include (1) Spending with our credit and debit cards, QR code-based and PIX instant mobile payments solutions, WhatsApp Pay and traditional wire transfers; (2) Saving with our NuConta personal and business accounts; (3) Investing with our direct-to-consumer NuInvest digital investment platform; (4) Borrowing with our transparent, easy-to-manage credit cards and personal loans with limits that grow over time as users build their credit histories with us; and (5) Protecting with our NuSeguros insurance solutions. We have also broadened our ecosystem by adding products and services from marketplace partners to our platform, such as insurance, mobile phone top ups, and foreign remittances, all under the Nu brand and with the same customer experience as with our proprietary products.

90 Net Promoter Score – A Highly Engaged and Loyal Customer Base – We have built a strong reputation with our customers for being fair, transparent, trustworthy and high-quality. In addition, we have developed a strategy to cultivate our customer relationships to foster new customer referrals and higher deposit and spending rates. As a result, we (1) acquired approximately 86% of our customers organically in 2020, either through word-of-mouth or a direct unpaid referral from an existing customer without incurring direct marketing expenses; (2) received a Net Promoter Score, or “NPS,” of 90 in Brazil, which far exceeds incumbent banks and all other major local financial technology companies; and (3) have become the primary bank for over 40% of our customers who have been with us for more than 12 months as of March 31, 2021.

Advantaged Unit Economics – We operate with favorable unit economics that enable us to (1) acquire customers organically at a very low cost and sustain low customer churn; (2) increase revenue per customer by growing our share of wallet and adoption of more products; and (3) expand gross profit per customer through increased operating, risk and funding efficiencies.

Compounding Growth at Scale – We have grown our customer base and our revenue at high annual growth rates. As of March 31, 2021, we had 36.9 million customers, which represents an increase of approximately 10x from 3.7 million as of March 31, 2018. Of these 36.9 million customers, approximately 69% were active as of March 31, 2021, defined as customers that generated revenue in the preceding 30-day period.

Our Unique Approach

We built our business using a unique approach that combines our four core principles to create a self-reinforcing business model that helps us nurture and grow our expanding ecosystem of consumers, SMEs, and marketplace partners, including:

Customer-Centric Culture – Since our company was founded, we have intentionally and consistently cultivated a customer-centric culture that is obsessed with delighting our customers. This culture is central to achieving our mission and we remain vigilant in preserving and nurturing it. The core values of our culture are:

We Want Our Customers to Love Us Fanatically – We design products and deliver experiences that delight customers, empowering them to take control of their financial lives.

We Think and Act Like Owners, Not Renters – We want all our employees to think like owners and treat the business and our customers like their own, which we believe is essential to creating long-term shareholder value.

We Are Hungry and Challenge The Status Quo – We have a culture of non-conformism that seeks to challenge and improve on the status quo, initially focused on reinventing traditional financial services.

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We Pursue Smart Efficiency – We aim to minimize waste in all of its forms to benefit all our customers. We believe in using technology to build proprietary systems that give us scalability while making sure we optimize the use of all the constrained resources we have as a company: our people, our time, our attention and our capital, among others. As we gain efficiency, we are able to pass those gains to our customers, continuously working to provide lower and lower prices.

We Build Strong and Diverse Teams – We believe that true creativity is bred in diversity in all of its forms, and have assembled a team of exceptional talent from around the world, who contribute their diverse experiences, preferences and perspectives to serve local markets. We appreciate diversity and value the importance of creating an inclusive workplace comparable to the community we serve, which we believe is a key driver of innovation.

Extraordinary Customer Experiences – We design everything we do to create a customer experience that exceeds expectations and delights our customers. This is driven by:

Mobile and Digital First – We focus on developing cloud-based mobile applications that provide our customers with a modern digital experience at their fingertips on any device.

Product Simplicity – We offer digital financial services products that are simple, transparent, accessible and easy to use.

Human-Centered Design – We design our solutions around the human perspective and seek to create a high-quality experience that is intuitive for our customers in everything we do.

Seamlessly Integrated – We create a seamless experience by using our Nu mobile app to provide our customers with easy and integrated access to all of our products and services.

Xpeers – We employ a highly trained support team of Xpeers, who focus on continuously improving the customer experience by leveraging customer interactions to enhance everything we do.

Advanced Technology – We use the latest technologies and modern tools to deliver a superior experience for our customers in a hyper-scalable and secure environment. We prioritize building our own technology and investing in engineering talent. The key components of our technology include:

NuCore Technology Platform – All of our products, services and operations are powered by NuCore, our proprietary, cloud-based core banking platform that we designed and built from the ground up. NuCore enables us to centrally manage several key functions, including transaction authorization and processing, core banking, regulatory reporting, business operations, customer services, credit underwriting and fraud prevention.

Microservices Approach – We use a versatile, decentralized technology architecture to manage and deploy over 500 modular microservices that we have developed. This advanced technology strategy enables us to scale, launch new products, enter new markets, and maintain and evolve our codebase incrementally with decentralized ownership.

Immutable Architecture – We have created an advanced, immutable ledger, utilizing the Datomic database technology we developed. This provides us with a highly reliable audit trail and transaction history that we believe provides better accuracy, control, reliability and transparency versus traditional database architectures.

World-Class Software Engineers – We have attracted excellent software engineers from around the world who are drawn to our advanced technology strategies and want to code at a cutting-edge level using Clojure, the advanced programming language that we sponsor following our acquisition of Cognitect, Inc., or “Cognitect,” a U.S.-based software consultancy whose founders created the language.

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Proprietary Data Science – We acquire, store and analyze an enormous amount of data that we use to inform our decision making, reduce risks and improve the customer experience. Our data science strategy consists of:

Proprietary Data – On average, we collect more than 5,000 data points on each active customer, which we use to better understand their behavior, risks and financial needs to better serve them across their lifecycle with Nu.

Powerful Credit Engine – Our in-house, proprietary credit underwriting engine learns from customer behavior, enabling us to develop curated credit strategies to offer customers the best product for their specific financial situation.

Artificial Intelligence and Machine Learning – We utilize a combination of proprietary and best-of-breed machine learning algorithms and artificial intelligence tools to continuously improve our underwriting, customer experience, risk management and operations.

Self-Driving Ecosystem – We integrate all data in our Nu Ecosystem to develop a holistic profile of our customers, enabling us to algorithmically recommend products in real time that may meet specific customer needs throughout their financial journey. Our Nu Ecosystem is illustrated in the graphic below:

Stakeholder Impact

Since our founding we have had a deep focus on creating a positive, long-term impact for our stakeholders, including our customers, employees, shareholders, regulators and society. We believe we have saved our customers from spending countless hours of waiting time inside a bank branch and hundreds of millions of dollars in banking fees that would have gone to incumbent banks rather than remaining in the pockets of our customers. We are redefining how customers can and should be treated when consuming financial services, often compelling traditional providers to up their own game and unlocking enormous value to society. Our strong focus on impact allows us to recruit and retain the best talent and diverse teams, ensuring that we have the depth of perspectives to design the best human-centered customer experiences. We believe we have strong alignment with regulators and are committed to ethical and transparent relationships with public officials as we work to improve how people are served by financial services companies.

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Our Market

Overview

Latin America is one of the largest and most dynamic regions in the world, with a total population of 652 million people as of December 31, 2020 and GDP of US$4.5 trillion in 2020 according to the World Bank. We currently operate in Brazil, Mexico and Colombia, which collectively account for 60% and 61% of the region’s population and GDP, respectively. These markets remain significantly underpenetrated with respect to financial services compared to developed economies, as demonstrated by the large number of adults that remain unbanked, the relatively low level of household debt and the relatively low adoption of credit cards.

Our Market Opportunity in Latin America

The serviceable addressable market, or “SAM,” includes the business lines we currently operate in Brazil, including revenue from retail credit (defined as the interest income net of funding costs and credit charges), investments, payments and insurance brokerage. The revenue potential of the retail financial services amounted to US$101 billion in 2020 and is projected to grow at a 5% CAGR to US$129 billion by 2025, according to a report commissioned by us and published by management consulting company Oliver Wyman Consultoria em Estratégia de Negócios Ltda., or the “Oliver Wyman Report.” Our revenue of US$737 million in 2020 accounted for less than 1% of this SAM, demonstrating the massive opportunity ahead.

The total addressable market, or “TAM,” represents the total potential opportunity across all of Latin America, including marketplace revenue, defined as take rate fees derived from e-commerce marketplace gross merchandise volume. The retail financial services and marketplace revenue opportunity amounted to US$186 billion in 2020 and is projected to grow at a CAGR of 8% to US$274 billion by 2025, according to the Oliver Wyman Report.

A Market that is Ripe for Disruption

Consumers and SMEs in Latin America have long faced a banking system with substantial challenges that create attractive opportunities for disruptors, including:

Highly Concentrated Banking Sector – The banking sector in Latin America is highly concentrated, controlled by a small number of incumbent financial institutions in each country.

Lack of Competition – Given its highly concentrated nature, the Latin American banking sector has long-suffered from a lack of competition, allowing incumbents to achieve some of the highest returns on equity, or “ROEs,” in the world by charging high interest rates and fees.

High Cost-to-Serve – The incumbent banks in Brazil have large and expensive branch distribution networks supported by large workforces and antiquated legacy systems.

Addressable Market Opportunities

As we serve our customers through the Five Financial Seasons of spending, saving, investing, borrowing and protecting, we believe we will benefit from and continue to be a catalyst for:

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as of 2017, according to the World Bank. In Colombia and Mexico, the unbanked population in 2017 stood at 55.1% and 64.6% of the 40 million and 96 million people aged 15 and above, respectively, according to the World Bank. Together, these three countries account for 134 million unbanked adults, according to the World Bank.

Favorable Regulatory Environment – Regulators in Latin America are promoting several initiatives to foster financial technology disruption to increase competition and financial inclusion.

Our Competitive Strengths and Advantages

The strengths generated by our core principles and our self-reinforcing model provide us with powerful competitive advantages that have enabled us to disrupt the legacy models of incumbent providers to become the largest digital banking platform in Latin America. We believe we are positioned favorably to continue to grow our business with attractive economics and expand our addressable market. We believe these advantages are difficult to replicate and will continue to strengthen as we scale, compounding over time.

We Have Significant Market and Leadership Advantages

Over the past eight years, we believe we have built one of the largest, most influential, and trusted technology companies in the world. This privileged leadership position provides us with several key advantages, including:

First Mover Advantage – We were the first digital-native banking platform in Brazil and a pioneer in digital financial services globally.

Trusted and Recognized Global Brand – We have created a globally recognized brand and market position across the digital services and technology landscape, which have built trust and product awareness that have helped us rapidly grow our customer base, retain our customers and drive greater product adoption. In 2021 we were named as one of the TIME 100 Most Influential Companies, one of the CNBC Disruptor 50, Latin America’s Best Digital Bank by Euromoney and the #1 Digital Banking App by Pymnts.com.

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We Have Significant Operating and Financial Advantages

Our all-digital and data driven business model provides us with significant advantages, which have enabled us to scale and operate in a highly efficient manner. These operating advantages include:

Caring and Effective Customer Support – Our automated self-service support tools and highly trained team of Xpeers provide a superior level of customer service compared to many incumbent banks or financial services companies. We delight and educate our customers by providing them with a differentiated and human level of customer service, which we believe increases their financial literacy, improves their experience and increases their engagement with our platform.

Low Operating Costs – We operate with a low-cost model across four key areas of our business: (1) low cost to acquire; (2) low cost to serve; (3) low cost of risk; (4) low cost of funding;

Advantaged Unit Economics – The self-reinforcing nature of our business model and our low operating costs have helped us generate strong unit economic performance, which we believe provides us with several competitive advantages that include: (1) increasing revenue per customer; (2) high customer engagement; and (3) low customer churn.

We Have Significant Strategic Advantages

Our self-reinforcing model also provides us with key strategic advantages that help us differentiate, grow and compete more effectively. These strategic advantages include:

Unique Data – Our model generates proprietary data on millions of consumers and SMEs across Latin America, which provides us with unique insights into customer behavior. We feed this data into our artificial intelligence and machine learning algorithms to improve our underwriting, differentiate our products and services, enhance our customer support, tailor customer experiences and lower our risks.

Powerful Self-Reinforcing Network Effects – As we grow our business, we believe our model demonstrates distinct self-reinforcing network effects that help compound our growth.

Our Growth Strategies

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of consumers and SMEs. We intend to leverage the competitive strengths and advantages of our self-reinforcing model to grow and expand our business and create value for customers and shareholders. Our primary growth vectors are:

1. Grow Our Nu Ecosystem

We believe our self-reinforcing model will continue to drive the expansion of our ecosystem, enabling us to reach, engage and grow our base of customers and partners. We intend to grow our Nu Ecosystem by:

Nurturing Our Customer Acquisition Engine – We continue to build our customer acquisition engine by:

Growing Our Base of Highly Loyal Customers – Who we believe will continue to refer customers to us.

Developing Our Digital Content and Social Media Presence – Creating new digital content for our NuCommunity portal and our millions of mobile app users, and building our social media platforms to foster customer engagement, advocacy and financial education; and

Tactically Leveraging Marketing Spend – To build a leading consumer brand that is loved and trusted by customers in all markets in which we operate, helping us to expand our ecosystem, attract higher value customers and raise awareness of our new products and services.

Increasing Our Share of Customers’ Financial Lives – We believe we will continue to increase our share of customers’ financial lives by:

Growing With Our Customers – As they accumulate more wealth and reach new life milestones that may increase their need for financial services. We currently serve a young customer base with an average age of 33 as of March 31, 2021, providing us with the opportunity to grow with customers who are in the early stages of their financial journeys; and

2. Enhance Our Nu Platform

We believe that there is a significant opportunity to leverage our advanced technology and proprietary data science to offer additional functionality, solutions and experiences to our customers as we learn more about their behaviors and needs. We intend to improve our Nu Platform by:

Enhancing the Functionality of Our Platform and Solutions – We are constantly developing new code and making improvements to our platform and our solutions, with approximately 1,000 code deployments per week.

Innovating and Developing New Solutions – We are also developing new capabilities and solutions.

Executing Strategic Acquisitions – Although we are primarily focused on growing our business organically, we may selectively pursue strategic acquisitions that we believe are attractive business opportunities and are aligned with our mission to consolidate or expand into new areas and gain new capabilities quickly and efficiently.

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Making Corporate Venture Investments – We have also created an in-house corporate ventures team to evaluate and make minority investments in earlier stage companies where we see long-term strategic value in the form of establishing relationships and receiving first-hand insights and learnings on new potential geographies, products, technologies and strategies that we might consider entering or using in the future.

3. Expand into New Markets

We believe our Nu Model also provides us with the capability to expand into new markets and scale quickly and efficiently. For example, we may consider expanding into:

Adjacent Sectors – We believe there is a significant opportunity to bring the self-reinforcing effects of our model to adjacent sectors where we can disrupt legacy models and provide additional value to our existing and new customers. For example, we believe there are similar opportunities to simplify the daily lives for our customers by disrupting existing models in industries such as e-commerce, healthcare and telecommunications.

Risk Factors Summary

Investing in our Class A ordinary shares, including in the form of BDRs, involves risks. You should carefully consider the risks described in “Risk Factors” before making a decision to invest in our Class A ordinary shares or BDRs. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially adversely affected. In such case, the trading price of our Class A ordinary shares and BDRs would likely decline, and you could lose all or part of your investment. The following is a summary of some of the principal risks we face:

Risks Relating to Our Business and Industry

Our business depends on a well-regarded and widely known brand, and any failure to maintain, protect and enhance our brand and image, including through effective marketing strategies, would harm our business, financial condition and results of operations.

Failure to successfully implement and improve our risk management policies, procedures and methods, including our credit risk management system, would materially and adversely affect our business, results of operations and financial condition.

Our international expansion efforts may not be successful, or may subject our business to increased risks.

Our business is highly dependent on the proper functioning of information technology systems, particularly at scale. Any failure of these systems would disrupt our business and impair our ability to provide our services and products effectively to our customers.

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We depend on data centers operated by third parties and third-party Internet hosting providers and cloud computing platforms, and any disruption in the operation of these facilities or platforms or access to the Internet would adversely affect our business.

Risks Relating to Intellectual Property, Privacy and Cybersecurity

Unauthorized disclosure of sensitive or confidential customer information or our failure or the perception by our customers that we failed to comply with privacy laws or properly address privacy concerns could harm our business and standing with our customers.

Unauthorized disclosure of, improper access to, or destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise, or disruptions to our systems or services could expose us to liability, protracted and costly litigation and damage our reputation.

Claims by others that we infringe their proprietary technology or other rights could have a material and adverse effect on our business, financial condition and results of operations.

Risks Relating to Regulatory Matters and Litigation

We are subject to extensive regulation and regulatory and governmental oversight as a digital banking platform and as a payment institution. Compliance with or violation of present or future regulations could be costly, expose us to substantial liability and force us to change our business practices, any of which could harm our business and results of operations.

Certain ongoing legislative and regulatory initiatives under discussion by the Brazilian Congress, the Central Bank of Brazil and the broader payments industry may result in changes to the regulatory framework of the Brazilian payments and financial industries and may have an adverse effect on us.

We are subject to costs and risks associated with increased or changing laws and regulations, affecting our business, including those relating to data privacy, security and protection. Developments in laws and regulations could harm our business, financial condition or results of operations.

Risks Relating to the Countries in Which We Operate

Exchange rate instability may have a material adverse effect on the economies of the countries in which we operate and the price of our Class A ordinary shares and BDRs.

Disruption or volatility in global financial and credit markets could adversely affect the financial and economic environment in the countries in which we operate, most notably Brazil, Colombia and Mexico, which could have a material adverse effect on us.

Governments have exercised, and continue to exercise, significant influence over the Brazilian economy and the other economies in which we operate. This influence, as well as political and economic conditions in Brazil and the other countries in which we operate, could harm us and the price of our Class A ordinary shares and BDRs.

Risks Relating to Our Class A Ordinary Shares, our BDRs and the Offering

There is no existing market for our Class A ordinary shares, and we do not know whether one will develop to provide you with adequate liquidity. If the trading price of our Class A ordinary shares fluctuates after this offering, you could lose a significant part of your investment.

Our founding shareholder and CEO, David Vélez Osorno will own % of our outstanding Class B ordinary shares after this offering, which will represent approximately % of the voting power of our

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issued share capital. This concentration of ownership and voting power will limit your ability to influence corporate matters.

We have granted the holders of our Class B ordinary shares preemptive rights to acquire shares that we may sell in the future, which may impair our ability to raise funds.

Our Corporate Structure

Our group is currently composed of 32 entities, including Nu Holdings Ltd. and our 31 subsidiaries, 13 of which are incorporated in Brazil, and the remainder of which are incorporated in other countries. None of our subsidiaries is licensed to operate as a bank. Our significant subsidiaries and a summary of their operations are as follows:

Nu Pagamentos S.A., or “Nu Pagamentos”

Nu Pagamentos, our 100%-owned indirect subsidiary organized in Brazil, is primarily engaged in the issuance and administration of credit cards and payment transfer through a prepaid account. Nu Pagamentos is a regulated payment institution under Brazilian law authorized to operate in such capacity by the Central Bank of Brazil.

Nu Financeira S.A. – SCFI, or “Nu Financeira”

Nu Financeira, our 100%-owned indirect subsidiary organized in Brazil, launched in February 2019 offering personal loans as its main product. Nu Financeira is a regulated financial institution under Brazilian law authorized to operate in such capacity by the Central Bank of Brazil.

Nu BN Servicios México, S.A. de CV, or “Nu Servicios”

Nu Servicios, our 99.9%-owned indirect subsidiary organized in Mexico, is engaged in the issuance and administration of credit cards. Nu Servicios operates as a regulated financial institution under the oversight of the CNBV.

Nu Colombia S.A., or “Nu Colombia”

Nu Colombia, our 100%-owned indirect subsidiary organized in Colombia, launched in September 2020 with operations related to credit cards. Nu Colombia is a regulated commercial entity operating subject to the supervision of the Colombian Superintendence of Industry and Commerce, or “SIC,” a public authority and a technical agency attached to the Ministry of Trade, Industry and Tourism of Colombia.

A simplified organizational chart showing our corporate structure upon the consummation of the offering is set forth below.

(1)

Nu subsidiaries organized in Brazil consist of Nu Pagamentos S.A., Nu Financeira S.A. – SCFI, Nu Investimentos Ltda., Nu Distribuidora de Titulos e Valores Mobiliarios Ltda., Nu Produtos Ltda., and the Easynvest Companies.

(2)

Nu subsidiaries organized in Colombia consist of Nu Colombia S.A.

(3)

Nu subsidiaries organized in Mexico consist of Nu BN México, S.A. de CV SOFOM E.N.R., Nu BN Servicios México, S.A. de C.V. and Nu BN Tecnologia, S.A. de C.V.

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(4)

Nu subsidiaries organized in Argentina consist of Nu Argentina S.A.

(5)

Nu subsidiaries organized in Germany consist of Nu Finanztechnologie GmbH.

(6)

Nu subsidiaries organized in the United States consist of Nu 1-B, LLC, Nu 2-B, LLC, Nu 3-B, LLC, Nu 1-A, LLC, Nu 2-A, LLC, Nu 3-A, LLC, Nu Payments, LLC, Nu MX LLC and Cognitect, Inc.

Corporate Information

We were incorporated in the Cayman Islands as an exempted company with limited liability on February 26, 2016. Our principal executive offices are located at Floor 4, Willow House, Cricket Square, Grand Cayman, KY1-9010, Cayman Islands, and our telephone number at this address is +1 345 949 2648. Our website address is www.nubank.com.br. Information contained on, or that can be accessed through, our website is not part of, or incorporated by reference into, this prospectus, and inclusions of our website address in this prospectus are inactive textual references only, and are for your informational reference only.

Emerging Growth Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the “JOBS Act.” As such, we may take advantage of reduced disclosure obligations and certain exemptions from requirements that are otherwise generally applicable to public companies listed in the United States, including:

a requirement to have only two years of audited financial statements and related financial disclosure;

an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the “Sarbanes-Oxley Act,” with respect to our internal control over financial reporting;

reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and

an exemption from the requirements of holding non-binding advisory votes on executive compensation and golden parachute arrangements.

We may take advantage of these provisions until the last day of the fiscal year ending after the fifth anniversary of our initial public offering, or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company on the earliest to occur of (1) the last day of the fiscal year in which we have at least US$1.07 billion in annual revenue, (2) the last day of the fiscal year in which, as of the last business day of the second fiscal quarter, we had an aggregate worldwide market value of our ordinary shares held by non-affiliates of at least US$700 million and (3) the date on which we have issued more than US$1.0 billion of non-convertible debt over a three-year period.

We may choose to take advantage of some or all of these exemptions. As a result of this status, we have taken advantage of reduced reporting requirements in this prospectus and may elect to take advantage of other reduced reporting requirements in our documents filed or furnished in the future with the SEC. In particular, in this prospectus, we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Given that we currently report and expect to continue to report under International Financial Reporting Standards, or “IFRS,” as issued by the International Accounting Standards Board, or the “IASB,” we will not be able to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is permitted or required by the IASB. In addition, following the offering, we will be a “controlled company” within the meaning of the Nasdaq/NYSE corporate governance standards and as such plan to rely on available exemptions from certain Nasdaq/NYSE corporate governance requirements.

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The Offering

This summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all the information you should consider before investing in our Class A ordinary shares or BDRs, as the case may be. You should carefully read this entire prospectus before investing in our Class A ordinary shares or BDRs including “Risk Factors” and our consolidated financial statements.

Issuer	Nu Holdings Ltd.

Selling Shareholders

Global offering	The global offering consists of the international offering and the concurrent Brazilian offering. The closing of the international offering is not conditioned upon the closing of the concurrent Brazilian offering, but the closing of the concurrent Brazilian offering is conditioned upon the closing of this international offering, and there can be no assurance that the concurrent Brazilian offering will be completed on the terms described herein or at all.

Class A ordinary shares offered by us in the international offering	Class A ordinary shares (or Class A ordinary shares if the underwriters exercise in full their over-allotment option).

Class A ordinary shares offered by the selling shareholders in the international offering	Class A ordinary shares (or Class A ordinary shares if the underwriters exercise in full their over-allotment option).

Brazilian offering	The concurrent Brazilian offering includes newly issued Class A ordinary shares in the form of BDRs being sold by us or Class A ordinary shares in the form of BDRs if the underwriters exercise in full their over-allotment option. Each BDR represents Class A ordinary shares.

	Investors residing outside Brazil, including institutional investors, may purchase BDRs if they comply with certain registration requirements of the CVM. See “Underwriting.”

Option to purchase additional Class A ordinary shares	We and the selling shareholders have granted the underwriters the right to purchase up to an additional Class A ordinary shares within 30 days of the date of this prospectus, at the public offering price, less underwriting discounts and commissions, on the same terms as set forth in this prospectus. We will not receive any proceeds from the sale of Class A ordinary shares by the selling shareholders.

Class A ordinary shares to be outstanding immediately after the global offering	Class A ordinary shares (or Class

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	A ordinary shares if the underwriters exercise in full their over-allotment option) (including Class A ordinary shares underlying the BDRs).

Class B ordinary shares to be outstanding immediately after the global offering	Class B ordinary shares.

Total ordinary shares to be outstanding immediately after the global offering	ordinary shares (or ordinary shares if the underwriters exercise in full their over-allotment option) (including Class A ordinary shares underlying the BDRs).

Voting rights	The Class A ordinary shares will be entitled to one vote per share, whereas the Class B ordinary shares (which are not being sold in this offering) will be entitled to 20 votes per share. Each Class B ordinary share may be converted into one Class A ordinary share at the option of the holder. If, on the record date for any shareholders meeting, the aggregate voting power of Class B ordinary shares then outstanding is less than 10% of the aggregate voting power of Class A ordinary shares and Class B ordinary shares outstanding, then each Class B ordinary share will automatically convert into one Class A ordinary share. In addition, each Class B ordinary share will convert automatically into one Class A ordinary share upon any transfer, except for certain transfers to permitted transferees, including affiliates and certain unrelated third parties as described under “Description of Share Capital—Ordinary Shares—Conversion Rights.” Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters unless otherwise required by law and subject to certain exceptions set forth in our amended and restated memorandum and articles of association to be entered into in connection with this offering, or the “Memorandum and Articles of Association”, as described under “Description of Share Capital—Ordinary Shares—Voting Rights.” Upon consummation of this offering, assuming no exercise of the underwriters’ option to purchase additional shares, (1) holders of Class A ordinary shares, including in the form of BDRs, will hold approximately % of the combined voting power of our outstanding ordinary shares and approximately % of our total equity ownership and (2) holders of Class B ordinary shares will hold

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approximately % of the combined voting power of our outstanding ordinary shares and approximately % of our total equity ownership.

If the underwriters exercise their option to purchase additional shares in full, (1) holders of Class A ordinary shares, including in the form of BDRs, will hold approximately % of the combined voting power of our outstanding ordinary shares and approximately % of our total equity ownership and (2) holders of Class B ordinary shares will hold approximately % of the combined voting power of our outstanding ordinary shares and approximately % of our total equity ownership.

The rights of the holders of Class A ordinary shares and Class B ordinary shares are identical, except that (1) holders of Class B ordinary shares are entitled to 20 votes per share, whereas holders of our Class A ordinary shares are entitled to one vote per share; (2) holders of Class B ordinary shares have certain conversion rights; (3) holders of Class B ordinary shares are entitled to preemptive rights in the event that there is an increase in our share capital and additional ordinary shares are issued in order to maintain their proportional ownership interest; and (4) holders of Class B ordinary shares have certain consent rights. Moreover, the Class B ordinary shares will not be listed on any stock exchange and will not be publicly traded. See “Description of Share Capital” for a description of the material terms of our ordinary shares, and differences between our Class A ordinary shares and Class B ordinary shares, and “Management—Shareholder’s Agreement” for a description of the material terms of our Shareholder’s Agreement which also impacts our Class A ordinary shares and Class B ordinary shares.

Voting rights of BDR holders

BDR holders will be entitled to the same rights, preferences and restrictions granted to our shareholders pursuant to our Memorandum and Articles of Association and the laws of the Cayman Islands, which will include the right to vote at our shareholders’ meetings. However, BDR holders will not be entitled to attend our shareholders’ meetings. Pursuant to the terms of the Deposit Agreement, a BDR holder will have the right to instruct the BDR Depositary to vote the Class A ordinary shares underlying its BDRs. We will inform the BDR Depositary of any upcoming shareholders’ meeting, and the BDR Depositary will give notice to the BDR holders, at least 30 days prior to the shareholders’ meeting, requesting voting instructions from each BDR holder with respect to the Class A ordinary shares underlying the BDRs, to be given within the

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	term established by the BDR Depositary. See “Description of Brazilian Depositary Receipts—Deposit Agreement—Voting Rights of BDRs” and “Risk Factors—Risks Relating to Our Class A Ordinary Shares, our BDRs and the Offering.”

BDRs	Each BDR will represent Class A ordinary share and will be evidenced by a BDR. The depositary for the BDRs in Brazil is , or the “BDR Depositary.” The BDRs will be issued pursuant to the deposit agreement between us and the BDR Depositary, as depositary, or the “Deposit Agreement,” and the certificates for the Class A ordinary shares represented by the BDRs will be deposited, free and clear of any encumbrance, with , as custodian. Trades of our BDRs on the B3 will settle through the facilities of the Central Depository of the B3. See “Description of Brazilian Depositary Receipts—Deposit Agreement—BDR Registry Book; Ownership and Trading of BDRs” for more information.
BDR Depositary	.

Custodian for the Class A ordinary shares underlying the BDRs	.

Use of proceeds	We estimate that the net proceeds from the sale of our Class A ordinary shares in the global offering, including in the form of BDRs, will be approximately US$ (or approximately US$ if the underwriters’ option to purchase additional Class A ordinary shares is exercised in full), based upon the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The principal purposes of the global offering are to increase our capitalization and financial flexibility, create a public market for our Class A ordinary shares and BDRs, and enable access to the public equity markets for us and our shareholders. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time. We will not

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	receive any proceeds from the sale of Class A ordinary shares by the selling shareholders or, if exercised, from the portion of the over-allotment option that has been granted to the selling shareholders. See “Use of Proceeds” for additional information.

Listing	We intend to apply to list our Class A ordinary shares on the Nasdaq/NYSE, under the symbol “ ” and we intend to list and trade the BDRs with the B3, under the symbol “ .”

Share capital before and after offering	As of the date of this prospectus, our authorized share capital is US$ , consisting of (i) ordinary shares of par value US$ each (of which are designated as Class A ordinary shares and are designated as Class B ordinary shares), (ii) are designated as preferred shares of various series, and (iii) are designated as management shares. Immediately prior to the completion of this offering, our share capital will be adjusted by the automatic conversion of all of our outstanding preferred shares into Class A ordinary shares, and the surrender and cancellation for no consideration of all of our management shares, which together we refer to as the “Share Capital Conversion.” In addition, effective as from , 2021, we implemented a -for-one share split of our ordinary shares, which we refer to as the “Share Split.” Immediately after the global offering, we will have Class A ordinary shares (including Class A ordinary shares underlying the BDRs), and Class B ordinary shares outstanding, assuming no exercise of the underwriters’ option to purchase additional shares.

Dividend policy	We have never declared or paid any cash dividend on our share capital, and we have not adopted a dividend policy with respect to future declarations and payment of dividends. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant. In the event that we pay any dividend on our Class A

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	ordinary shares, the holders of BDRs will be entitled to the same rights as the holders of our Class A ordinary shares to receive dividends, subject to the BDR Depositary and custodian fees, and tax and exchange expenses, if any. See “Dividend and Dividend Policy” and “Description of Share Capital—Dividends and Capitalization of Profits.”

Lock-up agreements	We have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital, including in the form of BDRs, or securities convertible into or exchangeable or exercisable for any shares of our share capital, including in the form of BDRs, during the -day period following the date of this prospectus, subject to certain exceptions. Members of our board of directors, our executive officers and our principal shareholders have agreed to substantially similar lock-up provisions, subject to certain exceptions. See “Underwriting.”

Trading, settlement and clearance	The international underwriters expect to deliver our Class A ordinary shares against payment in U.S. dollars via book-entry, through the clearing and settlement systems of DTC, on or about , 2021. The Brazilian underwriters expect to deliver our BDRs in Brazil against payment in reais through the facilities of the Central Depositary of the B3 (Central Depositária da B3) on or about , 2021. Trades in our BDRs on the B3 will settle through the facilities of the Central Depositary of the B3. The transfer of our Class A ordinary shares to the Custodian will settle through the facilities of the DTC.

Risk factors	See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our Class A ordinary shares or BDRs.

Cayman Islands exempted company with limited liability	We are a Cayman Islands exempted company with limited liability. The rights of our shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty

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to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not improperly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Our Memorandum and Articles of Association have varied this last obligation by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq/NYSE and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting, provided that such disclosure does not modify the duty of interested directors to act bona fide in the best interests of the Company. In comparison, under the Delaware General Corporation Law, a director of a Delaware corporation owes fiduciary duties to the corporation and its stockholders consisting of the duty of care and the duty of loyalty. Such duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. See “Description of Share Capital—Principal Differences between Cayman Islands and U.S. Corporate Law.”

The number of Class A ordinary shares (including Class A ordinary shares underlying the BDRs), and Class B ordinary shares that will be outstanding after this offering is based on ordinary shares outstanding as of March 31, 2021 (after giving effect to the Share Capital Conversion and the Share Split), and includes:

the issuance of an aggregate of Class A ordinary shares pursuant to the achievement of the Award First Milestone and Award Second Milestone under the Contingent Share Awards. Such Class A ordinary shares were converted into Class B ordinary shares upon request of the holder thereof on . See “Capitalization” and “Executive Compensation—Contingent Share Awards;” and

Class A ordinary shares that we expect to issue commencing in August 2021 in connection with the first anniversary of our acquisition of Cognitect, Inc., or “Cognitect,” upon the satisfaction of certain conditions precedent for the payment of contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees.

The number of Class A ordinary shares (including Class A ordinary shares underlying the BDRs) and Class B ordinary shares that will be outstanding after this offering excludes:

Class A ordinary shares that are expected to be issued as contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees, payable in equal

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installments over a four year period commencing in August 2021, subject to the satisfaction of certain conditions precedent;

Class A ordinary shares issuable upon the exercise of options to purchase Class A ordinary shares outstanding as of March 31, 2021, with a weighted-average exercise price of US$ per share;

Class A ordinary shares subject to restricted share units, or “RSUs,” granted prior to March 31, 2021 that remain subject to performance and service conditions; and

Class A ordinary shares reserved for future issuance under our SOP; and

Class A ordinary shares reserved for future issuance under our Omnibus Incentive Plan.

Our SOP and Omnibus Incentive Plan allow us to re-grant the number of shares that were granted thereunder that expire, are forfeited, as more fully described in “Executive Compensation—Employee Benefit and Share Plans.”

Except as otherwise indicated, all information in this prospectus:

gives effect to the -for-one share split of our ordinary shares effective as of , 2021, applied retroactively to all figures herein setting forth the number of our ordinary shares and per share data, or the “Share Split”;

gives effect to the Share Capital Conversion and the filing and effectiveness of our Memorandum and Articles of Association in Cayman Islands, each of which will occur immediately prior to the completion of this offering;

no exercise of outstanding share options or settlement of outstanding RSUs subsequent to March 31, 2021;

no exercise of the option granted to the underwriters to purchase up to additional Class A ordinary shares in connection with this offering; and

assumes completion of the Brazilian offering. There can be no assurance that the concurrent Brazilian offering will be completed on the terms described herein or at all.

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Summary Consolidated Financial and Other Data

The following tables set forth, for the periods and as of the dates indicated, our summary consolidated financial and operating data. Our historical results are not necessarily indicative of the results that may be expected in the future. This information should be read in conjunction with “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus.

The summary interim statements of financial position as of March 31, 2021 and the interim statements of profit or loss for the three months ended March 31, 2021 and 2020 have been derived from our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus, prepared in accordance with International Financial Reporting Standard, or “IFRS,” IAS No. 34 - Interim Financial Reporting, or “IAS 34,” or “our unaudited condensed consolidated interim financial statements.” The summary statements of financial position as of December 31, 2020, 2019 and 2018 and the statements of profit or loss for the years ended December 31, 2020, 2019 and 2018 have been derived from our audited consolidated financial statements included elsewhere in this prospectus, prepared in accordance with the IFRS, as issued by the IASB (our “audited consolidated financial statements”). All references herein to “our consolidated financial statements,” are to both our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements, included elsewhere in this prospectus. Our results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the entire year ending December 31, 2021 or any other period. Share and per share data in the table below has been retroactively adjusted to give effect to the Share Split.

Statement of Profit or Loss Data

	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
	(in US$ millions, except share data and amounts per share)
Interest income		127.3			131.3			382.9			337.9			161.6
Fee and commission income		117.7			84.9			354.2			274.2			157.3
Total revenue		245.1			216.2			737.1			612.1			318.9
Interest and other financial expenses		(31.7	)		(33.2	)		(113.9	)		(109.7	)		(45.4	)
Transactional expenses		(26.3	)		(33.2	)		(126.8	)		(79.3	)		(43.2	)
Credit loss allowance expenses		(71.3	)		(61.8	)		(169.5	)		(175.2	)		(118.6	)
Total cost of financial and transactional services provided		(129.3	)		(128.2	)		(410.2	)		(364.2	)		(207.2	)
Gross profit		115.7			88.0			326.9			247.9			111.7
Operating expenses
Customer support and operations		(32.1	)		(40.1	)		(124.0	)		(115.6	)		(46.7	)
General and administrative expenses		(115.9	)		(70.6	)		(266.0	)		(199.9	)		(84.7	)
Marketing expenses		(4.9	)		(6.1	)		(19.4	)		(41.8	)		(6.4	)
Other income (expenses)		(16.2	)		(17.7	)		(9.5	)		(19.9	)		(7.3	)
Total operating expenses		(169.1	)		(134.5	)		(418.9	)		(377.2	)		(145.1	)
Finance costs – results with convertible instruments		—			—			(101.2	)		—			—
Loss before income taxes		(53.4	)		(46.5	)		(193.2	)		(129.3	)		(33.4	)
Income taxes
Current taxes		(31.5	)		(6.3	)		(22.3	)		(3.6	)		(15.5	)
Deferred taxes		35.4			19.4			44.0			40.4			20.3
Total income taxes		3.9			13.1			21.7			36.8			4.8
Loss for the period / year		(49.5	)		(33.4	)		(171.5	)		(92.5	)		(28.6	)

Earnings per share:

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	For the Three Months Ended March 31,		For the Years Ended December 31,
	2021	2020	2020	2019	2018
	(in US$ millions, except share data and amounts per share)
Basic and diluted earnings (loss) per share (US$)
Weighted average number of outstanding shares – basic and diluted (in millions of shares)

	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
Client Activity Metrics:
Number of customers (in millions) (1)		36.9			23.3			33.1			19.9			6.0
Active customers (in millions) (2)		25.5			14.1			21.8			12.1			5.1
Activity rate (3)		69	%		60	%		66	%		61	%		85	%
Purchase volume (in US$ billions) (4)		7.5			5.1			22.5			17.1			9.6
Purchase volume growth (%) (4)		47	%		n.a.			32	%		78	%		n.a.
Purchase volume (FX Neutral) (in US$ billions) (4)		7.5			4.3			21.2			12.1			6.3
Purchase volume growth (FX Neutral) (%) (4)		76	%		n.a.			74	%		91	%		n.a.
Deposits (in US$ billions)		5.5			2.4			5.6			2.7			0.6
Deposits growth (%)		130	%		n.a.			107	%		328	%		n.a.
Deposits (FX Neutral) (in US$ billions) (5)		5.5			2.0			5.2			1.9			0.4
Deposits growth (FX Neutral) (%) (5)		173	%		n.a.			167	%		346	%		n.a.
Interest-earning portfolio (in US$ millions) (6)		631.1			411.1			488.7			404.7			212.1
Interest-earning portfolio growth (%) (6)		54	%		n.a.			21	%		91	%		n.a.
Interest-earning portfolio (FX Neutral) (in US$ millions) (6)		631.1			379.9			450.9			289.6			145.9
Interest-earning portfolio growth (FX Neutral) (%) (6)		66	%		n.a.			56	%		99	%		n.a.
Monthly average revenue per active customer (in US$) (7)		3.5			5.5			3.6			5.9			6.9
Monthly average revenue per active customer (FX Neutral) (in US$) (7)		3.5			4.6			3.4			4.2			4.6
Monthly average cost to serve per active customer (in US$) (8)		0.8			1.9			1.2			1.9			1.9
Monthly average cost to serve per active customer (FX Neutral) (in US$) (8)		0.8			1.6			1.1			1.3			1.3

Company Financial Metrics:
Revenue (in US$ millions)		245.1			216.2			737.1			612.1			318.9
Revenue growth (%)		13	%		n.a.			20	%		92	%		n.a.
Revenue (FX Neutral) (in US$ millions) (9)		245.1			180.6			693.5			434.3			210.8
Revenue growth (FX Neutral)(%) (9)		36	%		n.a.			60	%		106	%		n.a.
Credit loss allowance expenses / credit portfolio (%) (10)		2.2	%		2.6	%		5.1	%		5.7	%		6.7	%
Gross profit (in US$ millions)		115.7			88.0			326.9			247.9			111.7
Gross profit (FX Neutral) (in US$ millions) (11)		115.7			73.5			307.6			175.9			73.8
Gross profit margin (%)		47.2	%		40.7	%		44.3	%		40.5	%		35.0	%
Loss (in US$ millions)		(49.5	)		(33.4	)		(171.5	)		(92.5	)		(28.6	)
Loss (FX Neutral) (in US$ million) (12)		(49.5	)		(27.9	)		(161.4	)		(65.7	)		(18.9	)
Adjusted Net Income (Loss) (in US$ millions) (13)		(0.6	)		(24.9	)		(14.1	)		(74.0	)		(19.3	)
Adjusted Net Income (Loss) (FX Neutral) (in US$ millions) (13)		(0.6	)		(20.8	)		(13.2	)		(52.5	)		(12.7	)

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(1)

Customers are defined as an individual or SME that has opened an account with us and has not been charged-off, or blocked, or has voluntarily closed their account.

(2)

Active customers are defined as any customers that have generated revenue in the last 30 calendar days, for a given measurement period.

(3)

Activity rate is defined as active customers divided by total number of customers as of a specific date.

(4)

Purchase volume is defined as the total value of transactions that are authorized through our credit and debit cards only; it does not include other payment methods that we offer such as PIX, a payment system that allows real-time payments and transfers launched by the Central Bank of Brazil, WhatsApp payments and traditional wire transfers. Purchase volume and purchase volume growth are presented on an FX Neutral basis to eliminate the effect of foreign exchange, or “FX” volatility between the comparison periods, allowing management and investors to evaluate our financial performance despite variations in foreign currency exchange rates, which may not be indicative of our core operating results and business outlook. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information.

(5)

Deposits and deposits growth are presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral Deposits to the IFRS measure of this metric can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

(6)

Interest-earning portfolio consists of receivables from credit card operations on which we are accruing interest and loans to customers, in each case gross of ECL allowance, as of the period end date. Interest-earning portfolio and interest-earning portfolio growth are presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral Interest-earning portfolio to the IFRS measure of this metric can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

(7)

Monthly average revenue per active customer, or “Monthly ARPAC” is defined as the average monthly revenues (total revenue divided by number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period). Monthly ARPAC is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information.

(8)

Monthly average cost to serve per active customer is defined as the monthly average of the sum of transactional expenses and customer support and operations expenses (sum of these expenses in the period divided by the number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period). Monthly average cost to serve per active customer is presented on an FX Neutral basis. See “Presentation of Financial

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and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information.

(9)

Revenue and revenue growth are presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral Revenue to the IFRS measure of this metric can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

(10)

Credit loss allowance expenses / credit portfolio is defined as credit loss allowance expenses, divided by the sum of receivables from credit card operations (current, installments and revolving) and loans to customers, in each case gross of ECL allowance, as of the period end date. This metric is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information.

(11)

Gross profit is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral gross profit to the IFRS measure of this metric can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

(12)

Loss is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral loss to the IFRS measure of this metric can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

(13)

Adjusted Net Income (Loss) is defined as profit (loss) for the year/period, adjusted for expenses related to share-based compensation in such year/period and finance costs related to results with convertible instruments in such year/period. Adjusted Net Income (Loss) is also presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our Adjusted Net Income (Loss) and our FX Neutral Adjusted Net Income (Loss) to their most directly comparable IFRS measures of income (loss) can be found below under “—Non-IFRS Financial Measures and Reconciliations.”

Statement of Financial Position Data

	As of March 31,		As of December 31,
	2021		2020		2019		2018
	(US$ millions)
Assets
Cash and cash equivalents		2,200.7		2,343.8		1,246.6		379.2
Financial assets at fair value through profit or loss		4,405.6		4,378.2		2,400.7		655.5
Securities		4,356.5		4,287.3		2,237.7		570.2
Derivative financial instruments		—		0.1		0.2		—
Collateral for credit card operations		49.1		90.8		162.8		85.3
Financial assets at amortized cost		3,172.3		3,150.0		2,923.6		1,652.7
Compulsory deposits at central banks		98.7		43.5		—		—
Credit card receivables		2,787.8		2,908.9		2,786.5		1,623.8
Loans to customers		264.5		174.7		58.0		—
Interbank transactions		1.4		—		0.1		—
Other financial assets at amortized cost		19.9		22.9		79.0		28.9
Other assets		133.0		123.3		67.9		36.0
Deferred tax assets		178.5		125.1		94.2		55.2
Right-of-use assets		9.0		10.7		17.2		—
Property, plant and equipment		9.0		9.9		8.7		6.7
Intangible assets		12.2		12.4		1.1		0.5
Goodwill		0.8		0.8		—		—
Total assets		10,121.1		10,154.2		6,760.0		2,785.8

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	As of March 31,			As of December 31,
	2021			2020			2019			2018
		(US$ millions)
Liabilities
Financial liabilities at fair value through profit or loss		110.8			90.8			24.1			—
Derivative financial instruments		62.2			75.3			2.0			—
Instruments eligible as capital		13.1			15.5			22.1			—
Repurchase agreements		35.5			—			—			—
Financial liabilities at amortized cost		8,947.6			9,421.7			5,973.0			2,420.0
Deposits		5,461.7			5,584.9			2,693.2			628.7
Payables to credit card network		2,982.5			3,331.3			2,976.5			1,675.9
Borrowings and financing		103.2			97.4			133.4			50.7
Securitized borrowings		57.7			79.7			169.9			64.7
Senior preferred shares		342.5			328.4			—			—
Salaries, allowances and social security contributions		35.7			25.8			11.2			5.5
Tax liabilities		40.2			30.8			12.4			17.1
Lease liabilities		10.2			12.0			18.7			—
Provision for lawsuits and administrative proceedings		15.5			16.5			21.0			14.3
Deferred income		26.3			26.0			21.2			10.8
Deferred tax liabilities		38.1			8.7			0.7			—
Other liabilities		92.8			83.8			65.5			21.4
Total liabilities		9,317.3			9,716.1			6,147.8			2,489.1

Equity
Share capital		—			—			—			—
Share premium reserve		1,038.4			638.0			631.2			389.4
Accumulated gains (losses)		(117.3	)		(102.4	)		28.2			(58.0	)
Other comprehensive income/loss		(117.3	)		(97.5	)		(47.2	)		(34.7	)
Total equity		803.8			438.1			612.2			296.7
Total liabilities and equity		10,121.1			10,154.2			6,760.0			2,785.8

Non-IFRS Financial Measures and Reconciliations

This prospectus presents our Adjusted Net Income (Loss) and certain FX Neutral measures and their respective reconciliations for the convenience of investors, which are non-IFRS financial measures. A non-IFRS financial measure is generally defined as a numerical measure of historical or future financial performance, financial position, or cash flow that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure. For further information on why our management chooses to use these non-IFRS financial measures, and on the limits of using these non-IFRS financial measures, please see “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures.” The FX Neutral measures shown below for Adjusted Net Income (Loss) and certain key business metrics were calculated using the average Brazilian real/U.S. dollars exchange rate for the three months ended March 31, 2021, to present what such measures in preceding periods/years would have been had exchange rates remained stable from these preceding periods/years until the three months ended March 31, 2021.

The FX Neutral measures below were calculated by multiplying the as reported amounts of Adjusted Net Income (Loss) and the key business metrics below for the three months ended March 31, 2020, and for the years ended December 31, 2020, 2019 and 2018 by the average Brazilian real/U.S. dollars exchange rates for the three months ended March 31, 2020 (R$4.654 to US$1.00) and for the years ended December 31, 2020, 2019 and 2018

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(R$5.240, R$3.952, R$3.681, to US$1.00, respectively), and using such results to re-translate the corresponding amounts back to U.S. dollars by dividing them by the average Brazilian real/U.S. dollars exchange rates for the three months ended March 31, 2021 (R$5.570 to US$1.00) so as to present what certain of our statement of profit and loss amounts and key business metrics would have been had exchange rates remained stable from these past periods/years until the three months ended March 31, 2021. The average Brazilian real/U.S. dollars exchange rates were calculated as the average of the month-end rates for each month in the three months ended March 31, 2021 and 2020 and of the month-end rates for each month in the years 2020, 2019 and 2018, as reported by Bloomberg.

	As reported									FX Neutral measures
	For the three months ended March 31,						Percentage change (%)			For the three months ended March 31,						Percentage change (%)
	2021			2020			2021/2020			2021			2020			2021/2020
Adjusted Net Income (Loss) for the period
Loss for the period		(49.5	)		(33.4	)		48.0			(49.5	)		(27.9	)		77.1
Share-based compensation		48.8			8.5			n.m.			48.8			7.0			n.m.
Adjusted Net Income (Loss) for the period		(0.6	)		(24.9	)		(97.6	)		(0.6	)		(20.8	)		(97.6	)

Other Key Business Metrics
Purchase volume (in US$ billions)		7.5			5.1			47.1			7.5			4.3			76.0
Interest-earning portfolio (in US$ millions)		631.1			411.1			53.5			631.1			379.9			66.1
Monthly average revenue per active customer (in US$)		3.5			5.5			36.4			3.5			4.6			23.8
Monthly average cost to serve per active customer (in US$)		0.8			1.9			57.9			0.8			1.6			49.6
Revenue (in US$ millions)		245.1			216.2			13.4			245.1			180.6			35.7
Gross Profit (in US$ millions)		115.7			88.0			31.5			115.7			73.5			57.4

n.m. = note meaningful

	As reported															FX Neutral measures
	For the years ended December 31,									Percentage change (%)						For the years ended December 31,									Percentage change (%)
	2020			2019			2018			2020/2019			2019/2018			2020			2019			2018			2020/2019			2019/2018
Adjusted Net Income (Loss) for the period/year:
Loss for the year		(171.5	)		(92.5	)		(28.6	)		85.4			223.7			(161.4	)		(65.7	)		(18.9	)		145.8			247.6
Share-based compensation		56.2			18.5			9.3			203.8			98.9			52.9			13.1			6.1			303.8			114.8
Finance costs - results with convertible instruments		101.1			—			—			n.a.			n.a.			95.1			—			—			n.a.			n.a.
Adjusted Net Income (Loss) for the year		(14.0	)		(74.0	)		(19.2	)		81.1			285.4			(13.2	)		(52.5	)		(12.7	)		(74.9	)		313.4

Other Key Business Metrics
Purchase volume (in US$ billions)		22.5			17.1			9.6			31.6			71.8			21.2			12.1			6.3			74.5			91.2
Monthly average revenue per		3.6			5.9			6.9			(39.0	)		(14.5	)		3.4			4.2			4.6			(19.1	)		(8.2	)

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	As reported											FX Neutral measures
	For the years ended December 31,						Percentage change (%)					For the years ended December 31,						Percentage change (%)
	2020		2019		2018		2020/2019			2019/2018		2020		2019		2018		2020/2019			2019/2018
active customer (in US$)
Monthly average cost to serve per active customer (in US$)		1.2		1.9		1.9		(36.8	)		0.0		1.1		1.3		1.3		(16.2	)		7.4
Revenue (in US$ millions)		737.1		612.1		318.9		20.4			91.9		693.5		434.3		210.8		59.7			106.0
Gross Profit (in US$ millions)		326.9		247.9		111.7		31.9			121.9		307.6		175.9		74.9		75			134.8

The FX Neutral measures below were calculated by multiplying the as reported amounts as of December 31, 2020, March 31, 2020, December 31, 2019 and December 31, 2018 by the spot Brazilian real/U.S. dollars exchange rates as of these dates (December 31, 2020, March 31, 2020, December 31, 2019 and December 31, 2018 rates of R$5.199, R$5.206, R$4.030, R$3.875, to US$1.00, respectively), and using such results to re-translate the corresponding amounts back to U.S. dollars by dividing them by using the spot rate as of March 31, 2021 (R$5.634 to US$1.00) so as to present what these amounts would have been had exchange rates been the same as those on March 31, 2021. The Brazilian real/U.S. dollars exchange rates were calculated using rates as of such dates as reported by Bloomberg.

	As reported						FX Neutral measures
	As of March 31,				Percentage change (%)		As of March 31,				Percentage change (%)
	2021		2020		2021/2020		2021		2020		2021/2020
Deposits (in US$ billions)		5.5		2.4		130.0		5.5		2.0		173.1
Interest-earning portfolio (in US$ millions)		631.1		411.1		53.5		631.1		379.9		66.1

	As reported										FX Neutral measures
	As of December 31,						Percentage change (%)				As of December 31,						Percentage change (%)
	2020		2019		2018		2020/2019		2019/2018		2020		2019		2018		2020/2019		2019/2018
Deposits (in US$ billions)		5.6		2.7		0.6		107.4		328.4		5.2		1.9		0.4		167.5		345.6
Interest-earning portfolio (in US$ millions)		488.7		404.7		212.1		20.7		90.8		450.9		289.6		145.9		55.7		98.5

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Risk Factors

Investing in our Class A ordinary shares or BDRs involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our Class A ordinary shares or BDRs. In particular, you should consider the risks related to investing in securities of issuers whose operations are located in emerging markets such as Brazil, Mexico and Colombia, which involves a higher degree of risk than investing in the securities of issuers whose operations are located in the United States or other more developed countries. If any of the risks discussed in this prospectus actually occur, alone or together with additional risks and uncertainties not currently known to us, or that we currently deem immaterial, our business, financial condition, results of operations and prospects may be materially adversely affected. If this were to occur, the value of our Class A ordinary shares and BDRs may decline and you may lose all or part of your investment.

Risks Relating to Our Business and Industry

We believe our brand has contributed significantly to the historical success of our business. Maintaining, protecting and enhancing our brand is critical to expanding our customer base, our loan portfolio and our third-party partnerships, as well as increasing engagement with our products and services. Our success in this regard will depend largely on our ability to remain – or, in markets into which we expand, become – widely known, gain and maintain our customers’ trust, be a technology leader and provide reliable, high-quality and secure products and services that continue to meet the needs of our customers at competitive prices, as well as the effectiveness of our marketing efforts and our ability to differentiate our services and platform capabilities from competitive products and services.

We believe that maintaining and promoting our brand in a cost-effective manner is critical to achieving widespread acceptance of our products and services and to expand our customer base. Maintaining and promoting our brand will depend largely on our ability to continue to provide useful, reliable and innovative products and services, which we may not do successfully. Our brand promotion activities may not generate customer awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand or if we incur excessive expenses in this effort, we would lose significant market share and our business would be materially and adversely affected. Further, the introduction and promotion of new products and services, as well as the promotion of existing products and services, may be partly dependent on our visibility on third-party advertising platforms. Changes in the way these platforms operate or changes in their advertising prices or other terms could make the maintenance and promotion of our products and services and our brand more expensive or more difficult. If we are unable to market and promote our brand on third-party platforms effectively, our ability to acquire new customers would be materially harmed, which would adversely affect our business, financial condition and results of operations.

The management of risk is an integral part of our activities. We seek to monitor and manage our risk exposure through a variety of separate but complementary financial, credit, market, operational, compliance and legal policies, procedures and reporting systems, among others. We employ a broad and diversified set of risk monitoring and risk mitigation techniques, which may not be fully effective in mitigating our risk exposure in all economic market environments or against all types of risk, including risks that we may fail to identify or anticipate.

We use certain qualitative tools and metrics for managing market risk, including our use of value at risk, or “VaR,” and statistical modeling tools, which are based upon our use of observed historical market behavior. We apply statistical and other tools to these observations to arrive at quantifications of our risk exposures. However, in part because these qualitative tools and metrics are based on historical market behavior, and in part because the

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qualitative models do not take all market risks into account, they may fail to predict future market risk exposures, including those that arise from factors we did not anticipate or correctly evaluate in our statistical models. This would limit our ability to effectively manage our market risk, which could result in our losses being significantly greater than predicted.

Because certain of our operating subsidiaries are financial and/or payments institutions, our business is also subject to inherent credit risk. An important feature of our credit risk management system is an internal credit score system that assesses the particular risk profile of a customer. As this process involves detailed analysis of a customer that takes into account both quantitative and qualitative factors, it is subject to error, and our internal risk models may not always be able to accurately predict the future credit risk of our customers or assign an accurate credit score, which may result in our exposure to higher credit risks than indicated by our risk assessment system. We also rely on certain publicly available customer credit information, information relating to credit agreements and other public sources to assess a customer’s creditworthiness. Due to limitations in the availability of information and the developing information infrastructure in the markets in which we operate, our assessment of credit risk associated with a particular customer may not be based on complete, accurate or reliable information. In addition, we cannot ensure that our credit scoring systems collect complete or accurate information reflecting the actual behavior of customers or that their credit risk can be assessed correctly. Without complete, accurate and reliable information, we have to rely on other publicly available resources and our internal resources, which may not be effective. As a result, our ability to effectively manage our credit risk and subsequently determine our credit loss allowances may be materially adversely affected.

Relatedly, we are exposed to counterparty risk, which may arise from, for example, investing in securities of third parties, entering into derivative contracts under which counterparties have obligations to make payments to us or executing securities, futures or currency trades from proprietary trading activities that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, clearing houses or other financial intermediaries. Many of the routine transactions we enter into expose us to significant risk in the event of default by one of our significant counterparties, although we do not currently face specific counterparty risk from concentration within our loan portfolio. If these risks give rise to losses, this could materially and adversely affect us. Separately, because we routinely transact with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks and other institutional customers, defaults by, and even rumors or questions about the solvency of, certain financial institutions and the financial services industry could lead to market-wide liquidity problems that could lead to substantial losses for our business.

We also face operational and foreign exchange risk. Although we have adopted policies and procedures to identify, monitor and manage our operational risk, these policies and procedures may not be fully effective. For a discussion of the risks we face with respect to foreign exchange rates, see “—Risks Relating to the Countries in Which We Operate—Exchange rate instability may have a material adverse effect on the economies of the countries in which we operate and the price of our Class A ordinary shares and BDRs.”

If our policies and procedures are not fully effective or we are not successful in capturing all risks to which we are or may be exposed, we may suffer harm to our reputation or be subject to litigation or regulatory actions that could have a material adverse effect on our business, results of operations or financial condition. Further, if management were to rely on risk models – whether with respect to market, credit or operational risks – that were flawed or poorly developed, implemented or used, or if management were to misunderstand or use such information for purposes for which it was not designed, we may fail to adequately manage our risk. In addition, if existing or potential customers or counterparties believe our risk management is inadequate, they could take their business elsewhere or seek to limit their transactions with us. Further, certain of the models and other analytical and judgment-based estimations we use in managing risk are subject to review by, and require the approval of, our regulators. If our models do not comply with their expectations, our regulators may require us to make changes to such models, may approve them with additional capital requirements or we may be precluded from using them, any of which could limit our ability to expand our businesses.

Failure to effectively implement, consistently monitor or continuously refine our risk management systems may result in a material adverse effect on our reputation, operating results and financial condition.

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Our international expansion efforts may not be successful, or may subject our business to increased risks.

We currently operate in Brazil, Mexico and Colombia, and we have information technology and support operations in Argentina, Germany and the United States. As part of our growth strategy, we may expand our operations by offering our products and services in additional regions, as well as additional countries in Latin America, where we have little or no experience, and by expanding our business in the jurisdictions in which we currently operate. We may not be successful in expanding our operations into these or other markets in a cost-effective or timely manner, if at all, and our products and services may not experience the same market adoption in such international jurisdictions as we have enjoyed in Brazil. In particular, the expansion of our business into new geographies (or the further expansion in geographies in which we currently operate) may depend on the local regulatory environment, or require a close commercial relationship with one or more local banks or other intermediaries, which could prevent, delay or limit the introductions of our products and services in such countries. Local regulatory environments may vary widely in terms of scope and sophistication.

Further, our international expansion efforts have and will continue to place a significant strain on our personnel (including management), technical, operational and financial resources, and our current resources may not be adequate to support our planned geographical expansion. We also may not be able to recoup our investments in new geographies in a timely manner, if at all. If our expansion efforts are unsuccessful, including because potential customers in a given jurisdiction fail to adopt our products and services, our reputation and brand may be harmed, and our ability to grow our business and revenue may be adversely affected.

Even if our international expansion efforts are successful, international operations will subject our business to increased risks, including:

increased licensing and regulatory requirements;

competition from service providers or other entrenched market participants that have greater experience in the local markets than we do;

increased costs associated with and difficulty in obtaining, maintaining, processing, transmitting, storing, handling and protecting intellectual property, proprietary rights and sensitive data;

changes to the way we do business as compared with our current operations;

a lack of acceptance of our products and services;

the ability to support and integrate with local third-party service providers;

difficulties in staffing and managing foreign operations in an environment of diverse culture, language, laws and customs;

difficulties in recruiting and retaining qualified employees and maintaining our company culture;

increased travel, infrastructure and legal and compliance costs;

compliance obligations under multiple, potentially conflicting and changing, legal and regulatory regimes, including those governing financial institutions, payments, data privacy, data protection, information security, anti-corruption, anti-bribery and anti-money laundering;

compliance with complex and potentially conflicting and changing tax regimes;

potential tariffs, sanctions, fines or other trade restrictions;

exchange rate exposure;

increased exposure to public health issues such as the COVID-19 pandemic, and related industry and governmental actions to address these issues; and

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regional economic and political instability.

As a result of these risks, our international expansion efforts may not be successful or may be hampered, which would limit our ability to grow our business.

Our continued growth depends in part on the ability of our existing and potential customers to access our products and platform capabilities at any time and within an acceptable amount of time. Continued access to our products and platform capabilities depends on the efficient and uninterrupted operation of numerous systems, including our computer systems, software, data centers and telecommunications networks, as well as the systems of third parties, such as credit and debit card transaction authorization providers, national financial system network infrastructure providers, back office and business process support, information technology production and support, Internet and telephone connections, network access, data center infrastructure services and cloud storage and computing. However, these systems and technologies are vulnerable to disruptions, failures or slowdowns. We have experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of customers accessing our products and platform capabilities simultaneously, denial of service attacks or other security-related incidents, natural disasters, power outages, terrorist attacks, hostilities, and other events beyond our control.

As our business grows, it may become increasingly difficult to maintain and improve performance of our information technology systems, especially during peak usage times and as our products and platform capabilities become more complex and our customer traffic increases. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations may be adversely affected. Specifically, if our products and platform capabilities are unavailable or if our customers are unable to access our products and platform capabilities within a reasonable amount of time, we may experience a loss of customers, lost or delayed market acceptance of our platform and products, delays in payment to us by customers, injury to our reputation and brand, the diversion of our resources, additional operating and development costs, loss of revenue, legal claims against us, the loss of licenses, loss of Central Bank of Brazil authorizations or fines or other penalties imposed by the Central Bank of Brazil (including intervention, temporary special management systems, the imposition of insolvency proceedings or the out-of-court liquidation of our operating subsidiaries), or by the Brazilian National Data Protection Authority (Autoridade Nacional de Proteção de Dados, or the “ANPD”). In addition, we do not maintain insurance policies specifically for property and business interruptions, meaning we would directly and without setoff incur any losses we suffer as a result of the aforementioned occurrences.

Our business is highly dependent on the ability of our information technology systems to accurately process a large number of highly complex transactions across numerous and diverse markets and products in a timely manner and at high processing speeds, and on our ability to rely on our digital technologies, computer and email services, software and networks, as well as on the secure processing, storage and transmission of confidential data and other information on our computer systems and networks. Specifically, the proper functioning of our financial control, risk management, accounting, customer service and other data processing systems is critical to our business and our ability to compete effectively. Any failure to deliver an effective and secure service, or any performance issue that arises with a service, could result in significant processing or reporting errors or other losses. See “—We depend on data centers operated by third parties and third-party Internet hosting providers and cloud computing platforms, and any disruption in the operation of these facilities or platforms or access to the Internet could adversely affect our business.”

We do not operate all of our systems on a real-time basis and cannot assure that our business activities would not be materially disrupted if there were a partial or complete failure of any of these primary information technology systems or communication networks. In particular, because all customer transactions on the Nu Platform occur on our mobile application, any failure of our mobile application would cause our platform and services to be unavailable to our customers. Such failures could be caused by, among other things, major natural catastrophes,

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software bugs, computer virus attacks, conversion errors due to system upgrading, security breaches caused by unauthorized access to information or systems or malfunctions, loss or corruption of data, software, hardware or other computer equipment. Any such failures would disrupt our business and impair our ability to provide our services and products effectively to our customers, which could adversely affect our reputation as well as our business, results of operations and financial condition.

Our ability to remain competitive and achieve further growth will depend in part on our ability to upgrade our information technology systems and increase our capacity on a timely and cost-effective basis. We must continually make significant investments and improvements in our information technology infrastructure in order to remain competitive. We cannot guarantee that in the future we will be able to maintain the level of capital expenditures necessary to support the improvement or upgrading of our information technology infrastructure. Any substantial failure to improve or upgrade our information technology systems effectively or on a timely basis would materially and adversely affect our business, financial condition or results of operations.

Our business requires the ongoing availability and uninterrupted operation of internal and external transaction processing systems and services. We primarily serve our customers from third-party data center hosting facilities provided by a third-party service provider, which we rely on to operate certain aspects of our solutions, and we depend on third-party Internet-hosting providers and continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business. Any disruption of or interference with our use of such services would impair our ability to deliver our solutions to our customers, resulting in customer dissatisfaction, damage to our reputation, loss of customers and harm to our business. Further, we have designed our solutions and computer systems to use data processing, storage capabilities and other services provided by such third-party service providers. As such, we cannot easily switch our operations to another cloud provider, so any disruption of or interference with our use of such providers’ services would increase our operating costs and could materially and adversely affect our business, financial condition and results of operations, and we might not be able to secure service from an alternative provider on similar terms or at all.

While we maintain oversight of our third-party data center hosting facilities and Internet-hosting providers, such third parties are ultimately responsible for maintaining their own network security, disaster recovery and system management procedures, and such third-parties do not guarantee that our customers’ access to our solutions will be uninterrupted, error-free or secure. These third-party providers may experience website disruptions, outages and other performance problems, which may be caused by a variety of factors, including infrastructure changes, human or software errors, viruses, security attacks, fraud, spikes in customer usage and denial of service issues. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. In particular, we do not control the operation of the third-party data center hosting facilities, and such facilities are vulnerable to damage or interruption from human error, intentional bad acts, power loss, hardware failures, telecommunications failures, improper operation, unauthorized entry, data loss, power loss, cyberattacks, fires, wars, terrorist attacks, floods, earthquakes, hurricanes, tornadoes, natural disasters or similar catastrophic events. They also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or terminate our hosting arrangement or other unanticipated problems could result in lengthy interruptions in the delivery of our solutions, cause system interruptions, prevent our customers from accessing their accounts online, reputational harm and loss of critical data, prevent us from supporting our solutions or cause us to incur additional expense in arranging for new facilities and support.

If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted, for example due to viruses or denial of service or other attacks on their systems, or due to human error, intentional bad acts, power loss, hardware failures, telecommunications failures, fires, wars, terrorist attacks, floods, earthquakes, hurricanes, tornadoes or similar catastrophic events, we could experience disruption in our ability to offer our solutions and adverse perception of our solutions’ reliability, or we could be required to retain the services of replacement providers, which could increase our operating costs and materially and adversely affect our business, financial condition and results of operations.

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Furthermore, prolonged interruption in the availability, or reduction in the speed or other functionality, of our products or services could materially harm our reputation and business. Frequent or persistent interruptions in our products and services could cause customers to believe that our products and services are unreliable, leading them to switch to our competitors or to avoid our products and services, and would likely permanently harm our reputation and business.

Any of the foregoing, in addition to any of the factors described in “—We are dependent on third-party service providers in our operations, any failure of a third-party service provider could disrupt our operations,” could have a material adverse effect on our business, financial condition and results of operations.

Negative publicity about us (including our directors or employees) or our industry could adversely affect our business, financial condition, results of operations and future prospects.

Negative publicity about us (including our directors or employees) or our industry, including the transparency, fairness, customer experience, quality and reliability of our products or services, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, our ESG and diversity and inclusion practices, litigation, regulatory activity, misconduct by or statements made by our directors or employees, funding sources, service providers or others in our industry, could adversely affect our reputation and the confidence in, and the use of, our products and services. For example, in late 2020, we issued a public apology and reaffirmed our commitment to diversity after comments made by one of our co-founders received significant negative publicity. This and any future negative publicity could harm our reputation and cause disruptions to business. Any such reputational harm could further affect the behavior of customers and, as a result, materially and adversely affect our business, results of operations, financial condition, and future prospects.

The credit quality of our loan portfolio may deteriorate and our ECL allowance could be insufficient to cover our losses, which would have a material adverse effect on our business, financial condition and results of operations.

Risks arising from changes in credit quality and the recoverability of amounts due from counterparties are inherent in many aspects of our businesses, in particular our consumer credit card and lending businesses. We expect the amount of reported non-performing loans to increase in the future on an absolute basis as a result of the expected growth in our total loan portfolio, the credit quality of which may turn out to be worse than anticipated. The amount of reported non-performing loans may also increase due to factors beyond our control, such as adverse changes in the credit quality of our borrowers and counterparties or a general deterioration in economic conditions in the markets in which we operate.

Our provisions for credit losses are based on our current assessments and expectations concerning various factors affecting the quality of our loan portfolio. These factors include, among other things, our borrowers’ financial condition, government macroeconomic policies, interest rates and the legal and regulatory environment. As many of these factors are beyond our control and there is no infallible method for predicting loan and credit losses, we cannot guarantee that our current or future reserves for credit losses will be sufficient to cover actual losses. If our assessment of and expectations concerning the above-mentioned factors differ from actual developments, if the quality of our total loan portfolio deteriorates, for any reason, or if the future actual losses exceed our estimates of expected losses, we may be required to increase our provisions for credit losses, which may adversely affect our financial condition. As such, any unexpected increase in the level of our non-performing loans could have a material adverse effect on our financial condition.

We depend on key management, as well as our experienced and capable employees, and any failure to attract, motivate and retain our employees would harm our ability to maintain and grow our business.

Our business functions at the intersection of rapidly changing technological, social, economic and regulatory developments that require a wide-ranging set of expertise and intellectual capital. Our future success is significantly dependent upon the continued service of our executives and other key employees, and in particular our founding shareholder and chief executive officer David Vélez Osorno. If we lose the services of any member of management or any key employee, we may not be able to locate a suitable or qualified replacement, and we may incur additional expenses to recruit and train a replacement, which would severely disrupt our business and growth.

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To maintain and grow our business, we will need to identify, attract, hire, develop, motivate and retain highly skilled employees, which requires significant time, expense and effort. Competition for highly skilled personnel is intense, in our industry in particular. We may need to invest significant amounts of cash and equity to attract and retain new employees, and we may never realize returns on these investments. In addition, from time to time, there may be changes in our management team that may be disruptive to our business. If our management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business would be harmed.

Furthermore, our international expansion and our business in general may be materially adversely affected if legislative or administrative changes to immigration or visa laws and regulations impair our hiring processes or projects involving personnel who are not citizens of the country where their work is to be performed. If we are not able to add and retain employees effectively, our ability to achieve our strategic objectives will be adversely affected, and our business and growth prospects will be harmed.

If we fail to manage our growth effectively, our business would be harmed.

We have experienced and expect in the near-term to continue to experience rapid growth. For instance, our total revenue increased by 20.4%, reaching US$737.1 million in 2020 from US$612.1 million in 2019. On an FX Neutral basis, our total revenue increased by 59.7%, reaching US$693.5 million in 2020 from US$434.3 million in 2019. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures.” The number of our full-time employees increased by 19%, from 2,453 as of December 31, 2019 to 2,909 as of December 31, 2020. Our growth has placed and will continue to place significant demands on our administrative, operational and financial resources. Our ability to effectively manage our growth will depend on a number of factors, including our ability to:

expand our sales and marketing, technology, finance and administration teams;

grow our facilities and infrastructure;

adapt and scale our information technology systems;

refine our operational, financial and risk management controls and reporting systems and procedures.

recruit, integrate, train and retain a growing employee base and maintain our corporate culture;

maintain and grow our customer base and provide quality customer service; and

obtain, maintain, protect and develop our strategic assets, including our intellectual property and other proprietary rights.

Executing on these factors will require significant capital expenditures and allocation of valuable management and employee resources. We may be unable to effectively manage any future growth in an efficient, cost-effective or timely manner, or at all. Any failure to successfully implement systems enhancements and improvements will likely negatively impact our ability to manage our expected growth, ensure uninterrupted operation of key business systems and comply with the rules and regulations that are applicable to public reporting companies. Moreover, if we do not effectively manage the growth of our business and operations, the quality of our platform would suffer, which would negatively affect our reputation, results of operations and overall business. Furthermore, we encourage employees to quickly develop and launch new features for our products and services; as we grow, we may not be able to execute as quickly as smaller, more efficient organizations.

A decline in the use of credit, debit or prepaid cards as a payment mechanism for consumers or adverse developments with respect to the payment processing industry in general would have a materially adverse effect on our business, financial condition and results of operations.

If consumers do not continue to use credit, debit or prepaid cards as a payment mechanism for their transactions or if there is a change in the mix of payments between cash, credit, debit and prepaid cards and other means of payment, including real-time payments, that is adverse to us, it would have a material adverse effect on our business, financial condition and results of operations. We believe future growth in the use of credit, debit and prepaid cards

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and other means of payment will be driven by the cost, ease-of-use and quality of services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to use electronic payment methods including credit, debit and prepaid cards and real-time payment methods, such as PIX. Moreover, if there is an adverse development in the payments industry or Brazilian market in general, such as new legislation or regulation that makes it more difficult for our customers to do business or utilize such payment mechanisms, our business, financial condition and results of operations may be adversely affected.

We have historically derived a substantial portion of our revenue from our credit card business, and losses or a significant reduction in, our credit card business, or our failure to successfully expand and diversify our revenue sources beyond our credit card business, would adversely affect our business, financial condition and results of operations.

The commercial success of our consumer technology platform has depended and may continue to depend in part on the success of our credit card business. We have historically derived a significant portion of our revenue from (i) the interchange fees we collect when a customer uses a Nu credit card to make a purchase and (ii) the interest rates we receive from the financing or revolving of Nu credit card bills by our customers. In the year ended December 31, 2020, interchange fees and interest related to credit cards accounted for 34% and 29% of our revenue, respectively. While we expect our revenue concentration to decline in the future as we expand our suite of products and services, our efforts to diversify may not be successful and our reliance on credit card-related revenue may increase. Further, our revenue would be significantly harmed if we were to lose all or a substantial portion of our credit card business, whether due to loss of customers, regulatory developments or otherwise.

If we are unable to attract new and retain existing customers, our business, financial condition and results of operations will be adversely affected.

We believe that our customer base is the cornerstone of our business. The growth of our business depends on existing customers expanding their use of our products and services and on our ability to attract new customers, including customers who may be reluctant to seek alternatives to traditional financial institutions, by offering new products and services. If we are unable to attract new customers to our platform or encourage customers to broaden their use of our products and services, our growth may slow or stop, and our business may be materially and adversely affected.

Our ability to maintain and expand our customer base depends on a number of factors, including our ability to provide relevant and timely products and services to meet their changing needs at a reasonable cost. We have invested and will continue to invest in improving our platform and our suite of products and services. For example, we recently acquired NuInvest, our broker-dealer subsidiary, and have announced plans to expand our insurance broker activities. However, if new or improved features, products and services fail to meet shifting customer demands and fail to attract new customers or encourage existing customers to expand their engagement with our products and services, our growth may slow or decline. Further, these and other new products and services must achieve high levels of market acceptance before we are able to recoup our up-front investment costs, which may never occur if such products and services fail to attract new and retain existing customers.

Our existing and new products and services, including our payments, investments, insurance and credit solutions, could fail to attract new and retain existing customers for many reasons, including:

we may fail to predict market demand accurately and provide products and services that meet this demand in a timely fashion;

customers may not like, find useful or agree with any changes we make to our products or services;

the reliability, performance or functionality of our products and services could be compromised or the quality of our products and services could decline;

we may fail to provide sufficient customer support;

customers may dislike our pricing, in particular in comparison to the pricing of competing products and services;

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competing products and services may be introduced or anticipated to be introduced by our competitors; and

there may be negative publicity about our products and services or our platform’s performance or effectiveness, including negative publicity on social media platforms.

Further, our customers have no obligation to continue to use our products and services, and we can make no assurances that our customers will continue to do so. We generally do not have long-term contracts with our customers; customer deposits and investments may be withdrawn without notice, and the consumer credit solutions we offer may be prepaid and cancelled at any time. Further, recent changes in regulations have increasingly enabled customers to more easily switch to our competitors.

Any one or a combination of these factors could lead to customer attrition, and in particular at rates that are higher than we expect, which would adversely affect our business, financial condition and results of operations.

If we cannot keep pace with rapid technological developments to provide new and innovative products and services, the use of our products and services and, consequently, our revenue could decline or our revenue growth rate could slow.

Rapid, significant and disruptive technological changes have impacted or may in the future impact the industries in which we operate, including changes in:

artificial intelligence and machine learning (e.g., in relation to fraud and risk assessment);

payment technologies (e.g., real-time payments, payment card tokenization, virtual and crypto currencies, including distributed ledger and blockchain technologies, and proximity payment technology, such as near-field communication and other contactless payments);

mobile and internet technologies (e.g., mobile phone app technology);

commerce technologies, including for use in-store, online and via mobile, virtual, augmented or social-media channels; and

digital banking features (e.g., balance and fraud monitoring and notifications).

In order to remain competitive and maintain and enhance customer experience and the quality of our products and services, we must continuously invest in the development of new products and features to keep pace with technological developments. We currently rely, and expect to continue to rely, in part, on certain third parties for the development of, and access to, new technologies. However, there can be no assurance that our development efforts, including through such third-party providers, will be successful, as we or such third parties may experience cost overruns, delays in delivery, performance failure or lack of customer adoption, among other potential issues. Further, there can be no assurance that our financial resources will be sufficient to maintain the levels of investment required to support such development efforts, which may require substantial capital commitment. Any failure in our development efforts, including any failure to adopt emerging technologies or to accurately predict and address market demand, and any delay in delivery of new products or services integrating emerging technologies, could render our services less desirable, or even obsolete, to our customers. Furthermore, our competitors may have the ability to devote more financial and operational resources than we can to the development of new technologies and services and, if successful, their development efforts could render our services less desirable to customers, resulting in the loss of customers or a reduction in the fees we can generate. If our development efforts prove unsuccessful, or if we are unable to develop, adapt to or access technological changes on a timely and cost-effective basis, our business, financial condition and results of operations could be materially adversely affected.

We are dependent on third-party service providers in our operations, any failure of a third-party service provider could disrupt our operations.

We utilize numerous third-party service providers in our operations, including payments, credit card transaction processing, back office and business process support, information technology production and support, internet connections, network access and cloud computing. For example, our credit and debit card transaction authorization is provided by Mastercard, our infrastructure services and connection to the National Brazilian Financial System

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Network, or “RSFN,” depends on the infrastructure of Rede de Telecomunicações para o Mercado Ltda., or “RTM,” a datacenter and link provider, our cloud data processing and storage services and, separately, our datacenter infrastructure services are both provided by third-party service providers, among other third-party service providers on which we rely for the continuity of our business. A failure by a third-party service provider could expose us to an inability to provide contractual services to our customers in a timely manner. Additionally, if a third-party service provider is unable to provide these services, we may incur significant costs to either internalize some of these services or find a suitable alternative. Significantly, certain third-party service providers, including Mastercard, are the sole source or one of a limited number of sources of the services they provide for us. It would be difficult and disruptive for us to replace some of our third-party vendors in a timely manner if they were unwilling or unable to provide us with these services in the future (as a result of their financial or business conditions or otherwise), and our business and operations likely would be materially adversely affected. Further, any failure in the performance of our due diligence processes and controls related to the supervision and oversight of these third parties in detecting and addressing conflicts of interest, fraudulent activity, data breaches and cyber-attacks, noncompliance with relevant securities and other laws could cause us to suffer financial loss, regulatory sanctions or damage to our reputation.

Inadequacy or disruption of our disaster recovery plans and procedures in the event of a catastrophe would adversely affect our operations.

We have made a significant investment in our infrastructure, and our operations are dependent on our ability to protect the continuity of our infrastructure against damage from catastrophe or natural disaster, breach of security, cyber-attack, loss of power, telecommunications failure or other natural or man-made events. A catastrophic event could have a direct negative impact on us by adversely affecting our customers, partners, third-party service providers, employees or facilities, or an indirect impact on us by adversely affecting the financial markets or the overall economy. If our business continuity and disaster recovery plans and procedures were disrupted, inadequate or unsuccessful in the event of a catastrophe, we could experience a material adverse interruption of our operations.

We serve our customers using third-party data centers and cloud services. While we have electronic access to the infrastructure and components of our platform that are hosted by third parties, we do not control the operation of these facilities. Consequently, we may be subject to service disruptions as well as failures to provide adequate support for reasons that are outside of our direct control. These data centers and cloud services are vulnerable to damage or interruption from a variety of sources, including earthquakes, floods, fires, power loss, system failures, cyber-attacks, physical or electronic break-ins, human error or interference (including by employees, former employees or contractors), and other catastrophic events. Our data centers may also be subject to local administrative actions, changes to legal or permitting requirements and litigation to stop, limit or delay operations. Despite precautions taken at these facilities, such as disaster recovery and business continuity arrangements, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in interruptions or delays in our services, impede our ability to scale our operations or have other adverse impacts upon our business. See “—We depend on data centers operated by third parties and third-party Internet hosting providers and cloud computing platforms, and any disruption in the operation of these facilities or platforms or access to the Internet could adversely affect our business.”

Our disclosure controls and procedures over financial reporting may not prevent or detect all errors or acts of fraud.

Disclosure controls and procedures, including internal controls over financial reporting, are designed to provide reasonable assurance that information required to be disclosed by the company in reports filed or submitted under the U.S. Securities Exchange Act of 1934, as amended, or the “Exchange Act,” is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

These disclosure controls and procedures have inherent limitations, which include the possibility that judgments in decision-making can be faulty and result in errors or mistakes. Additionally, controls can be circumvented by any unauthorized override of the controls. Consequently, our business is exposed to risk from potential noncompliance with policies, employee misconduct, negligence and fraud, which could result in regulatory sanctions, civil claims and serious reputational or financial harm. In particular, it is not always possible to deter employee misconduct, and

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the precautions we take to prevent and detect this activity may not always be effective. Accordingly, because of the inherent limitations in the control system, misstatements due to error or fraud may occur and not be detected.

We have identified material weaknesses in our internal control over financial reporting for the year ended December 31, 2020 and, if we fail to remediate such deficiencies (or identify and remediate other material weaknesses) and maintain effective internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.

Our management initiated a structured review of our internal control over financial reporting and procedures more than one year prior to the date of this prospectus, identifying risks, gaps and weaknesses and implementing procedures to remediate them, and is in the process of implementing industry-specific best practices for our financial, operational and technological processes. Our management has not completed an assessment of the effectiveness of our internal control over financial reporting under the Sarbanes-Oxley Act of 2002 and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, as part of our management’s review noted above and in connection with the audit of our consolidated financial statements for the year ended December 31, 2020, we identified certain material weaknesses in our internal control over financial reporting related to (i) IT systems change management processes, (ii) IT user identity and access management processes and (iii) financial reporting closing processes. A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

We have adopted remediation measures with respect to the material weaknesses identified above, which measures we expect to be implemented within the next twelve months, including hiring experienced key personnel in our financial reporting function, implementing new processes and procedures over the financial reporting process, and information technology controls, improving our internal controls to provide additional levels of review, enhancing our documentation practices, implementing new software solutions and increasing our personnel training. We believe these measures, once implemented, should adequately remediate the material weaknesses identified above, though as of the date of this prospectus we have not been able to complete implementation nor our testing of the effectiveness of the remediation measures.

We cannot guarantee that the measures we have taken to date and actions we may take in the future will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. Any failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our consolidated financial condition or results of operations, which could cause investors to lose confidence in our financial statements, and the trading price of our Class A ordinary shares and BDRs to decline. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Material Weakness in Internal Controls and Remediation.”

Under Section 404 of the Sarbanes-Oxley Act of 2002, our management is not required to assess or report on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F for the fiscal year ending December 31, 2021. We are only required to provide such a report for the fiscal year ending December 31, 2022. At that time, our management may conclude that our internal control over financial reporting is not effective. Until we cease to be an “emerging growth company” as such term is defined in the JOBS Act, which may not be until after five full fiscal years following the date of this offering, our independent registered public accounting firm is not required to attest to and report on the effectiveness of our internal control over financial reporting. Once we cease to be an “emerging growth company”, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may disagree with our assessment and may issue a report that contains an adverse opinion if, in their evaluation, there are deficiencies that, individually or in combination, result in one or more material weaknesses. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control

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over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our consolidated financial statements, fail to meet our reporting obligations or fail to prevent fraud, which would likely cause investors to lose confidence in our reported financial information. This would, in turn, limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Class A ordinary shares and BDRs. Additionally, ineffective internal control over financial reporting would expose us to increased risk of fraud, misuse of corporate assets and shareholder litigation, and could subject us to potential delisting from Nasdaq/NYSE, regulatory investigations and civil or criminal sanctions.

Our results of operations and operating metrics may fluctuate, and we have generated and may continue to generate losses, which may cause the market price of our Class A ordinary shares and BDRs to decline.

We generated a US$49.5 million loss for the three months ended March 31, 2021, and a US$171.5 million, US$92.5 million and US$28.6 million loss for the years ended December 31, 2020, 2019 and 2018, respectively. We intend to continue to make significant investments in our business, including with respect to our employee base; sales and marketing; development of new products, services and features; acquisitions; expansion of infrastructure; expansion of international operations; and general administration, including legal, finance and other compliance expenses related to being a public company. If these costs materially rise in the future, our expenses may rise significantly. If we are unable to generate adequate revenue growth and manage our expenses, we may incur significant losses and may not attain profitability.

In addition, we intend to expand our customer base, and continue to invest in developing products and services that we believe will improve the experiences of our customers and therefore improve our long-term results of operations. However, customer acquisition could cause us to incur losses in the short term because costs associated with new customers are generally incurred up front, while revenue is uncertain and mostly recognized thereafter as customers make interest payments and utilize our services. Likewise, improvements in products and services have and will continue to cause us to incur significant up-front costs and may not result in the long-term benefits that we expect, which could materially and adversely affect our business. Both could cause our results of operations and operating metrics to fluctuate.

Our results of operations and operating metrics are also subject to volatility based on consumer spending levels. The electronic payments industry in general depends heavily on the overall level of consumer spending, which may be adversely affected by general or localized economic conditions that impact consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. A sustained deterioration in general economic conditions in the markets in which we operate, including a rise in unemployment rates (particularly in Latin America) or increases in interest rates, may cause a reduction in overall consumer spending, thereby causing a decline in the number of transactions made by our cardholders or in the average amount spent per transaction, which would adversely impact our results of operations. In addition, our business is affected by customer behavior throughout the year and experiences seasonal fluctuations. We are aware, based on historical information, that months in which certain holidays fall, such as Black Friday and Christmas, generate higher levels of consumption and thus positively benefit our total transaction volume and related revenue. Relatedly, February is a month with lower revenue given fewer calendar days and thus a lower monthly volume of transactions.

Further, from time to time, we have made and may make decisions that will have a negative effect on our short-term operating results if we believe those decisions will improve our operating results over the long term. These decisions may not produce the long-term benefits that we expect, or they may be inconsistent with the expectations of investors and research analysts, either of which could cause the price of our Class A ordinary shares and BDRs to decline.

Real or perceived inaccuracies in our key operating metrics may harm our reputation, results of operations and financial condition.

We track certain key operating metrics such as number of total customers, active customers, purchase volume, average revenue per active customer and our net promoter score, among other metrics, which are not independently verified by any third party. While the metrics presented in this prospectus are based on what we believe to be reasonable assumptions and estimates, our internal systems and tools have a number of limitations, and our

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methodologies for tracking these metrics may change over time. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If the internal systems and tools we use to track these metrics understate or overstate performance or contain algorithmic or other technical errors, the key operating metrics we report may not be accurate. If investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our results of operations and financial condition could be adversely affected.

We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow as our business matures.

We were founded in 2013 and began operations in Brazil in 2014, in Mexico in 2019 and in Colombia in 2020. As a result of our limited operating history, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties. Our historical revenue growth and other historical results should not be considered indicative of our future performance. In particular, over the long-term, we expect that our revenue growth will slow as our business matures. It is also possible that our revenue growth does not reach the levels we expect, or declines for any number of reasons, including slowing demand for our products, increasing competition, changes to technology, a decrease in the growth of our overall market, increased regulation or our failure, for any reason, to take advantage of growth opportunities. If our assumptions regarding our future revenue growth and other operating and financial results are incorrect or change, our operating and financial results could differ materially from our expectations.

Our insurance policies may not be sufficient to cover all claims.

Our insurance policies may not adequately cover all risks to which we are exposed. A significant claim not covered by our insurance, in full or in part, may result in significant expenditures by us. Moreover, we may not be able to maintain insurance policies in the future at reasonable costs or on acceptable terms, which may adversely affect our business and the trading price of our Class A ordinary shares and BDRs.

Fraud could have a material adverse effect on our business, financial condition and results of operations.

We offer products and services to a large number of customers, and we are responsible for vetting and monitoring these customers and determining whether the transactions we process for them are legitimate. When our products and services are used to process illegitimate transactions and we settle those funds, we are unable to recover them, suffer losses and incur liabilities. These types of illegitimate transactions can also expose us to governmental and regulatory sanctions. The highly automated nature of, and liquidity offered by, our payments services make us a target for illegal or improper uses, including fraudulent or illegal sales of goods or services, money laundering and terrorist financing. Identity thieves and those committing fraud using stolen or fabricated credit card or account numbers, or other deceptive or malicious practices, potentially can steal significant amounts of money from businesses like ours. It is possible that incidents of fraud could increase in the future. Failure to effectively manage risk and prevent fraud would increase our liability, and could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to integrate our products with a variety of operating systems, software applications, platforms and hardware that are developed by others, our solutions may not operate effectively, our products may become less marketable, less competitive or obsolete and our business, financial condition and results of operations may be harmed.

Our products must integrate with a variety of network, hardware and software platforms, and we need to continuously modify and enhance our products to adapt to changes in hardware, software, networking, browser and database technologies. In particular, we have developed our technology platform to easily integrate with third-party applications through the interaction of application programming interfaces, or “APIs.” In general, we rely on the fact that the providers of such software systems continue to allow us access to their APIs to enable these integrations. To date, we generally have not relied on long-term written contracts to govern our relationship with these providers. Instead, we are subject to the standard terms and conditions for application developers of such providers, which govern the distribution, operation and fees of such software systems, and which are subject to change by such providers from time to time. Our business could be harmed if any provider of such software or other technologies or systems:

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discontinues or limits our access to its APIs;

modifies its terms of service or other policies, including fees charged to or other restrictions on us or other application developers;

changes how customer information is accessed by us, our partners or our customers;

establishes more favorable relationships with one or more of our competitors; or

develops or otherwise favors its own competitive offerings over ours.

Although we actively monitor our partners and multi-source venders, we cannot prevent our providers of software or other technologies from changing the features of their APIs, discontinuing their support of such APIs, restricting our access to their APIs or altering the terms governing their use in a manner that is adverse to our business. If our partners or multi-source vendors were to take such actions, our capabilities that depend on such APIs would be impaired until we are able to find a replacement partner or develop an in-house solution, which could significantly diminish the value of our platform and harm our business, operating results and financial condition. In addition, third-party services and products are constantly evolving, and we may not be able to modify our platform to maintain its compatibility with such services and products as they continue to develop, or we may not be able to make such modifications in a timely and cost-effective manner, any of which could harm our business, operating results and financial condition.

If we are unable to operate effectively on mobile platforms, our business, financial condition and results of operations could be materially adversely affected.

Our future growth and success are dependent in part on our ability to provide a functional, reliable and user-friendly mobile platform to our customers. In particular, as we expand geographically, we will need to provide solutions for customers living in areas with low Internet connectivity, reduced bandwidth and latency issues. Our success will also depend on the interoperability of our offerings with a range of third-party technologies, systems, networks, operating systems and standards, including iOS and Android, and the availability of our mobile apps in app stores and in “super-app” environments.

The success of our mobile app could be harmed by factors outside our control, such as:

actions taken by mobile app distributors;

unfavorable treatment received by our mobile apps, especially as compared to competing apps, such as the placement of our mobile apps in a mobile app download store;

increased costs in the distribution and use our mobile app;

changes, bugs or technical issues in mobile operating systems, such as iOS and Android, device manufacturers or mobile carriers that degrade the functionality of our mobile website or mobile apps or give preferential treatment to competitive offerings;

changes to the terms of service or policies of mobile operating systems, device manufacturers or mobile carriers that reduce or eliminate our ability to distribute applications, limit our ability to target or measure the effectiveness of our applications or impose fees or other changes related to our delivery of our applications; and

government action limiting the accessibility of our mobile app.

Further, we are subject to the standard policies and terms of service of third-party operating systems, as well as policies and terms of service of the various application stores that make our application and experiences available to our customers. These policies and terms of service govern the availability, promotion, distribution, content and operation generally of applications and experiences on such operating systems and stores. Each provider of these operating systems and stores has broad discretion to change and interpret its terms of service and policies with respect to our platform and any such changes, which may be driven by many factors, including increased

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competition, may be unfavorable to us and our customers’ use of our platform. If we were to violate, or an operating system provider or application store believes that we have violated, its terms of service or policies, that operating system provider or application store could limit or discontinue our access to its operating system or store. In some cases these terms of service or policies may not be clear or our interpretation of the requirements may not align with the interpretation of the operating system provider or application store, which could lead to inconsistent enforcement of these terms of service or policies against us. Any limitation or discontinuation of our access to any third-party platform or application store could adversely affect our business, financial condition or results of operations.

Additionally, in order to deliver a high-quality mobile experience for our customers, it is important that our products and services work well with a range of mobile technologies, products, systems, networks, hardware and standards that we do not control, and that we have good relationships with mobile operating system partners, device manufacturers and mobile carriers. We may not be successful in maintaining or developing relationships with key participants in the mobile ecosystem or in developing products that operate effectively with these technologies, products, systems, networks or standards. In the event that it is more difficult for our customers to access and use our mobile platform, or if our customers choose not to access or use our mobile platform on their mobile devices or use mobile products that do not offer access to our mobile platform, our customer growth and engagement could be harmed. The risks associated with our dependency on our mobile application may be exacerbated by the frequency with which customers change or upgrade their devices. In the event customers choose devices that do not already include or support our platform or do not install our mobile apps when they change or upgrade their devices, our customer engagement may be further harmed.

Any acquisition, partnership or joint venture that we make or enter into could disrupt our business and harm our financial condition and results of operations.

As part of our growth strategy, we intend to continue to evaluate opportunities to acquire, or form partnerships or joint ventures with, businesses, technologies, services and products as such opportunities arise. In June 2021, for example, we acquired the Easynvest Companies, and in 2020 we acquired Cognitect, and we may enter into other strategic transactions or arrangements in the future. We may not, however, be able to identify appropriate acquisition, partnership or joint venture targets in the future, and our efforts to identify such targets may result in a loss of time and financial resources. In addition, we may not be able to successfully negotiate or finance such future acquisitions, partnerships or joint ventures successfully or on favorable term, or to effectively integrate acquisitions into our current business, and we may lose customers or personnel a result of any such strategic transaction (in particular the customers and personnel of an acquired business). The process of integrating an acquired business, technology, service or product into our business may divert management’s attention from our core business, and may result in unforeseen operating difficulties and expenditures and generate unforeseen pressures and strains on our organizational culture. Moreover, we may be unable to realize the expected benefits, synergies or developments that we initially anticipate from such a strategic transaction.

Financing an acquisition or other strategic transaction could result in dilution to existing shareholders from issuing equity securities or convertible debt securities, or a weaker balance sheet from using cash or incurring debt, and equity or debt financing may not be available to us on favorable terms, if at all. In addition, in connection with an acquisition, it is possible that the goodwill that has been attributed, or may be attributed, to the target may have to be written down if the valuation assumptions are required to be reassessed as a result of any deterioration in the underlying profitability, asset quality and other relevant matters. There can be no assurance that we will not have to write down the value attributed to goodwill in the future, which would adversely affect our results of operations and net assets.

Furthermore, we may be unable to complete a proposed transaction if we are unable to obtain required regulatory approvals, which may include approval by the Central Bank of Brazil or Brazil’s Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica, or "CADE"), or other applicable regulatory authorities in the various jurisdictions in which we or a potential acquisition target operate. Even if we are able to obtain regulatory approval, such approval could be subject to certain conditions, which could prevent us from competing for certain customers or in certain lines of business. In addition, we may face contingent liabilities in connection with our acquisitions and joint ventures, including, among others, (1) judicial or administrative proceeding or contingencies relating to the company, asset or business acquired, including civil, regulatory, tax, labor, social security, environmental and intellectual property proceedings or contingencies; and (2) financial, reputational and technical issues, including with respect to accounting practices, financial statement disclosures and internal controls, as well as other regulatory or compliance matters, all of which we may not have

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identified as part of our due diligence process and that may not be sufficiently indemnifiable under the relevant acquisition or joint venture agreement. We cannot guarantee that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

Substantial and increasingly intense competition within our industry may harm our business, financial condition, results of operations, and prospects.

The Latin American market for financial services, and in particular the Brazilian, Mexican and Colombian financial services markets, have become increasingly competitive in recent years. We face significant competition from traditional Brazilian, other Latin American and international banks and other neobanks, payment services providers, investment advisors and brokers, in addition to other new financial technology companies, startups and non-financial companies operating in certain segments of the financial services industry in which we operate. We expect competition to intensify in the future, both as emerging technologies continue to enter the marketplace and as large financial incumbents increasingly seek to innovate the services that they offer that compete with our platform.

Specifically, we face competition in the consumer credit, investment, payments and insurance segments. Our main competitors in the Brazilian consumer credit space include Itaú Unibanco S.A., Banco Bradesco S.A., Banco Santander S.A., Banco Caixa Econômica Federal S.A. and Banco do Brasil S.A. In the Brazilian investment segment, in addition to certain of our competitors in the consumer credit space, our main competitors include Banco BTG Pactual S.A., Banco Inter S.A. and XP Inc. In the Brazilian payments space, in addition to certain of our competitors in the consumer credit and investment spaces, we face competition from MercadoPago.com Representações Ltda., PicPay Serviços S.A., PagSeguro Digital Ltd. and StoneCo Ltd., among others. In addition to existing competition, new competitors may enter the market or existing competitors may offer new or expand existing products or services.

Many of our competitors, in particular traditional banks or competitors that are affiliated with traditional banks, have substantially greater financial, operational and marketing resources than we do. Accordingly, these competitors may be able to offer more extensive or enhanced products and services to customers, or offer such products and services at more attractive rates (including more attractive rates on deposits and rates on loans) or on better terms. As a result, we may be forced to increase our deposit rates, or lower the rates we charge for loans or the fees we charge for other services, or devote significant financial resources to our marketing efforts or developing customized products and services that customers demand, in order to maintain and expand our market share. If this were to occur, we would need to enhance cost control to maintain our margins, and if we are unable to control our costs, our margins and results of operations may be adversely affected. In particular, we have relied primarily on low-touch organic methods of customer acquisition, including an unpaid direct referral method. However, this method of customer acquisition may not be as productive as we would like going forward and could put us at a competitive disadvantage compared to competitors with high-touch customer acquisition models or greater marketing resources. If we are unable to acquire customers through our low-touch organic methods, we may have to increase our marketing investments, or could be unable to grow our revenue and our operating results could be adversely affected.

In addition, certain of our competitors in certain product areas and markets may not be subject to the same regulatory requirements that we are. For example, due to the volume of our payment transactions, we were required to obtain authorization from the Central Bank of Brazil to conduct our business as an issuer of post-paid payment instruments (emissor de instrumento de pagamento pós-pago) and an issuer of electronic currency (emissor de moeda eletrônica), while certain other payment or financial institutions, including certain competitors, can operate without such authorization so long as their payment volume remains below certain thresholds. Further, as a regulated payment institution, our subsidiary Nu Pagamentos is required to comply with a set of regulations that is not applicable to non-regulated payment institutions, including minimum equity capital, minimum net equity, compulsory segregation of customers’ funds maintained in payment accounts, internal controls and cybersecurity requirements, among others. In addition, our subsidiary Nu Financeira, a Brazilian financial institution, has undertaken a commitment before the Central Bank of Brazil to operate with a Basel minimum capital adequacy ratio of 14.0% until 2022, which is a higher capital ratio than those applicable to most other financial institutions operating in Brazil. See “Regulatory Overview” for more information about capital adequacy and other regulatory requirements applicable to us and our operating subsidiaries. As a result, our competitors who are not subject to

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similar regulatory requirements may be able to offer products and services at lower costs, which could put pressure on the pricing and terms that we offer and, as a result, our profit margins.

Further, competition in the financial services industry in Brazil and certain other Latin American markets (including Mexico and Colombia) has increased, both as a result of recent consolidations among financial institutions in such markets, adversely affecting the ability of new market entrants to access material amounts of equity capital, and as a consequence of changes in regulations that (i) increased the ability of customers to switch between financial institutions, (ii) enabled financial institutions to access the financial and personal information of customers, and (iii) established rules for an instant payment arrangement. For example, on May 4, 2020, the CMN and the Central Bank of Brazil implemented the Open Financial System, or “open banking,” in Brazil to facilitate the new market entrants’ access to the financial markets as well as to encourage competition between financial institutions. In particular, the implementing regulations make available to various participants in the Brazilian financial system data relating to customers (where consented to) and services of financial institutions. If we participate in open banking, we will be required to share standardized data related to our customers, service channels, products and services, which would make it easier for other market participants to compete with us. Mexico and Colombia are likewise in the process of implementing an open banking system. Further implementation of open banking may intensify competition in the industry, as the sharing of information between institutions may make it easier for competitors to offer better credit terms and conditions, enabling customers to move such financial obligations from our platform to other competing platforms, which would adversely affect our interest income and therefore our results of operations.

In addition, on November 16, 2020, the Central Bank of Brazil launched the instant payment arrangement, or “PIX,” and the Instant Payment System, or “SPI,” which enable electronic fund transfers in real time around the clock. This ecosystem promotes innovation of the existing payment infrastructure. Although the regulations relating the PIX and SPI ecosystems are subject to further developments from time to time, such initiatives may promote greater competition in the industry, and could cause customers to transition away from the solutions we offer, towards PIX or SPI solutions. In particular, PIX is expected to make processing payments faster and less expensive, fostering additional competition and allowing new entrants to join the market, while also serving as a significant source of data that will contribute to the ongoing transformation of the financial industry in Brazil. Such developments could therefore materially and adversely affect our business and results of operations.

If we are unable to successfully compete, the demand for our platform, products and services could stagnate or substantially decline, and we could fail to retain or grow the number of customers using our platform, which would materially and adversely affect our business, results of operations, financial condition and prospects.

Our hedging strategy may not be able to prevent losses.

We use a range of strategies and instruments, including entering into derivative and other transactions, to hedge our exposure to market, credit and operational risks. Nevertheless, we may not be able to hedge all risks to which we are exposed, whether partially or in full and the hedging strategies and instruments on which we rely may not achieve their intended purpose. Any failure in our hedging strategy or in the hedging instruments on which we rely could result in losses to us and have a material adverse effect on our business, financial condition and results of operations. In addition, our decision to not hedge our foreign exchange exposure originated by our investments in Brazil, Colombia and Mexico could negatively harm our financial condition and results of operations.

Financial instruments, including derivative instruments and securities, represented 97.2% of our total assets as of December 31, 2020. Any realized or unrealized future gains or losses from our investments or hedging strategies could have a significant impact on our income. These gains and losses, which we account for when we sell or assess the fair value of investments in financial instruments, can vary considerably from one period to another. If, for example, we enter into derivatives transactions to protect ourselves against decreases in interest rates and the real instead increases in value or interest rates instead increase, we may incur financial losses. We cannot forecast the amount of gains or losses in any future period, and the variations experienced from one period to another do not necessarily provide a meaningful forward-looking reference point. Gains or losses in our investment portfolio may create volatility in revenue levels, and we may not earn a return on our consolidated investment portfolio, or on a part of the portfolio in the future, and any losses on our securities and derivative financial instruments could materially and adversely affect our income and financial condition. In addition, any decrease in the value of our investment and derivatives portfolios may result in a decrease in our capital ratios, which could impair our ability to engage in lending activity at the levels we currently anticipate.

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Such derivative transactions also subject us to market, credit and operational risks, including basis risk (the risk of loss associated with variations in the spread between the asset yield and the funding or hedge cost) and credit or default risk (the risk of insolvency or other inability of the counterparty to a particular transaction to perform its obligations thereunder). Further, the execution and performance of these transactions depend on our ability to maintain adequate control and administration systems. Our ability to adequately monitor, analyze and report derivative transactions continues to depend, largely, on our information technology systems. These factors further increase the risks associated with these transactions.

Liquidity and funding risks are inherent in our business. Because our principal sources of funds are short-term deposits, a sudden shortage of funds would heighten our liquidity risk and increase our costs of funding.

Liquidity risk is the risk that we either do not have available sufficient financial resources to meet our obligations as they become due or can secure them only at excessive cost. This risk is inherent in our business and can be heightened by a number of factors, including over-reliance on a particular source of funding, changes in credit ratings or market-wide phenomena such as market dislocation. Constraints in the supply of liquidity, including in interbank lending, can materially and adversely affect the cost of funding our business, and extreme liquidity constraints may affect our current operations, our growth potential and our ability to fulfill regulatory liquidity requirements.

We currently rely primarily on retail deposits as our main source of funding. As of December 31, 2020, we had US$5.6 billion of retail deposits, 95% of which were payable on demand, while we had US$6.3 billion of cash and cash equivalents and securities, composed substantially of liquid government bonds. The ongoing availability of funding through retail deposits is sensitive to a variety of factors beyond our control, including general economic conditions, the confidence of retail depositors in the economy, in the financial services industry and in us, the availability and extent of deposit guarantees and competition for deposits between banks or with other products. Any of these factors could significantly increase the amount of retail deposit withdrawals that we experience in a short period of time, thereby reducing our ability to access retail deposit funding on economically appropriate and reasonable terms, or at all, in the future. This would have a material adverse effect on our results of operations, financial condition and prospects.

Increases in our costs of funding would also increase our liquidity risk. Our cost of obtaining funds is directly related to prevailing interest rates and to our credit spreads, with increases in these factors increasing our cost of funding. Credit spread variations are market driven and may be influenced by market perceptions of our creditworthiness. Changes to interest rates and our credit spreads occur continuously and may be unpredictable and highly volatile. Disruption and volatility in the global financial markets could have a material adverse effect on our ability to access capital and liquidity on financial terms acceptable to us, or at all. In the event of a sudden or unexpected shortage of funds in the banking system, we cannot guarantee that we will be able to maintain levels of funding without incurring high funding costs, a reduction in the term of funding instruments or the liquidation of certain assets, which would materially adversely affect our business. Further, if the supply of retail deposits decreases or ceases to become available, we may be forced to raise the rates we pay on deposits, with a view to attracting more customers, and if retail deposits become excessively expensive, we may be forced to sell assets, potentially at depressed prices. The persistence or worsening of these adverse market conditions or an increase in base interest rates could have a material adverse effect on our ability to access liquidity and could increase our cost of funding, which would adversely affect our results of operations and financial condition.

Our ability to manage our funding base may also be affected by changes in regulation, including the compulsory reserve requirements applicable to our operating subsidiaries in Brazil. For more information on Brazil’s compulsory reserve requirements, see “—Risks Relating to Regulatory Matters and Litigation—Increases in reserve, compulsory deposit, minimum capital and contributions to deposit insurance requirements may have a material adverse effect on us.”

Changes in market and economic conditions could adversely affect our loan portfolio and decrease the demand for our products and services.

The financial markets, and in turn the financial services industry, are affected by many factors, such as U.S. and foreign economic conditions and general trends in business and finance that are beyond our control, which could be adversely affected by changes in the equity or debt marketplaces, unanticipated changes in currency exchange rates, interest rates, inflation rates, the yield curve, financial crises, war, terrorism, natural disasters and other factors that

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are difficult to predict. A severe or prolonged downturn or periods of market turmoil in the U.S., Brazilian, Mexican, Colombian or international financial markets (or in other foreign markets in the jurisdictions in which we currently or may in the future operate) could materially and adversely affect the liquidity, credit ratings, businesses and financial conditions of our borrowers, which could in turn increase our non-performing loan ratios, impair our loan and other financial assets and result in decreased demand for borrowings in general. Specifically, we have credit exposure to borrowers which have entered or may shortly enter into insolvency or similar proceedings. We may experience material losses from this exposure. In addition, investments may lose value and our investment customers may choose to withdraw assets or transfer them to investments that they perceive to be more secure, which would adversely affect our income and liquidity positions. For more information on the effect of economic conditions on consumer behavior and demand for our products and services, see “—Our results of operations and operating metrics may fluctuate, and we have generated and may continue to generate losses, which may cause the market price of our Class A ordinary shares and BDRs to decline.” Any downturn in financial market could have a material adverse effect on our results of operations, financial condition or business.

We may not be able to generate sufficient cash to service our indebtedness and may be forced to take other actions to satisfy our obligations under the terms of our indebtedness, which may not be successful.

As of March 31, 2021, we had total indebtedness of US$526.5 million (comprising US$13.1 million in instruments eligible as capital, US$103.2 million in borrowings and financing, US$57.7 million in securitized borrowing, US$10.2 million in lease liabilities and US$342.4 million in senior preferred shares). Our ability to make scheduled payments on or to refinance our indebtedness depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flow from operating activities sufficient to permit us to pay the principal and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay acquisitions and capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. Our existing credit facilities contain restrictive covenants, including customary limitations on the incurrence of certain indebtedness and liens. Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under our credit facilities and any future financing agreements into which we may enter, which in turn could cause our outstanding indebtedness under our credit facilities and any future financing agreements that we may enter into under these terms to become immediately due and payable.

In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we would face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for more information. Any of these circumstances could adversely affect our results of operations, financial condition or business.

Our holding company structure makes us dependent on the operations of our subsidiaries.

As a holding company, our corporate purpose is to invest, as a partner or shareholder, in other companies, consortia or joint ventures in Brazil, Mexico and Colombia, where most of our operations are located, and outside of these jurisdictions. Accordingly, our material assets are our direct and indirect equity interests in our subsidiaries, and we are therefore dependent upon the results of operations of and, in turn, the payments, dividends and distributions from, our subsidiaries for funds to pay our operating and other expenses and to pay future cash dividends or distributions, if any, to holders of our Class A ordinary shares or BDRs. We may be required to pay taxes on distributions made by our operating subsidiaries to us under the local laws applicable to such subsidiaries. For example, the Brazilian federal government recently stated that it is considering repealing the existing income tax exemption on the distribution of dividends and imposing an assessment of income taxes on the distribution of dividends, and that applicable taxes on the payment of interest on shareholders’ equity may be increased in the

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future. Any imposition of or increases in the taxation on the distribution of dividends (or similar payments or distributions, such as interest on shareholders’ equity) may adversely affect us.

In addition, the payments, dividends and distributions from our subsidiaries to us for funds to pay future cash dividends or distributions, if any, to holders of our Class A ordinary shares or BDRs could be restricted under financing arrangements that we or our subsidiaries may enter into in the future, and such subsidiaries may be required to obtain the approval of lenders to make such payments to us. Furthermore, we may be adversely affected if the governmental authorities of the jurisdictions in which we operate impose legal restrictions on dividend distributions by our local subsidiaries, and exchange rate fluctuations will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries.

Specifically, in Brazil, on May 29, 2020, in response to the ongoing uncertainty relating to the economic effects of the COVID-19 pandemic, the Central Bank of Brazil issued CMN Resolution No. 4,820/2020, or “CMN Resolution No. 4,820.” CMN Resolution No. 4,820 prohibits financial institutions and other institutions authorized to operate by the Central Bank of Brazil, including Nu Financeira, Nu DTVM and NuInvest, to make dividend distributions in relation to the 2020 fiscal year beyond the minimum legal requirement or the minimum threshold established in such institutions’ organizational documents. Although this restriction applies only to the 2020 fiscal year, the Brazilian monetary authorities could expand the restriction to the following fiscal years depending on the impacts of the COVID-19 pandemic.

We rely on the Mastercard payment scheme to process our transactions. If we fail to comply with the applicable requirements of the Mastercard payment scheme, Mastercard could seek to fine us, suspend us or terminate our registration, which would have a material adverse effect on our business, financial condition and results of operations.

We rely on payment schemes to process our transactions, and a significant source of our revenue comes from processing transactions through the Mastercard payment scheme. We must pay a fee for this service, and from time to time, the payment schemes may increase the fees that they charge for each transaction using one of their cards, subject to certain limitations.

Payment networks establish their own rules and standards that allocate liabilities and responsibilities among the payment networks and their participants. These rules and standards, including the Payment Card Industry Data Security Standard, govern a variety of areas, including how consumers and customers may use their cards, the security features of cards, security standards for processing, data protection and information security and allocation of liability for certain acts or omissions, including liability in the event of a data breach. The payment schemes routinely update and modify their requirements; the payment card networks could adopt new operating rules or interpret or reinterpret existing rules that we or our processors might find difficult or even impossible to follow or costly to implement. These changes may be made for any number of reasons, including as a result of changes in the regulatory environment, to maintain or attract new participants or to serve the strategic initiatives of the networks, and may impose additional costs and expenses on or be disadvantageous to us. Such changes may impact our ongoing cost of doing business, and we may not, in every circumstance, be able to pass through such costs to our customers. For example, changes in the payment card network rules regarding chargebacks may affect our ability to dispute chargebacks and the amount of losses we incur from chargebacks. If we fail to make such changes or otherwise resolve the issue with the payment card networks, the networks could disqualify us from processing transactions if satisfactory controls are not maintained, which would have a material adverse effect on our business, financial condition and results of operations.

We are subject to audit by the payment networks to ensure compliance with applicable rules and standards, and may be directly liable to the payment card networks for rule violations. If we do not comply with the payment scheme requirements, the payment schemes could seek to fine us, suspend us or terminate our registrations that allow us to process transactions on their schemes, and we could lose our ability to make payments using virtual cards or any other payment form factor enabled by the network. If we are unable to recover amounts relating to fines from or pass through costs to our customers or other associated participants, we would experience a financial loss. The termination of our registration due to failure to comply with the applicable requirements of the Mastercard payment scheme, or any changes in the payment scheme rules that would impair our registration, could require us to stop using the Mastercard payment scheme to process our transactions, which would have a material adverse effect on our business, financial condition and results of operations.

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We may require additional capital in the future, which may not be available on acceptable terms or at all.

In the future, we may need to raise additional capital to fund our expansion (organically or through strategic acquisitions), to develop new or enhanced services or products or to respond to competitive pressures, or to comply with regulatory capital adequacy requirements discussed in “Regulatory Overview—Brazil—Other Rules—Corporate Capital and Limits of Exposure.” Such financing may not be available on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund our expansion, take advantage of acquisition opportunities, develop or enhance services or products or respond to competitive pressures, which would have a material adverse effect on our business, results of operations and financial condition. If we raise additional funds through the issuance of equity or convertible debt securities, our shareholders will experience dilution and the securities that we issue may have rights, preferences and privileges senior to those of our Class A ordinary shares, and the market price of our Class A ordinary shares and BDRs could decline. Any additional funds raised through debt financing will likely require our compliance with restrictive covenants that impose operating and financial restrictions on us, including restrictions on our ability to incur additional indebtedness, create liens, make acquisitions, dispose of assets and make restricted payments, among others. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness” In addition, such indebtedness may require us to maintain certain financial ratios. These restrictions may limit our ability to obtain future financings, to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities. A breach of any such covenant would likely result in a default under the applicable agreement, which, if not waived, could result in acceleration of the indebtedness outstanding.

The COVID-19 pandemic has materially impacted, and is expected to continue to materially impact, our business, key metrics and results of operations in volatile and unpredictable ways.

Occurrences of epidemics or pandemics, depending on their scale, may cause different degrees of disruption to the regional, state and local economies in which we offer our products and services. While the COVID-19 pandemic in Brazil, Mexico, Colombia and worldwide will likely continue to adversely impact national and global economies, the full extent of the impact of the pandemic on our business, key metrics and results of operations depends on future developments that are uncertain and unpredictable, including the duration, severity and spread of the pandemic, its impact on capital and financial markets and any new information that may emerge concerning the virus, vaccines or other efforts to control the virus.

As a result of the COVID-19 pandemic, we have transitioned to an almost fully remote work environment and we may continue to operate on a significantly remote and dispersed basis for the foreseeable future. This remote and dispersed work environment could have a negative impact on the execution of our business plans and operations. For example, if a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. Further, as the COVID-19 pandemic continues, we may experience disruptions if our employees or our third-party service providers’ employees become ill and are unable to perform their duties, and our operations, Internet or mobile networks, or the operations of one or more of our third-party service providers, is impacted. The increase in remote working may also result in customer privacy, IT security and fraud vulnerabilities, which, if exploited, could result in significant recovery costs and harm to our reputation. Transitioning to a fully or predominantly remote work environment and providing and maintaining the operational and infrastructure necessary to support a remote work environment also present significant challenges to maintaining our corporate culture, including employee engagement and productivity, both during the immediate pandemic crisis and beyond.

Further, the COVID-19 pandemic has caused substantial changes in consumer behavior, restrictions on business and individual activities and high unemployment rates, which have led to reduced economic activity. Extraordinary actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions throughout the world, such as travel bans, quarantines, “stay-at-home” orders, suspension of interest accrual and similar mandates for many individuals and businesses to substantially restrict daily activities, have caused and may continue to cause a decrease in consumer activity generally.

In addition, we experienced declining Purchase Volume during periods impacted by the COVID-19 pandemic when economic activity declined and when we implemented a more restrictive credit policy due to reduced consumer income and economic uncertainty, reducing purchase volume per customer, and consequently reducing

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Monthly ARPAC. Specifically, we saw decreases in the purchase volume of our card operations in the first half of 2020, a trend that has progressively reversed since the end of 2020. Moreover, during the beginning of the COVID-19 pandemic, we saw a temporary increase in our delinquency levels, in line with market trends, after which we calibrated our underwriting models, and by the end of 2020, our levels had improved relative to our own pre-COVID-19 delinquency levels. However, the COVID-19 pandemic may have a negative impact on our ability to accurately estimate consumers delinquency levels based on internal credit scoring systems. Extraordinary income-substitution policies undertaken by federal, state and local governmental authorities may have masked the true level of consumer income deterioration or behavior in the markets in which operate. As a result, the effectiveness of our consumer credit models may suffer in the future.

We have also seen significant and rapid shifts in the traditional models of banking and commerce as the pandemic has evolved. Although we believe our business has been positively impacted to some extent by several trends related to the COVID-19 pandemic, including the increased need or willingness of consumers to adopt virtual banking, we cannot predict whether these trends will continue if and when the pandemic begins to subside, restrictions ease, and the risk and barriers associated with in-person commerce decrease. As of the date of this prospectus, we have been and are currently able to deliver substantially all of our services remotely and therefore our operations have not been materially or negatively impacted by the COVID-19 pandemic. However, we cannot predict if, and to what extent, our business, results of operations, financial condition and liquidity will be impacted by the COVID-19 pandemic in the future, including regional or global outbreaks, or by national or international aftershocks of the pandemic once controlled, including a recession, slowdown of the economy or increase in unemployment levels. Further, if the COVID-19 pandemic adversely affects our business, results of operations, financial condition and liquidity in the future, many of the other risks described in this “Risk Factors” section may be heightened.

Risks Relating to Intellectual Property, Privacy and Cybersecurity

We collect, store, handle, transmit, use and otherwise process certain personal information and other customer data in our business. A significant risk associated with our operations is the secure transmission of confidential information over public networks. The perception of privacy concerns, whether or not valid, may harm our business and results of operations. We must ensure that all collection, use, storage, dissemination, transfer, disposal and other processing of data for which we are responsible comply with relevant data protection and privacy laws. The protection of our customer, employee and company data is critical to us. We rely on commercially available systems, software, tools and monitoring to provide secure processing, transmission and storage of confidential customer information, such as credit card and other personal information. Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors or other similar events. Any security breach, or any perceived failure involving the misappropriation, loss or other unauthorized disclosure of confidential information, as well as any failure or perceived failure to comply with laws, policies, legal obligations or industry standards regarding data privacy and protection, whether by us or our vendors, could damage our reputation, expose us to litigation risk and liability, subject us to negative publicity, disrupt our operations and harm our business. Our security measures may fail to prevent security breaches, which could harm our business, financial condition and results of operations.

Our business involves the collection, storage, transmission and other processing of customers’ personal data, including names, addresses, identification numbers, account numbers, account balances, loan positions and trading and investment portfolio information. We also have arrangements in place with certain third-party service providers that require us to share certain customer information. Our and such third parties’ ability to protect such personal data and customer information is dependent on our ability to prevent cybersecurity breaches and unauthorized access and disclosure.

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An increasing number of organizations, including large customers and businesses, other large technology companies, financial institutions and government institutions have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on portions of their websites, networks or infrastructure, or those of third parties who provide services to them. Information security risks for financial and technology companies such as ours in particular have significantly increased recently, in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties. For example, in 2020, we experienced a phishing attack that compromised two Nu employee corporate accounts and resulted in an unauthorized disclosure of an immaterial amount of confidential data (though it did not result in direct financial losses or harm our strategic plans or business operations or legal proceedings). Because of our position in the payments value chain, we believe that we are likely to continue to be a target of such threats and attacks. In addition, due to the size and complexity of our technology platform and services, the amount of personal data and other data that we store and the number of customers, employees and third-party providers with access to personal data and other data, we may be the target of a variety of intentional and inadvertent cybersecurity attacks and other security-related incidents and threats, which could result in a material adverse effect on our business, financial condition and results of operation.

The techniques used to obtain unauthorized, improper or illegal access to our systems, our data or our customers’ data, to disable or degrade service, or to sabotage systems are constantly evolving may be difficult to detect quickly and often are not recognized until launched against a target. Unauthorized parties may attempt to gain access to our systems or facilities through various means, including, among others, hacking into our systems or those of our customers, partners or vendors, attempting to fraudulently induce our employees, customers, partners, vendors or other users of our systems into disclosing usernames, passwords, payment card information or other sensitive information, which may in turn be used to access our information technology systems, or installing malicious software. Certain efforts may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect.

Although we have developed systems and processes that are designed to protect our networks, applications, accounts and the confidentiality, integrity and availability of data and customer data and our information technology systems and to prevent data loss and other security breaches, and expect to continue to expend significant additional resources to bolster these protections, these security measures cannot provide absolute security and there can be no assurance that our safety and security measures (and those of our third-party providers) will prevent damage to, or interruption or breach of, our information systems and operations. Our information technology and infrastructure may be vulnerable to cyberattacks or security breaches, and third parties may be able to access our customers’ personal or proprietary information and card data that are stored on or accessible through those systems. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing, ransomware, social engineering attacks, unauthorized access or misuse and denial-of-service attacks, sophisticated criminal networks as well as nation-state and nation-state supported actors now engage in attacks, including advanced persistent threat intrusions. Our security measures may also be breached due to human error, malfeasance, fraud or malice on the part of employees, accidental technological failures, system errors or vulnerabilities, or other irregularities. Further, as a consequence of the COVID-19 pandemic, nearly all of our employees are working remotely, which may cause heightened vulnerability to cyberattacks across our business and those of our service providers. In the event our or our third-party providers’ protection efforts are unsuccessful and our systems or solutions are compromised, we could suffer substantial harm.

Any actual or perceived cybersecurity attacks, security breaches, phishing attacks, ransomware attacks, computer malware, computer viruses, computer hacking attacks, unauthorized access, coding or configuration errors or similar incidents experienced by us or our third-party service providers could interrupt our operations, result in our systems or services being unavailable, result in the loss, compromise corruption or improper disclosure of data or personal data, subject us to regulatory or administrative investigations and orders, litigation, disputes, sanctions, indemnity obligations, damages for contract breach or penalties for violation of applicable laws or regulations, impair our ability to provide our solutions and meet our customers’ requirements, materially harm our reputation and brand, result in significant legal and financial exposure (including customer claims), lead to loss of customer confidence in, or decreased use of, our products and services, and adversely affect our business, financial condition and results of operations. In addition, any breaches of network or data security at our customers, partners or third-party service providers (including data center and cloud computing providers) could have similar negative effects. We could be forced to expend significant financial and operational resources in response to a security breach,

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including repairing system damage, increasing security protection costs by deploying additional personnel and modifying or enhancing our protection technologies, investigating and remediating any information security vulnerabilities and defending against and resolving legal and regulatory claims, all of which could divert resources and the attention of our management and key personnel and materially and adversely affect our business, financial condition and results of operations.

Specifically, because we leverage third-party providers, including cloud, software, data center and other critical technology vendors to deliver our solutions to our customers, we rely heavily on the data security technology practices and policies adopted by these third-party providers. Such third-party providers have access to personal data and other data about our customers and employees, and some of these providers in turn subcontract with other third-party providers. Our ability to monitor our third-party providers’ data security is limited. A vulnerability in a third-party provider’s software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in the compromise of the confidentiality, integrity or availability of our systems or the data housed in our third-party solutions.

Many jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data or information technology systems. Security compromises experienced by others in our industry, our customers, our third-party service providers or us may lead to public disclosures and widespread negative publicity. Any security compromise in our industry, whether actual or perceived, could erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to elect not to renew or expand their use of our platform, services and products or subject us to third-party lawsuits, regulatory fines or other actions or liabilities, which could materially and adversely affect our business, financial condition and results of operations

Likewise, agreements with certain service providers may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and alleviate problems caused by the actual or perceived security breach. Further, a data security compromise or operational disruption impacting us or one of our critical vendors, or system unavailability or damage due to other circumstances, may give rise to a customer’s right to terminate its contract with us. In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent customers from potentially terminating their contracts with us. Furthermore, although our customer contracts typically include limitations on our potential liability, we cannot guarantee that such limitations of liability would be adequate.

Additionally, although we maintain insurance policies covering cyber-attacks, such policies may not be adequate to reimburse us for losses caused by security breaches, and we may not be able to collect fully, if at all, under these policies. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases in or the imposition of large deductible or co-insurance requirements, could adversely affect our business, financial condition and results of operations.

For information on the data protection and privacy laws and regulations to which we are subject and the risks associated therewith, see “Risks Relating to Regulatory Matters and Litigation—We are subject to costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to data privacy, security and protection. Developments in these and other laws and regulations could harm our business, financial condition or results of operations.”

Claims by others that we infringe their proprietary technology or other rights could have a material and adverse effect on our business, financial condition and results of operations.

We may be subject to costly litigation in the event that third parties assert claims that our services or technology infringe, misappropriate or otherwise violate their intellectual property or proprietary rights. Third parties may have, or may eventually be issued, patents that could be infringed, misappropriated or otherwise violated by our services or technology, and any of these third parties could make a claim of infringement against us. As we face increasing competition and gain an increasingly high profile, the possibility of intellectual property rights claims against us grows. We may also be subject to claims by third parties for breach of copyright, trademark, license usage or other intellectual property rights. Any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit and regardless of the outcome, could cause us to incur substantial

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costs defending against the claim, distract our management from our business, require us to redesign or cease use of such intellectual property, pay substantial amounts to satisfy judgments or settle claims or lawsuits, pay substantial royalty or licensing fees, or satisfy indemnification obligations that we have with certain parties with whom we have commercial relationships. The outcome of any allegation is often uncertain. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit and regardless of the outcome, may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like ours. Even if we believe that such claims are without merit, defending against such claims is time-consuming and expensive and could result in the diversion of the time and attention of our management and employees.

Claims of intellectual property infringement, misappropriation or other violation also might require us to redesign around such violated services, which may be expensive, time-consuming or infeasible, enter into costly settlement or license agreements, pay costly damage awards (including treble damages and attorneys’ fees if we are found to have willfully infringed a patent or other intellectual property right), change our brands or face a temporary or permanent injunction prohibiting us from commercializing, using, marketing or selling the violating technology, products or services or using certain of our brands. We may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.

Claims that we have misappropriated the confidential information or trade secrets of third parties could similarly harm our business. If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement, misappropriation or violation claims against us, such payments, costs or actions could have a material adverse effect on our competitive position, business, financial condition and results of operations.

Additionally, in certain of our agreements with customers and other third parties, we agree to indemnify them for losses related to, among other things, claims by third parties of intellectual property infringement, misappropriation or other violation. From time to time, customers or other third parties have required, and may in the future require, us to indemnify them for such infringement, misappropriation or violation, breach of confidentiality or violation of applicable law, among other things. Although we normally seek to contractually limit our liability with respect to such obligations, some of these indemnity agreements may provide for uncapped liability and some indemnity provisions survive termination or expiration of the applicable agreement. Any legal claims from customers or other third parties could result in substantial liabilities and reputational harm, and could have adverse effects on our relationship with such customers and other third parties. Even if we have an agreement for indemnification against such costs, the indemnifying party, if any, may be unable to uphold its contractual obligations. Any of the foregoing could negatively impact our business, revenue and earnings.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand.

We believe the protection of our intellectual property, including our trademarks, patents, copyrights, domain names, trade dress and trade secrets, is critical to our success. We rely on, and expect to continue to rely on, a combination of contractual rights in various agreements with our employees, independent contractors, consultants and third parties with whom we have relationships, as well as trademarks and trade secrets in the United States, Brazil, Argentina, Mexico, Colombia and elsewhere internationally to establish and protect our intellectual property and proprietary rights, including technology. Third parties may challenge, invalidate, circumvent, infringe, misappropriate or otherwise violate our intellectual property and other proprietary rights, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm. Others, including our competitors, may independently develop similar technology, duplicate our services or design around our intellectual property, and in such cases, we could not assert our intellectual property rights against such parties. Despite our efforts to protect our proprietary rights, there can be no assurance

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that our intellectual property rights will be sufficient to protect against others offering products or services that are substantially similar to ours and compete with our business or to prevent unauthorized parties from copying aspects of our technology. For example, it is possible that third parties, including our competitors, may obtain patents that overlap or compete with our technology. If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or otherwise preclude the use of our technology.

In addition to registered intellectual property rights such as trademark registrations, we rely on nonregistered proprietary information and technology, such as trade secrets, confidential information, know-how and technical information. In order to protect our proprietary information and technology, we rely in part on nondisclosure and confidentiality agreements with parties who have access to them, including our employees, independent contractors, corporate collaborators, advisors and other third parties, which place restrictions on the use and disclosure of this intellectual property. We also enter into confidentiality and invention assignment agreements with our employees and consultants. We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary information or otherwise developed intellectual property for us, including our technology and processes. Individuals not subject to invention assignment agreements may make adverse ownership claims to our current and future intellectual property. Additionally, these agreements may be insufficient or breached, or otherwise fail to prevent unauthorized use or disclosure of our confidential information, intellectual property or technology, and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property or technology. As a result, our intellectual property, including trade secrets, may be disclosed or become known to our competitors, which could cause us to lose any competitive advantage resulting from this intellectual property. Additionally, to the extent that our employees, independent contractors or other third parties with whom we do business use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Further, we may be unable to obtain trademark protection for our technologies and brands, and our existing trademark registrations and applications, and any trademarks that may be used in the future, may not provide us with competitive advantages or distinguish our products and services from those of our competitors. In addition, our trademarks may be contested, circumvented or found to be unenforceable, weak or invalid, and we may not be able to prevent third parties from infringing or otherwise violating them.

We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which is expensive, could cause a diversion of resources and may not prove successful. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. An adverse outcome in such litigation or proceedings may expose us to a loss of our competitive position, expose us to significant liabilities or require us to seek licenses that may not be available on commercially acceptable terms, if at all. Further, we will not be able to protect our intellectual property rights if we are unable to enforce our rights, and effective intellectual property protection may not be available in every country in which we offer our products and services. The laws of certain countries where we do business or may do business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. In addition, any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our trade secret and intellectual property rights. Failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our competitive position and materially and adversely affect our business, results of operations and results of operations.

Also, because of the rapid pace of technological change in our industry, aspects of our business and our services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all. See “—Our business and platform depend in part on intellectual property and proprietary rights and technology licensed from or otherwise made available to us by third parties. If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.” The loss of intellectual property protection, the inability to obtain third-party intellectual property or delay or refusal by relevant regulatory authorities to approve pending intellectual property registration applications could harm our business and ability to compete.

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Our use of third-party open source software could negatively affect our ability to offer and sell our solutions and subject us to possible litigation.

Our solutions incorporate and are dependent to some extent on the use and development of third-party open source software and we intend to continue our use and development of open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses and is typically freely accessible, usable and modifiable. Pursuant to such open source licenses, we may be subject to certain conditions, including requirements that we offer our proprietary software that incorporates open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of the particular open source license. If an author or other third party that uses or distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the use or sale of our solutions that contained or are dependent upon the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products and services. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, any open source software or derivative works that we have developed using such software, which could include proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, which would put us at a competitive disadvantage, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer such source code in a manner that avoids infringement. This reengineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully. Litigation could be costly for us to defend, have a negative effect on our financial condition and results of operations or require us to devote additional research and development resources to change the source code underlying our platform, products and services. The terms of many open source licenses to which we are subject have not been interpreted by courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide, or distribute the products or services related to, the open source software subject to those licenses. As there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses, the potential impact of these terms on our business is uncertain and may result in unanticipated obligations regarding our solutions and technologies.

In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code, controls on the origin or development of the software, or remedies against the licensors. Many of the risks associated with usage of open source software cannot be eliminated and could adversely affect our business. Although we seek to comply with our obligations under the various applicable licenses for open source software, it is possible that we may not be aware of all instances where open source software has been incorporated into our proprietary software or used in connection with our solutions or our corresponding obligations under open source licenses. We do not have open source software usage policies or monitoring procedures in place. We rely on multiple software programmers to design our proprietary software and we cannot be certain that our programmers have not incorporated open source software into our proprietary software that we intend to maintain as confidential or that they will not do so in the future. To the extent that we are required to disclose the source code of certain of our proprietary software developments to third parties, including our competitors, in order to comply with applicable open source license terms, such disclosure could harm our intellectual property position, competitive advantage, financial condition and results of operations. In addition, to the extent that we have failed to comply with our obligations under particular licenses for open source software, we may lose the right to continue to use and exploit such open source software in connection with our operations and solutions, which could disrupt and adversely affect our business.

Our business and platform depend in part on intellectual property and proprietary rights and technology licensed from or otherwise made available to us by third parties. If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.

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technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.

Our business and our platform rely in part on certain intellectual property, including technologies, data, content and software developed and licensed to us by third parties, and in the future we may enter into additional agreements that provide us with licenses to valuable intellectual property or technology. If we fail to comply with any of the obligations under our license agreements, we may be required to pay damages and the licensor may have the right to terminate the license. Termination by the licensor would cause us to lose valuable rights, and could prevent us from selling our products and services, or inhibit our ability to commercialize future products and services. Our business would suffer if any current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensors fail to enforce licensed patents against infringing third parties, if the licensed intellectual property rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms.

In addition, our rights to certain technologies are licensed to us on a non-exclusive basis. The owners of these non-exclusively licensed technologies are therefore free to license them to third parties, including our competitors, on terms that may be superior to those offered to us, which would place us at a competitive disadvantage. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, the agreements under which we license intellectual property or technology from third parties are generally complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement.

Further, the licensed components may become obsolete, defective or incompatible with future versions of our services, relationships with the third-party licensors or technology providers may deteriorate, or our agreements with the third-party licensors or technology providers may expire or be terminated. Additionally, some of these licenses or other grants of rights may not be available to us in the future on terms that are acceptable, or at all, or that allow our platform, products and services to remain competitive. Our inability to obtain licenses or rights on favorable terms could have a material and adverse effect on our business and results of operations. Furthermore, incorporating intellectual property or proprietary rights licensed from or otherwise made available to us by third parties on a non-exclusive basis in our products or services could limit our ability to protect the intellectual property and proprietary rights in our services and our ability to restrict third parties from developing, selling or otherwise providing similar or competitive technology using the same third-party intellectual property or proprietary rights.

We seek to have all the necessary licenses and other grants of rights from third parties to use technology and software that we do not own. However, the licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater development or commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our products and services. Such royalties are a component of the cost of our products or services and may affect the margins on our products and services. Further, a third party could allege that we are infringing its rights. Our failure to obtain necessary licenses or other rights on acceptable terms, or litigation or claims arising out of intellectual property matters, may harm or restrict our business. In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. Any such litigation or the failure to obtain any necessary licenses or other rights could adversely impact our business, financial position and results of operations.

Risks Relating to Regulatory Matters and Litigation

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costly, expose us to substantial liability and force us to change our business practices, any of which could harm our business and results of operations.

Because we conduct the majority of our operations in Brazil, we are predominately subject to regulation under Brazilian law and by Brazilian authorities. The Brazilian financial and payment markets and Brazilian financial and payment institutions are subject to extensive regulatory control by the Brazilian government, principally by the Central Bank of Brazil, the Brazilian Securities Commission (Comissão de Valores Mobiliários, or the “CVM”), the Brazilian Monetary Council (Conselho Monetário Nacional, or the “CMN”), and the Brazilian stock exchange (B3 S.A. – Brasil, Bolsa, Balcão, or the “B3”), which, in each case, materially affects our business.

As a payment institution in Brazil, our business is subject to Brazilian laws and regulations relating to electronic payments in Brazil, including Federal Law No. 12,865/13 and related rules and regulations issued by the Central Bank of Brazil and CMN. As a financial services institution in Brazil, our business is subject to Brazilian laws and regulations relating to financial services, including Federal Law No. 4,595/64, Federal Law No. 6,385/76 and related rules and regulations issued by the Central Bank of Brazil and the CMN, among others, and once we become a public company in Brazil, the CVM and the B3. In addition, our insurance broker activity is subject to various laws and regulations in Brazil, such as Federal Law No. 4,595/64, Decree Law No. 73/66 and certain other rules and regulations issued by the National Private Insurance Council (Conselho Nacional de Seguros Privados, or the “CNSP”) and the Brazilian Superintendence of Private Insurance (Superintendência de Seguros Privados, or the “SUSEP”), among others.

The laws, rules, and regulations that govern our business include those relating to deposit-taking, cross-border and domestic money transmission, foreign exchange, payments services (such as payment processing and settlement services), consumer financial protection, tax, anti-money laundering and terrorist financing and rules relating to unclaimed property. Specifically, we are subject to anti-money laundering and terrorist financing laws and regulations in multiple jurisdictions that prohibit, among other things, involvement in transferring the proceeds of criminal or terrorist activities. We could be subject to liability and forced to change our business practices if we were found to be subject to, or in violation of, any laws or regulations impacting our ability to maintain a banking account in the countries where we operate, or if existing or new legislation or regulations applicable to financial institutions in the countries where we maintain a banking account were to result in banks in those countries being unwilling or unable to establish and maintain banking accounts for us. As regulated payment and financial institutions in Brazil, certain of our operating subsidiaries are subject to rules and regulations relating to minimum equity capital, minimum net equity and other capital requirements, compulsory deposits and contributions, internal controls, anti-money laundering, know your customer obligations, sanctions, ombudsman and customer service, internal auditing, cybersecurity and bank secrecy, among others. See “Regulatory Overview” for a detailed description of the regulatory requirements applicable to us and our operating subsidiaries. In addition, as our business continues to develop and expand, we may become subject to additional rules and regulations, which may limit or change how we conduct our business.

These laws, rules and regulations are enforced by multiple authorities and governing bodies in Brazil, including the Central Bank of Brazil, the CVM and the CMN. In their supervisory roles, the Central Bank of Brazil, the CVM and the CMN seek to maintain the safety and soundness of financial and payment institutions with the aim of strengthening the protection of customers and the financial system. Their continuing supervision of financial and payment institutions is conducted through a variety of regulatory tools, including the collection of information by way of prudential returns, reports obtained from skilled persons, visits to firms and regular meetings with management to discuss issues such as performance, risk management and strategy. As a result, we face increased supervisory scrutiny (resulting in increasing internal compliance costs and supervision fees), and in the event of a breach of our regulatory obligations we are likely to face more stringent scrutiny and potentially significant fines.

Changes in regulations in Brazil and international markets in which we operate may expose us to increased compliance costs and limit our ability to pursue certain business opportunities or provide certain products and services. The regulation governing Brazilian payment and financial institutions is continuously evolving, including as a result of political, economic and social events, and the Central Bank of Brazil has reacted actively and extensively to developments in our industry. Specifically, Brazilian regulators frequently update prudential standards in accordance with the recommendations of the Basel Committee on Banking Supervision, in particular with respect to capital and liquidity, which could impose additional significant regulatory burdens on us, including additional and material capital requirements applicable to certain of our subsidiaries’ activities as payment

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institutions. For instance, Public Consultation No. 78 issued by the Central Bank of Brazil in December 2020 proposes a new set of rules aiming to harmonize the capital and prudential requirements applicable across payment services, such as the ones we provide through Nu Pagamentos. Our operations could also be adversely affected by changes with respect to restrictions on remittances abroad and other exchange controls as well as by interpretations of the law by courts and agencies in a manner that differs from our legal advisors’ opinions. There can be no assurance that future changes in regulations or in their interpretation or application will not have a material adverse effect on us.

The measures of the Central Bank of Brazil and the amendment of existing laws and regulations, or the adoption of new laws or regulations, could adversely affect our ability to provide loans, make investments or render certain financial and payment services. No assurance can be given generally that laws or regulations will be adopted, enforced or interpreted in a manner that will not have a material adverse effect on our business and results of operations. As some of the Brazilian banking laws and regulations have been recently issued or become effective, the manner in which those laws and related regulations are applied to the operations of financial and payment institutions, including us, is still evolving. Moreover, to the extent that these recently adopted regulations are implemented inconsistently in Brazil, we may face higher compliance costs. Furthermore, regulatory authorities have substantial discretion in how to regulate financial and payment institutions, and this discretion, and the regulatory mechanisms available to the regulators, have been increasing during recent years. Regulation may be imposed on an ad hoc basis by governments and regulators in response to a crisis (such as caps on interchange fees or interest rates, which could negatively affect our business, financial condition and results of operations given the importance of consumer credit products to our revenue), and these ad hoc regulations may especially affect financial institutions that may be deemed to be systemically important.

Although we have a compliance program focused on applicable laws, rules and regulations and are continually investing in this program, we may nonetheless be subject to fines or other penalties in one or more jurisdictions levied by federal, state or local regulators, as well as those levied by foreign regulators. In addition to fines, penalties for failing to comply with applicable rules and regulations could include significant criminal and civil lawsuits, disgorgement of profits, forfeiture of significant assets, loss of required licenses or approvals or other enforcement actions, including insolvency proceedings instituted by the Central Bank of Brazil. Any disciplinary or punitive action by our regulators or failure to obtain required operating authorizations could seriously harm our business and results of operations. We could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny. In addition, any perceived or actual failure to comply with applicable laws, rules and regulations could have a significant impact on our reputation and could cause us to lose existing customers, prevent us from obtaining new customers, require us to expend significant funds to remedy problems caused by non-compliance and to avert further non-compliance.

We also have operations outside of Brazil, including in Mexico and Colombia, along with information technology and business support operations in Argentina, Germany and the United States. In particular, in Mexico, our products are offered by both a financial institution (subject to the Popular Savings and Credit Law) and a commercial entity. Similar to financial entities in Brazil, financial entities in Mexico are subject to extensive regulation and the oversight of the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria de Valores, or the “CNBV”). Mexican authorities have been reviewing the regulations applicable to financial entities (and enacted the Fintech Law in 2018) and closely supervise financial technology companies. Changes to these laws and other applicable laws and regulations (for instance, regarding customer onboarding) have been discussed by the Mexican regulators, and could materially affect our operations in Mexico. In Colombia, our credit card product is offered by a commercial entity that is subject to extensive regulation, including those governing consumer protection (namely Law No. 1,480 of 2011, Decree No. 1,074 of 2015 and the Sole Circular of the Industry and Trade Superintendence) and data protection (Law No. 1,581 of 2012). In addition, interest rates in Colombia are capped, as provided in the Colombian Commercial and Criminal Codes. Our activities in Colombia are subject to the supervision of the Industry and Trade Superintendence with regards to consumer relations, data protection and antitrust. Furthermore, the Colombian Financial Regulatory Unit, or the “URF,” has proposed various changes to financial regulations that may be implemented in the future and affect our Colombian operations. Changes in these and other applicable laws or regulations in the countries in which we operate, or the adoption of new laws and related regulations, may require us to modify our business practices and may have an adverse effect on us.

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Given the volume, granularity, frequency and scale of regulatory and other reporting requirements, we must maintain a clear data strategy to enable consistent data aggregation, reporting and management. Inadequate management information systems or processes, including those relating to risk data aggregation and risk reporting, could lead to a failure to meet regulatory reporting requirements or other internal or external information demands, and we may face supervisory measures as a result.

In recent years, the Central Bank of Brazil issued several regulations related to the Brazilian payments market, aiming to increase the use of electronic payments, increase competitiveness in the sector, strengthen governance and risk management practices in the industry, encourage the development of new solutions and the differentiation of products to consumers and promote the increased use of electronic payment means. Such measures include the following recently enacted Central Bank of Brazil regulations: (i) Circular of the Central Bank of Brazil No. 3,887/2018, which establishes that interchange fees on debit cards will be subject to a cap of up to 0.8% on debit transactions, and that debit card issuers must maintain a maximum average interchange fee of 0.5%; (ii) Resolution of the Central Bank of Brazil No. 1/2020, which created the instant payment ecosystem; and (iii) Joint Resolution No. 1/2020, which governs the Open Financial System (Open Banking) initiative in Brazil.

In addition to such recently enacted regulations, the Brazilian Congress, Central Bank of Brazil and the broader payments industry are discussing legislative and regulatory initiatives that would modify the regulatory framework of the Brazilian payments and financial industries. For instance, the Brazilian Congress is discussing initiatives regarding the payment cycle in place in the Brazilian payments market. The Central Bank of Brazil has issued a letter in response to a report issued by the Brazilian Congress regarding the payment cycle currently in place in the Brazilian payments market, which presents a technical study of the impact of changes to the Brazilian payment cycle and confirms the Central Bank of Brazil’s decision to promote a gradual and planned shortening of the existing payment cycles. Should these discussions lead the Central Bank of Brazil, as the competent authority over the market, to implement regulatory initiatives to reduce existing payment cycles, this could adversely affect our business, revenue and financial condition. In addition, the Brazilian Congress is considering enacting new legislation that, if signed into law as currently drafted, would limit interest rates, particularly for credit cards facilities (rotativo do cartão) and overdrafts facilities (cheque especial) – the latter, with limits that are more restrictive than those recently imposed by the Central Bank of Brazil.

These discussions are in various phases of development, whether as part of legislative, regulatory or private initiatives in the industry, and the overall impact of any such reform proposals is difficult to estimate. Any such changes in laws, regulations or market practices have the potential to alter the type or volume of the card-based transactions we process and our payment services and could adversely affect our business, results of operations and financial condition.

We are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations and may be subject to sanctions.

We operate in jurisdictions that have a high risk for corruption and we are subject to various anti-corruption, anti-bribery and anti-money laundering laws and regulations, as well as those relating to sanctions, including the Brazilian Federal Law No. 12,846/2013, or the “Clean Company Act,” the Brazilian Federal Law No. 9,613/1998, or the “Brazilian Anti-Money Laundering Law,” the Brazilian Federal Law No. 8,429/1992, or the “Brazilian Public Improbity Law,” the Brazilian Federal Law No. 14,133/2021, and the United States Foreign Corrupt Practices Act of 1977, as amended, or the “FCPA,” among others. Each of the Clean Company Act, the Brazilian Anti-Money Laundering Act, the Brazilian Public Improbity Law and the FCPA impose liability against companies who engage in bribery of government officials, either directly or through intermediaries.

Anti-money laundering, anti-bribery, anti-corruption and sanctions laws and regulations to which we are subject require us, among other things, to conduct full customer due diligence (including sanctions and politically exposed person screening) and keep our customer, account and transaction information up to date. We are also required to report suspicious transactions and activity to appropriate law enforcement following full investigation. We have implemented financial crime policies and procedures detailing what is required from those responsible. However,

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we rely heavily on our employees to assist us by spotting such illegal and improper activities and reporting them, and our employees have varying degrees of experience in recognizing criminal tactics and understanding the level of sophistication of criminal organizations. If we decide to instead outsource any of our customer due diligence, customer screening or anti-financial crime operations, we would remain responsible and accountable for full compliance and any breaches. In addition, we rely upon our relevant counterparties to a large degree to maintain and appropriately apply their own appropriate compliance measures, procedures and internal policies. If we are unable to apply the necessary scrutiny and oversight of employees, third parties to whom we outsource certain tasks and processes or counterparties, we increase the risk of regulatory breach.

Financial crime – and the surrounding regulatory landscape – is continually evolving. Our ability to comply with changing applicable legal requirements depends on our ability to improve detection and reporting capabilities and reduce variation in control processes and oversight accountability, which requires proactive and adaptable responses from us and ongoing changes to systems and operational activities. While we maintain policies and procedures aimed at detecting and preventing the use of our platform for money laundering and other financial crime-related activities, emerging technologies, such as cryptocurrencies and blockchain, could limit our ability to track the movement of funds and therefore present a risk to our company. Even known threats can never be fully eliminated, and there will be instances where our platform may be used by other parties to engage in money laundering and other illegal or improper activities. Further, compliance with these laws and regulations requires sophisticated automated systems, which may fail.

Regulators may increase enforcement of or modify our obligations, which may require us to make adjustments to our compliance program, including the procedures we use to verify the identity of our customers and to monitor our transactions. Specifically, regulators regularly reexamine the transaction volume thresholds that we must obtain and any change in such thresholds could result in increased compliance costs. For example, the Central Bank of Brazil enacted new regulations, Circular No. 3,978, which became effective on October 1, 2020 and provides new guidelines with a risk-based approach for anti-money laundering and terrorist financing policies, procedures and controls. Under these guidelines, a regulated institution has the discretion to determine which procedures it will adopt for each customer, based on the internal risk assessment concerning the committing of crimes relating to money laundering and terrorism financing latent in the regulated entity’s business. We may not be able to comply, in a timely manner or at all, with new regulations, or obtain appropriate exemptions from regulatory authorities, and any new requirements or changes to existing requirements could impose significant costs, result in delays to planned product improvements, make it more difficult for new customers to join our platform and reduce the attractiveness of our products and services.

While we have developed and implemented policies and procedures designed to ensure compliance by us and our personnel with applicable anti-corruption, anti-bribery, anti-money laundering and sanctions laws and regulations, such policies and procedures may not be effective in all instances to prevent violations, either directly or through intermediaries. Violations of – or even accusations of or associations with violations of – anti-corruption, anti-bribery, anti-money laundering or sanctions laws and regulations could result in criminal liability, administrative and civil lawsuits, significant fines and penalties (including being added to “black lists” that would prohibit certain parties from engaging in transactions with us), forfeiture of significant assets and reputational harm. If we are unable to fully comply with applicable laws, regulations and expectations, our regulators and relevant law enforcement agencies have the ability and authority to require a complete review of our business systems, day-to-day supervision by external consultants and ultimately the revocation of licenses necessary to conduct our business. And the foregoing could have a material adverse effect on our operating results, financial condition and prospects.

Misconduct of our directors, officers, employees, consultants or third-party service providers could harm us by impairing our ability to attract and retain clients and subjecting us to legal liability and reputational harm.

Our directors, officers, employees, consultants and third-party service providers could engage in misconduct that adversely affects our business. We are subject to a number of obligations and standards arising from our business and the violation of these obligations and standards by any of our directors, officers, employees, consultants or third-party service providers could adversely affect our clients and us. If our directors, officers, employees, consultants or third-party service providers were to improperly use or disclose confidential information, we could suffer serious harm to our reputation, financial condition and or business relationships. Detecting or deterring employee misconduct is not always possible, and the precautions we take to detect and prevent this activity

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may not be effective in all cases. If one of our employees or consultants were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected.

In recent years, regulatory authorities across various jurisdictions, such as Brazil and the United States have increasingly focused on enhancing and enforcing anti-bribery laws, such as the Clean Company Act and the FCPA. While we have developed and implemented policies and procedures designed to ensure compliance by us and our personnel with such laws, such policies and procedures may not be effective in all instances. Any determination that we have violated the Clean Company Act, the FCPA, or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties or material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business, financial condition, results of operations or the market value of our Class A ordinary shares or BDRs.

We are subject to costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to data privacy, security and protection. Developments in these and other laws and regulations could harm our business, financial condition or results of operations.

We operate in a complex regulatory and legal environment that exposes us to compliance and litigation risks that could materially affect our business, financial condition or results of operations. These laws may change, sometimes significantly, as a result of political, economic or social events. In addition to the laws and regulations governing our status and operation as a financial and a payment institution (discussed in “—We are subject to extensive regulation and regulatory and governmental oversight as a digital banking platform and as a payment institution. Compliance with or violation of present or future regulations could be costly, expose us to substantial liability and force us to change our business practices, any of which could harm our business and results of operations”), some of the federal, state or local laws and regulations that affect us include those relating to consumer products, product liability or consumer protection; those relating to the manner in which we advertise, market or sell products; labor and employment laws, including wage and hour laws; tax laws or interpretations thereof; bank secrecy laws; data protection and privacy laws and regulations; and securities and exchange laws and regulations. See “Regulatory Overview” for more information. We face significant compliance costs and risk of non-compliance with respect to these existing laws and regulations, which costs and risks could be heightened by changes and developments with respect to such laws and regulations. There can be no guarantee that we will be able to adapt our business, or have sufficient financial resources, to comply with any new regulations, or that we will be able to successfully compete in the context of a shifting regulatory environment.

In particular, data protection and privacy laws are developing rapidly to take into account the changes in cultural and consumer attitudes towards the protection of personal data. In operating our business and providing services and solutions to customers, we collect, use, store, transmit and otherwise process sensitive employee and customer data, including personal data, in and across multiple jurisdictions. We leverage systems and applications that are spread all over the world, requiring us to regularly move data across national borders. As a result, we are subject to a variety of laws and regulations in Brazil, Mexico, Colombia, the EU and around the world, as well as contractual obligations, regarding data privacy, security and protection. In many cases, these laws and regulations apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries and other parties with which we have commercial relationships.

Personal privacy, information security, and data protection are significant issues globally. The regulatory framework governing the collection, processing, storage, use and sharing of certain information, particularly financial and other personal data, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations. The occurrence of unanticipated events and development of evolving technologies often rapidly drives the adoption of legislation or regulation affecting the use, collection or other processing of data and manner in which we conduct our business. Although we endeavor to comply with our policies and documentation, we may at times fail to do so or be alleged to have failed to do so. Any failure or perceived failure by us to comply with our privacy policies or any applicable privacy, security or data protection, information security or consumer-protection related laws, regulations, orders or industry standards in one or more jurisdictions could expose us to costly litigation, significant awards, fines or judgments, civil and criminal penalties or negative publicity, and could materially and adversely affect our business, financial condition and results of operations. The publication of our privacy policy and other documentation that provide promises and assurances about privacy and security can subject us to potential state and federal action if they are found to be deceptive, unfair or misrepresentative of our actual

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practices, which could, individually or in the aggregate, materially and adversely affect our business, financial condition and results of operations.

In particular, on August 14, 2018, the President of Brazil approved Law No. 13,709 the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados, or the “LGPD”), a comprehensive personal data protection law establishing general principles and obligations that apply across multiple economic sectors and contractual relationships. The LGPD establishes detailed rules for the collection, use, processing and storage of personal data (including personal data of customers, suppliers and employees), and affects all economic sectors, including the relationship between customers and suppliers of goods and services, employees and employers and other relationships in which personal data is collected, whether in a digital or physical environment. Specifically, the LGPD establishes, among other things, personal data owners’ rights, the legal basis for personal data protection, requirements for obtaining consent from data owners, obligations and requirements related to security incidents, data leaks and data transfers, as well as the creation of the ANPD, for the purposes of monitoring, implementing and supervising compliance with the LGPD in Brazil. The obligations established by the LGPD became effective in September 2020. In the event of non-compliance with the LGPD, we may be subject to administrative penalties, which will be applicable as of August 2021, including (1) warnings, with the impositions of a deadline for the adoption of corrective measures; (2) a one-time fine of up to 2% (subject to an upper limit of R$50,000,000) of our gross sales; (3) a daily fine (subject to an upper limit of R$50,000,000); (4) public disclosure of the violation; (5) the restriction of access to the personal data to which the violation relates, until corrective measures are implemented; (6) deletion of the personal data to which the violation relates; (7) partial suspension of the databases to which the violation relates for up to 12 months, until corrective measures are implemented; (8) suspension of the personal data processing activities to which the violation relates for up to 12 months; and (9) partial or full prohibition on personal data processing activities. Moreover, we may be liable for property, moral, individual or collective damages caused by us, including by third-party providers that process personal data for us, and jointly liable for property, moral, individual or collective damages caused by our subsidiaries, due to non-compliance with the obligations established by the LGPD. We cannot guarantee that our LGPD compliance efforts will be deemed appropriate or sufficient by regulatory authorities or by courts. Moreover, as the LGPD requires further regulation from the ANPD regarding several aspects of the law, which are yet unknown, we may have difficulty adapting our systems and processes to the new legislation due to the legislation’s complexity. The changes have impacted, and could further adversely impact, our business by increasing our operational and compliance costs.

Further, Resolution No. 85 of the Central Bank of Brazil and CMN Resolution No. 4,893 establish requirements for data processing, storage and cloud computing services, respectively, by payment and financial institutions authorized to operate by the Central Bank of Brazil and determine the mandatory implementation of a cybersecurity policy. Payment and financial institutions, including certain of our operating subsidiaries, are required to draw up internal cybersecurity policies, to appoint an officer to be responsible for implementing and overseeing cybersecurity policies, to adopt procedures and controls to prevent and respond to cybersecurity incidents and to include specific mandatory clauses in contracts regarding data processing, storage and cloud computing services. By virtue of the Supplementary Law No. 105 of January 10, 2001, we are also subject to strict secrecy rules on transactions, and are required to preserve the confidential nature of assets and liabilities transactions and of the services provided to our customers. Any additional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could seriously harm our business, financial condition or results of operations.

Internationally, many jurisdictions have established their own data security and privacy legal framework with which we or our customers may need to comply, including, but not limited to, the European Union, or the “EU.” The EU’s privacy, data protection and information security landscape is currently evolving, resulting in possible significant operational costs for internal compliance and risk to our business. Within the EU, the General Data Protection Regulation, or the “GDPR,” which went into effect in May 2018 and contains numerous requirements and changes from previously existing EU law, including more robust, direct obligations on data processors in addition to data controllers, heavier documentation requirements for data protection compliance programs and significant increases in the level of sanctions for non-compliance. In particular, under the GDPR, EU data protection authorities have the power to impose administrative fines for violations of the GDPR of up to a maximum of €20 million or 4% of the data controller’s or data processor’s total worldwide global turnover for the preceding fiscal year, whichever is higher, and violations of the GDPR may also lead to damages claims by data controllers and data subjects. Such penalties are in addition to any civil litigation claims by data controllers, customers and data subjects. Being subject to the GDPR, we may need to take steps to cause our processes to be compliant with applicable

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portions of the GDPR, but we cannot assure you that we will be able to implement changes in a timely manner or without significant disruption to our business, or that such steps will be effective, and we may face liability under the GDPR. We expect that there will be additional proposed and adopted laws, regulations and industry standards concerning privacy, data protection and information security in the jurisdictions in which we operate, including in Mexico and Colombia and in jurisdictions into which we may expand in the future.

As we seek to build a trusted and secure consumer platform, and as we expand our customer base and increase the number of transactions we process, we will increasingly be subject to laws and regulations relating to the collection, use, retention, security and transfer of information, including the personally identifiable information of our employees and our customers. These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that are inconsistent with our existing data management practices or the features of our services and platform capabilities, which would materially and adversely affect our business. Additionally, our customers may be subject to differing privacy laws, rules and legislation, which may mean that they require us to be bound by varying contractual requirements applicable to certain other jurisdictions. Adherence to such contractual requirements may impact our collection, use, processing, storage, sharing and disclosure of various types of information including financial information and other personal data, and may mean we become bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters that may further change as laws, rules and regulations evolve. Complying with these requirements and changing our policies and practices may be onerous and costly, and we may not be able to respond quickly or effectively to regulatory, legislative and other developments. These changes may in turn impair our ability to offer our existing or planned features, products and services and increase our cost of doing business. As we expand our customer base, these requirements may vary from customer to customer, further increasing the cost of compliance and doing business. Any additional privacy laws, rules or regulations enacted or approved in Brazil, Mexico, Colombia or in other jurisdictions in which we operate could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits and result in the imposition of material penalties and fines under state and federal laws or regulations, which could seriously harm our business, financial condition or results of operations. Any failure, real or perceived, by us to comply with our posted privacy policies or with any regulatory requirements or orders or other local, state, federal or international privacy or consumer protection-related laws and regulations could cause customers to reduce their use of our products and services and could materially and adversely affect our business.

Increases in reserve, compulsory deposit, minimum capital and contributions to deposit insurance requirements may have a material adverse effect on us.

The Central Bank of Brazil has periodically changed the level of regulatory reserves and compulsory deposits that payment institutions (such as Nu Pagamentos S.A. – Instituição de Pagamento, or “Nu Pagamentos”) and financial institutions (such as Nu Financeira S.A. – SCFI, or “Nu Financeira”) in Brazil are required to maintain, and has adjusted compulsory allocation requirements to finance government programs and mandated contributions to the deposit insurance program maintained by the Credit Guarantee Fund, or the “FGC,” with these changes continuing to be a potential area of risk as they may increase the reserve and compulsory deposit or allocation and contribution requirements in the future or impose new requirements on us, which as a result could reduce our liquidity to fund our loan portfolio and other investments and, as a result, may have a material adverse effect on us our business, financial condition and results of operations.

Compulsory deposits and allocations generally do not yield the same return as other investments and deposits because a portion of compulsory deposits and allocations:

do not bear interest;

must be held in Brazilian federal government securities; and

must be used to finance government programs, including a federal housing program and rural sector subsidies.

In recent years, the CMN and Central Bank of Brazil have also published several rules to implement, update and improve Basel III and associated capital and prudential rules in Brazil. This set of regulations includes a revised definition of capital, capital requirements, capital buffers, credit valuation adjustments, exposures to central

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counterparties, leverage and liquidity coverage ratios. For instance, Public Hearing No. 78 issued by the Central Bank of Brazil in December 2020 proposes a new set of rules aiming to harmonize the capital and prudential requirements applicable to payment services offering by payment institutions (including those provided by Nu Pagamentos) to those applicable to payment services offered by financial institutions. Moreover, the recent Public Consultation No. 88 issued by the Central Bank of Brazil in July 2021 proposes amendments to Resolution CMN No. 4,193 and Circular of the Central Bank of Brazil No. 3,644 of 2013 to address new recommendations of the Bank for International Settlements dealing with credit risk of financial instruments, which could be applicable to the Brazilian financial institutions, including Nu Financeira. These proposals, if approved and implemented by the Central Bank of Brazil, may increase the minimum capital requirements applicable to Nu Pagamentos or Nu Financeira, as applicable. However, no assurance can be given that such rules will be adopted, enforced or interpreted in a manner that will not have an adverse effect on us.

We are subject to regulatory intervention and antitrust litigation under competition laws.

We are subject to scrutiny from governmental agencies under competition laws in countries in which we operate. Some jurisdictions also provide private rights of action for competitors or consumers to assert claims of anticompetitive conduct pursuant to which companies or governmental agencies may allege that our actions violate antitrust or competition laws, or otherwise constitute unfair competition. Contractual agreements with buyers, sellers or other companies, as well as our unilateral business practices, could give rise to regulatory action or antitrust investigations or litigation. Some regulators may perceive our business to have such significant market power that otherwise uncontroversial business practices could be deemed anticompetitive. Any such claims and investigations, even if they are unfounded, may be expensive to defend, involve negative publicity and substantial diversion of management time and effort, and could result in significant judgments against us and harm to our business.

Requirements associated with being a public company in the United States will require significant company resources and management attention.

Upon completion of this offering, we will be subject to certain reporting requirements of the Exchange Act and the other rules and regulations of the SEC and the Nasdaq/NYSE. We will also be subject to various other regulatory requirements, including the Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal, accounting and financial compliance costs and to make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage.

New rules and regulations relating to disclosure, financial reporting and controls and corporate governance, which could be adopted by the SEC, the Nasdaq/NYSE or other regulatory bodies or exchange entities from time to time, could result in a significant increase in legal, accounting and compliance costs and make certain corporate activities more time-consuming and costly, which could materially affect our business, financial condition and results of operations. These rules and regulations may also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. These obligations will also require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business. Given that most of the individuals who now constitute our management team have limited experience managing a publicly traded company and complying with the increasingly complex laws pertaining to public companies, initially, these new obligations will demand even greater attention. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and results of operations.

The requirements associated with being a foreign BDR issuer in Brazil will require significant company resources and management attention.

Concurrently with this offering, we intend to issue BDRs on the B3 and, as such, we will be a foreign issuer of BDRs in Brazil, as defined by the CVM. As such, we will be subject to certain rules, in accordance with the laws and regulations applicable to publicly traded companies in Brazil, including rules and regulations issued by the CVM and the B3. Such rules and regulations may increase our legal, accounting and financial compliance costs and may make certain activities more time consuming and costly. For example, as a foreign BDR issuer in Brazil, we will be required to appoint a legal representative in Brazil, prepare and annually disclose certain forms, such as the Brazilian reference form (formulário de referência), as well as to disclose a Portuguese version of all of the relevant

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information disclosed by us in the United States, including financial statements, material facts and other filings. Any new rules and regulations related to the disclosure of information, reports, financial controls and corporate governance, which may be adopted by the CVM, B3 or other regulatory or self-regulatory bodies, may result in a significant increase in our costs, which could adversely affect our business, financial condition, and results of operations. Existing and any new obligations will also require substantial attention from our management and may divert our management’s attention away from our business. Such cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and results of operations.

There can be no assurance that we will not be a passive foreign investment company for any taxable year, which could subject U.S. investors in our Class A ordinary shares or BDRs to significant adverse U.S. federal income tax consequences.

Under the Internal Revenue Code of 1986, as amended, or the “Code,” we will be a passive foreign investment company, or “PFIC,” for any taxable year in which, after applying certain look-through rules, either (i) 75% or more of our gross income consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income.” Passive income generally includes dividends, interest, rents, certain non-active royalties, and capital gains. Cash is generally a passive asset for these purposes.

Based on proposed U.S. Treasury regulations, or the “1995 Proposed Regulations,” including those which are proposed to be effective for taxable years beginning after December 31, 1994 and our current operations, income, assets and certain estimates and projections (such as the relative values of our assets, including goodwill, which is based on the expected price of our Class A ordinary shares and BDRs in this offering), we do not expect to be a PFIC for our 2021 taxable year. However, there can be no assurance that the Internal Revenue Service, or the “IRS,” will agree with our conclusion. Among other reasons, whether we will be a PFIC in 2021 or any future taxable year is uncertain because: (i) the 1995 Proposed Regulations may not be finalized in their current form, (ii) PFIC status is determined on an annual basis at the end of each taxable year, (iii) we will hold a substantial amount of cash following this offering and (iv) the composition of our income and assets and the market value of our assets (which may be determined, in part, by reference to the market price of our Class A ordinary shares and BDRs, which could be volatile) may vary from time to time. In addition, recently proposed U.S. Treasury regulations significantly alter the application of the exception to the PFIC rules for the active conduct of a banking, financing, or similar business, or the “2021 Proposed Regulations.” The application of the 2021 Proposed Regulations is not entirely clear and, if we can no longer rely on the 1995 Proposed Regulations, and the 2021 Proposed Regulations are adopted in their current form, there can be no assurances that we will not be considered a PFIC for any taxable year.

If we are a PFIC for any taxable year during which a U.S. investor holds Class A ordinary shares or BDRs, we generally would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds Class A ordinary shares, even if we ceased to meet the threshold requirements for PFIC status. Such a U.S. investor may be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. A “mark-to-market” election may be available that will alter the consequences of PFIC status if our Class A ordinary shares or BDRs are regularly traded on a qualified exchange. For further discussion, see “Taxation—U.S. Federal Income Tax Considerations.”

Changes in tax laws, incentives, benefits and regulations may adversely affect our financial condition and results of operations.

Changes in tax laws, regulations, related interpretations and tax accounting standards in Brazil, Mexico, Colombia, the Cayman Islands, the United States or any other jurisdiction in which we operate or may in the future operate may result in higher taxation on our business, which may significantly reduce our profits and cash flows from operations. For example, Brazilian Constitutional Amendment No. 102/2019 increased the federal corporate contribution over the net profits of financial institutions from 15% to 20% as of March 1, 2020, and Provisional Measure No. 1,034/2021 increased the same federal corporate contribution from 20% to 25% and will come into force from July 1, 2021 to December 31, 2021. Our payment processing activities are also subject to a Municipal Tax on Services (Imposto Sobre Serviços, or “ISS”), and any increases in ISS rates would harm our financial results. It is not possible to precisely predict if and how potential changes may affect our business, but one or more states, municipalities or federal governments may seek to challenge the taxation or procedures applied to our transactions,

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and could impose taxes or additional reporting, record-keeping or indirect tax collection obligations on our business. New taxes could also require us to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could have a material adverse effect on our business and financial results.

In addition, our net losses may grow if certain tax incentives are not retained or renewed. For example, Brazilian Law No. 11,196 currently grants tax benefits to companies that invest in research and development, which reduces our annual income tax expense. However, we cannot guarantee that such tax benefits will remain in place or that we will continue to qualify for them.

Brazilian government authorities at the federal, state and local levels are considering changes in tax laws to cover budgetary shortfalls resulting from the recent economic downturn in Brazil, including the impact of COVID-19. If enacted, such changes may harm our financial results by increasing our tax burden, increasing our tax compliance costs or otherwise affecting our financial condition, results of operations and cash flows. The Brazilian government regularly enacts reforms to the tax and other assessment regimes to which we and our customers are subject. Such reforms include changes in tax rates and, occasionally, the enactment of temporary levies, the proceeds of which are earmarked for designated governmental purposes. The effects of these changes and any other changes that result from enactment of additional tax reforms cannot be quantified and there can be no assurance that any such reforms would not have an adverse effect on our business. Furthermore, such changes may produce uncertainty in the financial system, thereby increasing the cost of borrowing and contributing to an increase in our non-performing credit portfolio.

Further, recent Brazilian government initiatives have proposed changes to the Brazilian tax regime that, if enacted, could impact our business. Bill of Law No. 3,887/2020 aims to replace social contributions, or “PIS/COFINS,” with a new Contribution on Goods and Services, or “CBS,” and Bill of Law No. 2,373/2021 seeks to introduce a comprehensive reform of income tax rules, chiefly seeking to revoke the income tax exemption on the distribution of dividends by Brazilian companies, while also introducing new anti-avoidance provisions for a broad variety of transactions within related parties, ending the possibility of deducting expenses corresponding to the payment of interest on equity, extending the minimum term for the amortization of intangibles, and changing the income tax rules related to investments in Brazilian investment funds, among other changes. Specifically, the deductibility of interest on equity will be prohibited, impacting the overall tax burden of our operations in Brazil. Although these laws have not yet been enacted and it is not possible to determine at this time the exact changes that will eventually pass into law, any such changes could have adverse effects on our results and operations, as well as on the taxation applied to the dividends distributed from our Brazilian subsidiaries.

Separately, establishing a provision for income tax expense and filing returns requires us to make judgments and interpretations about the application of inherently complex tax laws, and in particular Brazilian income tax laws, which are subject to different interpretations by the taxpayer and relevant governmental taxing authorities. If the judgments, estimates and assumptions we use in preparing our tax returns are subsequently found to be incorrect, we could become involved in a dispute with the relevant authority, which in Brazil can involve prolonged evaluation periods and litigation before a final resolution is reached, and which introduces further uncertainty and risk with respect to our tax and related liabilities.

Litigation, proceedings or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial condition and results of operations.

We have been, and may in the future be, party to significant legal, arbitration and administrative proceedings arising in the ordinary course of our business or from extraordinary corporate, tax or regulatory events, involving our employees, customers or suppliers, or environmental, competition, tax or other governmental matters, particularly with respect to civil, tax and labor claims, and in connection with conflicts of interest and lending activities. In view of the inherent difficulty of predicting the outcome of such legal matters, particularly where the claimants seek very large or indeterminate damages, or where the cases present novel legal theories, involve a large number of parties or are in the early stages of investigation or discovery, we cannot state accurately what the eventual outcome of these pending matters will be. The amount of our provisions in respect to these matters may be substantially less than the total amount of the claims asserted against us, and, in light of the uncertainties involved in such claims and proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the provisions recorded by us. As a result, the outcome of a highly uncertain matter may become material to

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our operating results. As of December 31, 2020, we had provisions for taxes, other legal contingencies and other provisions for R$2.5 million.

Our indemnities and insurance coverage may not cover all claims that may be asserted against us and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Furthermore, there is no guarantee that we will be successful in defending ourselves in future proceedings or similar matters under various laws. Should the ultimate judgments or settlements in any proceeding or investigation significantly exceed our indemnity rights and insurance coverage, they could have a material adverse effect on our business, financial condition and results of operations and the price of our Class A ordinary shares and BDRs. Further, even if we adequately defend our case in a proceeding or court action, we may have to set aside significant financial and management resources to settle issues raised by such proceedings, which could adversely affect our business. For more information see “Business—Legal Proceedings.”

Our operations could be adversely affected by labor actions, disputes and other labor-related disruptions in the countries in which we operate.

We are subject to risks under applicable federal, state and municipal labor laws and regulations of the countries in which we operate, including disputes concerning which union applies to particular workers or the activities covered by a particular union, collective bargaining rights and compensation and other benefits, various issues arising from union contracts, potential labor reclassifications, and strikes, among others. Labor laws and regulations are complex, broad in scope and are often vague and differ vastly across states, countries and businesses and may require us to make interpretations of such laws and regulations, which may involve subjective factors or judgments. Further, these laws and regulations are subject to continuing and evolving interpretation by regulatory agencies, administrative law judges and courts. New or different interpretations of existing requirements, new laws or regulations or the enforcement of existing or new laws and regulations could subject our current practices to allegations of impropriety or illegality, or require us to make changes in our operations, facilities, equipment, personnel, compensation services, or operating expenses to comply with evolving requirements. We cannot guarantee that we will be able to make any such changes in a cost-efficient manner or at all.

We are subject to regulatory and administrative inspection, examinations and investigations.

The financial and payments industries face substantial regulatory risks and litigation. Like many firms operating within the financial and payments industries, we are experiencing a difficult regulatory environment across our markets. Increased regulatory oversight of the financial and payments industries generally, new laws and regulations affecting the financial industry and ever-changing regulatory interpretations of existing laws and regulations have made this an increasingly challenging and costly regulatory environment in which to operate. In Brazil specifically, the current regulatory and tax enforcement environment reflects an increased supervisory focus on enforcement, combined with uncertainty about the evolution of the regulatory regime, and may lead to material operational and compliance costs.

We may from time to time be subject to inspections, examinations or investigations by regulatory authorities, which could result in the identification of matters that may require remediation activities or enforcement proceedings by a regulator. The direct and indirect costs of responding to these examinations could be significant, and any examinations, investigations or litigation could result in settlements, awards, injunctions, fines and penalties and could have an adverse effect on our ability to offer some of our products and services.

As the regulatory framework for artificial intelligence and machine learning technology evolves, our business, financial condition and results of operations may be adversely affected.

The regulatory framework for artificial intelligence and machine learning technology is evolving and remains uncertain. It is possible that new laws and regulations will be adopted, or existing laws and regulations may be interpreted in new ways, that would affect the operation of our platform and the way in which we use artificial intelligence and machine learning technology, including with respect to fair lending laws. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.

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We may face restrictions and penalties under the Brazilian Consumer Protection Code.

Brazil has a series of strict consumer protection statutes, collectively known as the Consumer Protection Code (Código de Defesa do Consumidor), that are intended to safeguard consumer interests and that apply to all companies in Brazil that supply products or services to Brazilian consumers. These consumer protection provisions include protection against misleading and deceptive advertising, protection against coercive or unfair business practices and protection in the formation and interpretation of contracts, usually in the form of civil liabilities and administrative penalties for violations. These penalties are often levied by the Brazilian Consumer Protection Agencies (Fundação de Proteção e Defesa do Consumidor, or “PROCONs”), which oversee consumer issues on a district-by-district basis. Companies that operate across Brazil may face penalties from multiple PROCONs, as well as the National Secretariat for Consumers (Secretaria Nacional do Consumidor, or “SENACON”). Companies may settle claims made by consumers via PROCONs by paying compensation for violations directly to consumers and through a mechanism that allows them to adjust their conduct, called a conduct adjustment agreement (Termo de Ajustamento de Conduta, or “TAC”). Brazilian Public Prosecutor Offices may also commence investigations related to consumer rights violations and this TAC mechanism is also available for them. Companies that violate TACs face potential automatic fines. Brazilian Public Prosecutor Offices may also file public civil actions against companies in violation of consumer rights, seeking strict observation to the consumer protection law provisions and compensation for the damages consumers may have suffered. As of December 31, 2020, we had approximately 2,500 active proceedings with PROCONs and small claims courts relating to consumer rights. To the extent customers file such claims against us in the future, we may face reduced revenue due to refunds and fines for non-compliance that could negatively impact our results of operations.

We expect that there will be additional proposed and adopted laws, regulations and industry standards concerning consumer protection in the jurisdictions in which we operate and jurisdictions into which we intend to expand in the future, including in Mexico and Colombia and elsewhere in Latin America.

The Cayman Islands Economic Substance Act may affect our operations.

The Cayman Islands has recently enacted the International Tax Co-operation (Economic Substance) Act (As Revised), or the “Cayman Economic Substance Act,” which we are required to comply with as a Cayman Islands company. Our obligations under the Cayman Economic Substance Act include filing annual notifications, which need to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Cayman Economic Substance Act. As it is a new regime, it is anticipated that the Cayman Economic Substance Act will evolve and be subject to further clarification and amendments. We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in order to comply with all requirements under the Cayman Economic Substance Act. Failure to satisfy these requirements may subject us to penalties under the Cayman Economic Substance Act.

Risks Relating to the Countries in Which We Operate

Exchange rate instability may have a material adverse effect on the economies of the countries in which we operate and the price of our Class A ordinary shares and BDRs.

The currencies of the countries in which we operate, most notably Brazil, Colombia and Mexico, have experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. In particular, the Brazilian government has implemented various economic plans and used various exchange rate policies to stabilize the real, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system, which plans and policies have had varying degrees of success. Exchange rate volatility could cause our costs to increase relative to our revenue, given that around 30% of our costs are currently directly or indirectly linked to the U.S. dollar, whereas the majority of our revenue is denominated in the real.

Further, given that a majority of the revenue generated by our operations is denominated in reais, any revenue growth that we may experience may not be sufficient to offset adverse exchange rate fluctuations. Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate among the real, the U.S. dollar and other currencies. For further information, see “Exchange Rates.”

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Depreciation of the real relative to the U.S. dollar has created additional inflationary pressures in Brazil, which has led to increases in interest rates, limited Brazilian companies’ access to foreign financial markets and prompted the adoption of recessionary policies by the Brazilian government. Depreciation of the real may also, in the context of an economic slowdown, lead to decreased consumer spending, deflationary pressures and reduced growth of the Brazilian economy as a whole, and thereby harm our asset base, financial condition and results of operations. Additionally, depreciation of the real would make our foreign-currency-linked obligations and funding more expensive, negatively affect the market price of our securities portfolios and have similar consequences for our borrowers. Conversely, appreciation of the real relative to the U.S. dollar and other foreign currencies would lead to a deterioration of the Brazilian balance of payments, as well as dampen export-driven growth. Depending on the circumstances, either depreciation or appreciation of the real could materially and adversely affect the growth of the Brazilian economy and our business, financial condition and results of operations.

Our operations are dependent upon the performance of the economies in which we do business, and Latin American economies in particular. Crises and volatility in the financial markets of countries other than Brazil may affect the global financial markets and the Brazilian economy and may have a negative impact on our operations.

Volatility and uncertainty in global financial and credit markets have generally led to a decrease in liquidity and an increase in the cost of funding for Brazilian and international issuers and borrowers. Such conditions may adversely affect our ability to access capital and liquidity on financial terms that are acceptable, if at all. If we are unable to access capital and liquidity on financial terms acceptable to us or at all, our financial condition and the results of our operations may be adversely affected. In addition, the economic and market conditions of other countries, including the United States, countries in the European Union and emerging markets, may affect the volume of foreign investments in Brazil. If the level of foreign investment declines, our access to capital may likewise decline, which could negatively affect our business, ability to take advantage of strategic opportunities and, ultimately, the trading price of our Class A ordinary shares and BDRs.

Further, the demand for credit and financial services, as well as our customers’ ability to make payments and deposits, is directly impacted by macroeconomic variables, such as economic growth, income, unemployment rates, inflation and fluctuations in interest and foreign exchange rates. Disruptions and volatility in the global financial markets may have significant consequences in the countries in which we operate, such as volatility in the prices of securities, interest rates and foreign exchange rates. Higher uncertainty and volatility may result in a slowdown in the credit market and the economy, which, in turn, could lead to higher unemployment rates and a reduction in the purchasing power of consumers. Such events may significantly impair our customers’ ability to perform their obligations and increase overdue or non-performing loans, resulting in an increase in the risk associated with our lending activity.

Governments have exercised, and continue to exercise, significant influence over the Brazilian economy and the other economies in which we operate. This influence, as well as political and economic conditions in Brazil and the other countries in which we operate, could harm our business, financial condition and results of operations and the price of our Class A ordinary shares and BDRs.

Governments in many of the markets in which we currently, or may in the future, operate, frequently exercise significant influence over their respective economies and occasionally make significant changes in policy and regulations. Government actions to control inflation and other policies and regulations have often involved, among other measures, increases or decreases in interest rates, changes in fiscal policies, wage and price controls, foreign exchange rate controls, blocking access to banking accounts, currency devaluations, capital controls and import and export restrictions. We have no control over and cannot predict what measures or policies governments may take in the future. Our business and the market price of our Class A ordinary shares and BDRs may be harmed by changes in government policies, as well as general economic factors, including, without limitation:

growth or downturn of the relevant economy;

interest rates and monetary policies;

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exchange rates and currency fluctuations;

inflation;

liquidity of the domestic capital and lending markets;

import and export controls;

exchange controls and restrictions on remittances abroad and payments of dividends;

modifications to laws and regulations according to political, social and economic interests;

fiscal policy, monetary policy and changes in tax laws;

economic, political and social instability, including general strikes and mass demonstrations;

labor and social security regulations;

energy and water shortages and rationing;

public health crises, such as the ongoing COVID-19 pandemic;

commodity prices; and

other political, diplomatic, social and economic developments in or affecting the countries in which we operate.

Uncertainty over whether Brazil and other Latin American governments will implement reforms or changes in policy or regulation affecting these or other factors in the future may affect economic performance and contribute to economic uncertainty in Latin America, which may have an adverse effect on our activities and consequently our results of operations, and may also adversely affect the trading price of our Class A ordinary shares and BDRs.

In particular, Latin America’s political environment has historically influenced, and continues to influence, the performance of the region’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil and other Latin American countries. The recent economic instability in Latin America has contributed to a decline in market confidence in the Latin American economies as well as to a deteriorating political environment.

As has been true in the past, the current political and economic environment in Brazil and certain other Latin American countries has and is continuing to affect the confidence of investors and the general public, which has historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil and elsewhere in Latin America, which may adversely affect us and our Class A ordinary shares and BDRs.

Changes made by the Central Bank of Brazil in the basic interest rate could materially adversely affect our operating results and financial condition.

Our business is conducted primarily in Brazil, where the Monetary Policy Committee of the Central Bank of Brazil, or “COPOM,” sets the target basic interest rate for the Brazilian banking system and makes changes in this rate as an instrument of monetary policy. The basic interest rate is the adjusted average rate of daily financing calculated in the Special System for Settlement and Custody, or “SELIC,” for federal bonds. Variations in the basic interest rate can be harmful to us, causing, among other effects, a reduction in the demand for our credit and investment products, an increase in the cost of raising funds and the risk of default by our customers, all of which could adversely affect us.

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Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on our business, financial condition and results of operations.

Our performance depends on the overall health and growth of the Brazilian economy. Brazilian GDP growth has fluctuated over the past few years, with a contraction of 3.5% in 2015, a contraction of 3.3% in 2016, growth of 1.1% in 2017, growth of 1.1% in 2018, growth of 1.1% in 2019 and a contraction of 4.1% in 2020. Growth is limited by inadequate infrastructure, including potential energy shortages and deficient transportation, logistics and telecommunication sectors, general strikes, the lack of a qualified labor force and the lack of private and public investments in these areas, which limit productivity and efficiency. Any of these factors could lead to labor market volatility and generally impact income, purchasing power and consumption levels, which could limit growth and ultimately have a material adverse effect on us.

Inflation and certain government measures to curb inflation have historically harmed the economies and capital markets in some of the countries in which we operate, including Brazil, and high levels of inflation in the future could harm our business and the price of our Class A ordinary shares and BDRs.

In the past, high levels of inflation have adversely affected the economies and capital markets of some of the countries in which we operate, particularly Brazil, and have hampered the ability of their governments to create conditions that stimulate or maintain economic growth. Moreover, governmental measures to curb inflation and market speculation about possible future governmental measures have contributed to the negative economic impact of inflation and have created general economic uncertainty and heightened volatility in the capital markets. Such measures have at times involved restrictive monetary policies and high interest rates that have limited the availability of credit and economic growth.

For example, according to Brazil’s Broad Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo, or the “IPCA index”), Brazil recorded inflation of 4.2% in 2020, 4.3% in 2019 and 3.8% in 2018. Measures adopted by the Brazilian government to control inflation have included the maintenance of a restrictive monetary policy with high interest rates, thereby limiting the availability of credit and reducing economic growth. Further, COPOM frequently adjusts official interest rates in situations of economic uncertainty to meet the economic goals established by the Brazilian government. On August 8, 2020, the SELIC rate was set at 2.0% by COPOM, while recently, on June 16, 2021, it was set at 4.25%, due to concerns with inflationary pressures. Inflation and certain governmental actions to curb inflation, together with the speculation about governmental measures to be adopted, have materially and adversely affected the Brazilian economy and contributed to economic uncertainty in Brazil, heightening volatility in the Brazilian capital markets.

Any future measures adopted by the governments of the countries in which we operate, including a reduction in interest rates, intervention in the exchange market or the implementation of mechanisms to adjust or determine the value of the relevant local currency, may trigger inflation, adversely affecting the overall performance of the relevant country’s economy. If Brazil or other Latin American countries in which we operate face significant inflation or deflation, we and our ability to meet our obligations may be adversely affected. These pressures could also affect our access to international financial markets. If Brazil or other Latin American countries in which we operate experience high inflation in the future, we may be unable to adjust the prices we charge our customers in order to offset the effects of inflation on our cost structure, which could increase our costs and reduce our operating margins.

Moreover, in the event of increased inflation, governments may choose to significantly increase official interest rates. The increase in interest rates may affect not only the cost of our new borrowings and financing, but also the cost of our current indebtedness, as well as our cash and cash equivalents, securities and lease agreements payable, which are subject to interest rates. Such events would likely materially adversely affect our results of operations.

Any further downgrading of Brazil’s credit rating could depress the trading price of our Class A ordinary shares and BDRs.

We may be harmed by investors’ perceptions of risks related to Brazil’s sovereign debt credit rating. Rating agencies regularly evaluate Brazil and its sovereign credit ratings, which are based on a number of factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness metrics and the potential for changes in any of these factors. The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status:

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Standard & Poor’s initially downgraded Brazil’s credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade. On January 11, 2018, Standard & Poor’s further downgraded Brazil’s credit rating from BB to BB-stable, which was reaffirmed on June 2, 2021.

In December 2015, Moody’s placed Brazil’s Baa3’s issue and bond ratings under review for downgrade and subsequently downgraded the issue and bond ratings to below investment grade, at Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, taking into account the low growth environment and the challenging political scenario. On May 25, 2021, Moody’s maintained Brazil’s credit rating at Ba2-stable.

Fitch downgraded Brazil’s sovereign credit rating to BB-positive with a negative outlook, citing the rapid expansion of the country’s budget deficit and the worse-than-expected recession. In February 2018, Fitch downgraded Brazil’s sovereign credit rating again to BB-negative, citing, among other factors, fiscal deficits, the increasing burden of public debt and an inability to implement reforms that would structurally improve Brazil’s public finances. On May 27, 2021, Fitch reaffirmed Brazil’s credit rating at BB-negative.

Brazil’s sovereign credit rating is currently rated below investment grade by the three main credit rating agencies. Consequently, the prices of securities offered by companies with significant operations in Brazil have been negatively affected. A prolongation or worsening of the current Brazilian recession and continued political uncertainty, among other factors, could lead to further ratings downgrades. Any further downgrade of Brazil’s sovereign credit ratings could heighten investors’ perception of risk and, as a result, cause the trading price of our Class A ordinary shares and BDRs to decline.

Risks Relating to Our Class A Ordinary Shares, our BDRs and the Offering

Prior to this offering, there has not been a public market for our Class A ordinary shares. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the Nasdaq/NYSE, or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our Class A ordinary shares that you buy, and may be unable to convert your Class A ordinary shares into BDRs or vice-versa. Investors may purchase Class A ordinary shares on Nasdaq/NYSE to be held in custody for the issue of BDRs in Brazil. See “Description of Brazilian Depositary Receipts” for more information regarding our BDR program.

The initial public offering price for the Class A ordinary shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our Class A ordinary shares at prices equal to or greater than the price paid by you in this offering. The market price of our Class A ordinary shares may be influenced by many factors, some of which are beyond our control, including:

announcements by us or our competitors of significant developments;

technological innovations by us or competitors;

the failure of financial analysts to cover our Class A ordinary shares after this offering or changes in financial estimates by analysts;

changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow our Class A ordinary shares or the shares of our competitors;

actual or anticipated variations in our operating results;

future sales of our shares; and

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investor perceptions of us and the industries in which we operate.

In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Class A ordinary shares, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.

Furthermore, the closing of this international offering is not conditioned upon the closing of the concurrent Brazilian offering, but the closing of the concurrent Brazilian offering is conditioned upon the closing of this international offering, and there can be no assurance that the concurrent Brazilian offering will be completed on the terms described herein or at all.

Our founding shareholder and CEO, David Vélez Osorno will own % of our outstanding Class B ordinary shares after this offering, which will represent approximately % of the voting power of our issued share capital. This concentration of ownership and voting power will limit your ability to influence corporate matters.

Following this offering, David Vélez Osorno, our founding shareholder and chief executive officer, will continue to control our Company through his beneficial ownership of % of our outstanding Class B ordinary shares, and consequently, % of the combined voting power of our issued share capital (or % if the underwriters exercise the over-allotment option in full). Our Class B ordinary shares are entitled to 20 votes per share and our Class A ordinary shares are entitled to one vote per share. Our Class B ordinary shares are convertible into an equivalent number of Class A ordinary shares. As a result, so long as David Vélez Osorno beneficially owns % of the outstanding Class B ordinary shares, even if he beneficially owns significantly less than 50% of our outstanding share capital, he will be able to effectively control our decisions and will be able to elect a majority of the members of our board of directors. David Vélez Osorno will also be able to direct our actions in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses, and may cause us to make acquisitions that increase the amount of our indebtedness or number of outstanding Class A ordinary shares, sell revenue-generating assets or inhibit change of control transactions that may benefit other shareholders. In addition, in connection with this offering, we have entered into a Shareholder’s Agreement with David Vélez Osorno pursuant to which we have granted him the right to nominate directors to our board and committees, rights to information, and rights to approve certain of our corporate actions. See “Management—Shareholder’s Agreement.” The decisions of David Vélez Osorno on these matters may be contrary to your expectations or preferences, and they may take actions that could be contrary to your interests. For further information regarding shareholdings in our company, see “Principal and Selling Shareholders.”

We have granted the holders of our Class B ordinary shares preemptive rights to acquire shares that we may sell in the future, which may impair our ability to raise funds.

Under our Memorandum and Articles of Association, the holders of our Class B ordinary shares are entitled to preemptive rights to purchase additional ordinary shares in the event that there is an increase in our share capital and additional ordinary shares are issued, upon the same economic terms and at the same price, in order to maintain their proportional ownership interests, which will be approximately % of our outstanding shares, respectively, immediately after this offering, assuming no exercise of the underwriters’ over-allotment option. The exercise by holders of our Class B ordinary shares of their preemptive rights may impair our ability to raise funds, or adversely affect the terms on which we are able to raise funds, as we may not be able to offer to new investors the quantity of our shares that they may desire to purchase. For more information see “Description of Share Capital—Ordinary Shares—Preemptive or Similar Rights.”

Future sales of a substantial number of shares of our Class A ordinary shares, including in the form of BDRs, in the public market following this offering, or the perception that such sales could occur, could cause the price of our Class A ordinary shares or BDRs to decline.

The market price of our Class A ordinary shares could decline as a result of substantial sales of our Class A ordinary shares, including in the form of BDRs, particularly sales by our directors, executive officers and significant shareholders, a large number of Class A ordinary shares or BDRs becoming available for sale or the perception in the market that such sales could occur. Upon the closing of this offering, we will have approximately Class

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A ordinary shares outstanding, including those underlying BDRs, and Class B ordinary shares outstanding (or Class A ordinary shares, including those underlying BDRs, and Class B ordinary shares outstanding, if the underwriters exercise in full their over-allotment option). Subject to the lock-up agreements described below, the Class A ordinary shares sold in this offering, as well as the Class A ordinary shares underlying outstanding BDRs, will be freely tradable without restriction or further registration under the Securities Act by persons other than our affiliates within the meaning of Rule 144 of the Securities Act.

Our shareholders or entities controlled by them or their permitted transferees will, subject to the lock-up agreements described below, be able to sell their Class A ordinary shares, including in the form of BDRs, in the public market from time to time without registering them, subject to certain limitations on the timing, amount and method of those sales imposed by regulations promulgated by the SEC and the CVM, as applicable. If any of our shareholders, the affiliated entities controlled by them or their respective permitted transferees were to sell a large number of their Class A ordinary shares, including in the form of BDRs, the market price of our Class A ordinary shares may decline significantly. In addition, the perception in the public markets that sales by them might occur may also cause the trading price of our Class A ordinary shares to decline.

We, all of our executive officers and directors and the holders of substantially all of our equity securities have entered into lock-up agreements with the underwriters of this offering that restrict our and our equityholders’ ability to transfer our securities, subject to certain exceptions, during the period ending on the day following the date of this prospectus. However, may, in their sole discretion and without notice, release all or any portion of the shares from the restrictions in any of the lock-up agreements described above. In addition, these lock-up agreements are subject to the exceptions described in “Underwriting,” including our right to issue new shares if we carry out an acquisition or enter into a merger, joint venture or strategic participation.

In addition, based on our capitalization as of June 30, 2021, shares issuable upon exercise of outstanding options and the settlement of outstanding RSUs will also be eligible for sale upon expiration of the lock-up period. We intend to register all of the shares underlying outstanding options and any shares underlying other equity incentives we may grant in the future for public resale under the Securities Act. Accordingly, these shares will be able to be freely sold in the public market upon issuance to the extent permitted by any applicable vesting requirements and the lock-up agreements described above.

Sales of a substantial number of our Class A ordinary shares, including in the form of BDRs, including upon expiration of the lock-up agreements, the perception that such sales may occur, or early release of these lock-up periods, could cause the trading price of our Class A ordinary shares to fall or make it more difficult for you to sell your Class A ordinary shares at a time and price that you deem appropriate.

Our Memorandum and Articles of Association and the Shareholder’s Agreement contain anti-takeover provisions, and the Central Bank of Brazil imposes certain restrictions and requirements, which may discourage a third-party from acquiring us and adversely affect the rights of holders of our Class A ordinary shares.

Our Memorandum and Articles of Association and the Shareholder’s Agreement contain certain provisions that could limit the ability of others to acquire control of our company, including provisions that:

authorize our board of directors to issue, without further action by the shareholders, undesignated preferred shares with terms, rights and preferences determined by our board of directors that may be senior to our Class A ordinary shares;

institute a staggered board of directors and restrictions on our shareholders to fill a vacancy on the board of directors;

impose advance notice requirements for shareholder proposals;

limit our shareholders’ ability to call special meetings;

require approval from the holders of at least two-thirds in voting power of all outstanding shares entitled to vote thereon to amend a provision of our Memorandum and Articles of Association;

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condition any change of control of our company on the consent of the holders of a majority of the Class B ordinary shares in issue; and

provides our founding shareholder, David Vélez Osorno, so long as our founding shareholder and his affiliates beneficially own shares accounting for at least 40% of the voting power of our issued share capital, the ability to designate a majority of the members of our board of directors, as described in “Management—Shareholder’s Agreement.”

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take other corporate actions that you desire.

In addition, certain of our subsidiaries are Brazilian financial institutions (including Nu Financeira, Nu DTVM and NuInvest) and certain are Brazilian payment institutions (including Nu Pagamentos), all of which are regulated by the Central Bank of Brazil. Any proposed change of control of a financial or payment institution must be submitted to and conditioned upon approval from the Central Bank of Brazil. Further, if a person that is not the controlling shareholder of such an institution acquires: (i) more than 15% of the total equity capital of a financial institution, directly or indirectly; or (ii) more than 15% of the voting equity capital or more than 10% of the total equity capital of a payment institution, directly or indirectly (in each case, a “Qualified Equity Participation”), any such acquisition must be submitted to the Central Bank of Brazil, which has the right to request documents and information, and can demand that the acquisition be modified or undone in case of any irregularities. This rule also applies to any expansion of a Qualified Equity Participation. Such rules and regulations of the Central Bank of Brazil could likewise discourage, delay or prevent a transaction involving a change in control of our financial or payment institution subsidiaries, and could make it difficult for you and other shareholders to cause us to take corporate actions that you desire.

Our dual class capital structure means that our shares are not eligible to be included in certain indices. We cannot predict the impact this may have on the trading price of our Class A ordinary shares.

In 2017, FTSE Russell and S&P Dow Jones announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices to exclude companies with multiple classes of shares, such as ours, from being added to such indices. FTSE Russell announced plans to require new constituents of its indices to have at least five percent of their voting rights in the hands of public shareholders, whereas S&P Dow Jones announced that companies with multiple share classes, such as ours, will not be eligible for inclusion in the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. We cannot guarantee that other stock indices will not take a similar approach to FTSE Russell and S&P Dow Jones in the future. Under the announced policies, our dual class capital structure is not eligible for inclusion in either of these indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not invest in our stock. It continues to be somewhat unclear what effect, if any, these policies will have on the valuations of publicly traded companies excluded from the indices, but in certain situations they may depress these valuations compared to those of other similar companies that are included. Exclusion from indices could make our Class A ordinary shares less attractive to investors and, as a result, the market price of our Class A ordinary shares could be adversely affected.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Class A ordinary shares and our trading volume could decline.

The trading market for our Class A ordinary shares depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our Class A ordinary shares or publish inaccurate or unfavorable research about our business, the price of our Class A ordinary shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Class A ordinary shares could decrease, which might cause the price of our Class A ordinary shares and trading volume to decline.

We may not pay any cash dividends in the foreseeable future.

The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition,

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operating and capital requirements, and other factors as our board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

New investors in our Class A ordinary shares and BDRs will experience immediate and substantial dilution after this offering.

The initial public offering price of our Class A ordinary shares will be substantially higher than the pro forma net tangible book value per share of the outstanding Class A ordinary shares (and those underlying our BDRs) immediately after this offering. Based on an assumed initial public offering price of US$ per share (the midpoint of the price range set forth on the cover of this prospectus) and our net tangible book value as of June 30, 2021, if you purchase our Class A ordinary shares in this offering you will pay more for your shares than the amounts paid by our existing shareholders for their shares and you will suffer immediate dilution of approximately US$ per share in pro forma net tangible book value. See “Dilution.”

Pursuant to Brazilian law, we may amend our deposit agreement in respect of the BDRs and the rights of BDR holders by means of an agreement with the BDR Depositary and without the consent of BDR holders.

Pursuant to Brazilian law, we may amend the Deposit Agreement and the rights of BDR by means of an agreement with the BDR Depositary and without the consent of BDR holders. In that case, even if the amendment or change is materially adverse to the rights of BDR holders, it will become effective and the BDR holders will not be able to challenge such amendment.

Holders of our BDRs registered in a nominee account may not be able to exercise voting rights as readily as a shareholder.

Holders of BDRs are not and will not be considered to be holders of our Class A ordinary shares and are not entitled to attend or vote at meetings of our shareholders. We have agreed with the BDR Depositary that upon receipt by the BDR Depositary of notice of any meeting of our shareholders, the BDR Depositary will publish notice of such meeting for the holders of BDRs, requesting instructions by a specified date from the holders of BDRs as to the voting of our Class A ordinary shares represented by their BDRs. In order to direct the voting of any such shares, holders of BDRs must deliver instructions to the BDR Depositary by the specified date. Neither we nor the BDR Depositary can guarantee that you will see the published notice in time to instruct the BDR Depositary as to the voting of our Class A ordinary shares represented by your BDRs and it is possible that you will not have the opportunity to direct the voting of any shares. For more information, see “Description of Brazilian Depositary Receipts—Deposit Agreement—Voting Rights of BDRs.”

There are no specific rules relating to the delisting of our BDRs from the B3.

We may decide to delist our BDRs from the B3. In such case, we cannot guarantee that we or our founding shareholder will make a public offering for the acquisition of our BDRs or our underlying Class A ordinary shares on terms and conditions that meet the expectations of the BDR holders, who in any case will not be able to prevent us from deregistering from the CVM and delisting our BDRs from the B3.

Holders of BDRs may be subject to additional risks related to holding BDRs rather than Class A ordinary shares.

Because holders of BDRs do not hold their Class A ordinary shares directly, they are subject to the following additional risks, among others:

a holder of BDRs will not be treated as a direct holder of Class A ordinary shares and may not be able to exercise shareholder rights;

dividends on the Class A ordinary shares represented by the BDRs will be paid to the BDR Depositary, and before the BDR Depositary makes a distribution to a holder on behalf of the BDRs, withholding taxes or other governmental charges, if any, that must be paid, will be deducted;

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we and the BDR Depositary may amend or terminate the Deposit Agreement without the consent of holders of the BDRs in a manner that could prejudice holders of BDRs or that could affect their ability to transfer BDRs, among others; and

the BDR Depositary may take other actions inconsistent with the best interests of holders of BDRs.

As a foreign private issuer and an emerging growth company, we have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.

As a foreign private issuer and emerging growth company, we may be subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer, in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Cayman Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants. However, Cayman Islands laws and regulations applicable to Cayman Islands companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time.

Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although we will be subject to Cayman Islands laws and regulations having substantially the same effect as Regulation Fair Disclosure. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Cayman Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies. Under this act, as an emerging growth company, we will not be subject to the same disclosure and financial reporting requirements as non-emerging growth companies. For example, as an emerging growth company, we are permitted to, and intend to take advantage of, certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. In addition, we will not have to comply with future audit rules promulgated by the U.S. Public Company Accounting Oversight Board, or the “PCAOB,” (unless the SEC determines otherwise) and our auditors will not need to attest to our internal controls under Section 404(b) of the Sarbanes-Oxley Act. We may follow these reporting exemptions until we are no longer an emerging growth company. As a result, our shareholders may not have access to certain information that they deem important. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual revenue of at least US$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates exceeds US$700 million as of the prior June 30, and (2) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company. We could be an “emerging growth company” for up to five years, although circumstances could cause us to lose that status earlier.

Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. We currently prepare our financial statements in accordance with IFRS. We will not be required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as our financial statements are prepared in accordance with IFRS as issued by the IASB.

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We cannot predict if investors will find our Class A ordinary shares less attractive because we will rely on these exemptions. If some investors find our Class A ordinary shares less attractive as a result, there may be a less active and more volatile trading market for our Class A ordinary shares.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur additional legal, accounting and other expenses.

In order to maintain our current status as a foreign private issuer, either (a) more than 50% of the voting power of all our outstanding classes of voting securities (on a combined basis) must be either directly or indirectly owned of record by non-residents of the United States or (b)(1) a majority of our executive officers or directors must not be U.S. citizens or residents; (2) more than 50% of our assets cannot be located in the United States; and (3) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq/NYSE rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.

As a foreign private issuer, we rely on exemptions from certain Nasdaq/NYSE corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors. This may afford less protection to holders of our Class A ordinary shares or to holders of our BDRs.

Nasdaq/NYSE rules require listed companies to have, among other things, a majority of their board members be independent, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, we are permitted to follow, and we do follow, home country practice in lieu of the above requirements. See “Description of Share Capital—Principal Differences between Cayman Islands and U.S. Corporate Law.”

We are a “controlled company” within the meaning of the Nasdaq/NYSE listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.

Upon the completion of this offering, David Vélez Osorno will continue to control a majority of the voting power of our shares. As a result, we will be a “controlled company” within the meaning of the Nasdaq/NYSE listing standards. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the Nasdaq/NYSE, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (3) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. Following this offering, we intend to rely on some or all of these exemptions. As a result, we do not have a stand-alone nominating and corporate governance committee, and our Leadership Development, Diversity and Compensation Committee is not required to consist entirely of independent directors. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq/NYSE.

Our Memorandum and Articles of Association will designate the Grand Court of the Cayman Islands as the exclusive forum for substantially all disputes between us and our shareholders, and the federal district courts of the United States as the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act, which could limit our shareholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.

Our Memorandum and Articles of Association, which will become effective immediately prior to the completion of this offering, will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought

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on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or any other person, (iii) any action or proceeding arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the Companies Act, our Memorandum and Articles of Association, or any other provision of applicable law, (iv) any action or proceeding seeking to interpret, apply, enforce or determine the validity of our Memorandum and Articles of Association or (v) any action or proceeding as to which the Companies Act confers jurisdiction on the Grand Court of the Cayman Islands shall be the Grand Court of the Cayman Islands, in all cases subject to the court having jurisdiction over indispensable parties named as defendants. Our Memorandum and Articles of Association will also provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action under the Securities Act. Nothing in our Memorandum and Articles of Association will preclude shareholders that assert claims under the Exchange Act from bringing such claims in any court, subject to applicable law. Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to these provisions. These exclusive forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. The enforceability of similar choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. For example, in December 2018, the Court of Chancery of the State of Delaware determined that a provision stating that federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable. Although this decision was reversed by the Delaware Supreme Court in March 2020, courts in other states may still find these provisions to be inapplicable or unenforceable. If a court were to find the exclusive forum provisions in our Memorandum and Articles of Association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could adversely affect our results of operations.

We are a Cayman Islands exempted company with limited liability. The rights of our shareholders, including with respect to fiduciary duties and corporate opportunities, may be different from the rights of shareholders governed by the laws of U.S. jurisdictions.

We are a Cayman Islands exempted company with limited liability. Our corporate affairs are governed by our Memorandum and Articles of Association and by the laws of the Cayman Islands. The rights of our shareholders and the responsibilities of members of our board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not properly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Our Memorandum and Articles of Association have varied this last obligation by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq/NYSE, and unless (x) disqualified by the chairman of the relevant meeting or (y) such interest is material, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its shareholders (made up of two components) and the director’s duties prohibit self-dealing by a director and mandate that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. See “Description of Share Capital—Principal Differences between Cayman Islands and U.S. Corporate Law.”

Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company.

Our corporate affairs are governed by our Memorandum and Articles of Association, by the Companies Act (as amended) of the Cayman Islands, or the “Companies Act,” and the common law of the Cayman Islands. The rights of our shareholders to take action against our directors, actions by minority shareholders and the fiduciary

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responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a significantly less exhaustive body of securities laws than the United States. In addition, some U.S. states, such as Delaware, have more fulsome and judicially interpreted bodies of corporate law than the Cayman Islands.

Specifically, subject to limited exceptions, under Cayman Islands’ law, a minority shareholder may not bring a derivative action against the board of directors. Class actions are not recognized in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings, which are similar. Further, while Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a court sanctioned reorganization (by way of a scheme of arrangement). This may make it more difficult for you to assess the value of any consideration you may receive in a corporate reorganization (approved by way of a scheme of arrangement) or to require that the acquirer gives you additional consideration if you believe the consideration offered is insufficient. However, the Companies Act does provide a mechanism for a dissenting shareholder in a statutory merger or consolidation to apply to the Grand Court of the Cayman Islands for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on the fair value of such shares within the time limits prescribed by the Companies Act.

In addition, shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Memorandum and Articles of Association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain information needed to establish any facts necessary for a shareholder motion.

United States civil liabilities and certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, certain of our directors and officers are nationals and residents of countries other than the United States, and a substantial portion of the assets of these persons is located outside of the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. It may also be difficult to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors who are not resident in the United States and the substantial majority of whose assets are located outside of the United States.

Further, it is unclear if original actions predicated on civil liabilities based solely upon U.S. federal securities laws are enforceable in courts outside the United States, including in the Cayman Islands and Brazil. Courts of the Cayman Islands may not, in an original action in the Cayman Islands, recognize or enforce judgments of U.S. courts predicated upon the civil liability provisions of the securities laws of the United States or any state of the United States on the grounds that such provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final and conclusive and for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and was not obtained by fraud or in a manner which is contrary to the public policy of the Cayman Islands. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere.

Judgments of Brazilian courts to enforce our obligations with respect to our Class A ordinary shares or BDRs may be payable only in reais.

Most of our assets are located in Brazil. If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of our Class A ordinary shares or BDRs, we may not be required to discharge our obligations

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in a currency other than the real. Under Brazilian exchange control laws, an obligation in Brazil to pay amounts denominated in a currency other than the real may only be satisfied in Brazilian currency at the exchange rate, typically as determined by the Central Bank of Brazil, in effect on the date the judgment is obtained, and such amounts are then typically adjusted to reflect exchange rate variations and monetary restatements through the effective payment date. The then-prevailing exchange rate may not afford non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under the Class A ordinary shares or BDRs.

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Special Note Regarding Forward-Looking Statements

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this prospectus include statements about:

general economic, financial, political, demographic and business conditions in Brazil, Mexico and Colombia, as well as any other countries we may serve in the future and their impact on our business;

fluctuations in interest, inflation and exchange rates in Brazil, Mexico and Colombia and any other countries we may serve in the future;

our ability to timely and efficiently implement any measures that are necessary to combat or reduce the impacts of the COVID-19 pandemic on our business, results of operations, cash flow, prospects, liquidity and financial condition;

competition in the consumer technology and financial services industry;

our ability to implement our business strategy;

our ability to adapt to the rapid pace of technological changes in the sectors in which we operate;

the reliability, performance, functionality and quality of our products and services, reliability and performance of our suitability, risk management and business continuity policies and processes;

the availability of government authorizations on terms and conditions and within periods acceptable to us;

our ability to continue attracting and retaining new appropriately-skilled employees;

our capitalization and level of indebtedness;

the interests of our founding shareholder;

our ability to manage our growth effectively;

our ability to successfully expand in Latin America and other new markets;

changes in government regulations applicable to the financial services industry in Brazil, Mexico, Colombia and elsewhere;

our ability to compete and conduct our business in the future;

our ability to maintain, protect and enhance our brand and intellectual property;

the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors;

changes in consumer demands regarding the products and services we offer, and our ability to innovate to respond to such changes;

changes in labor, distribution and other operating costs;

our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us;

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the size of our addressable markets, market share and market trends;

other factors that may affect our financial condition, liquidity and results of operations; and

other risk factors discussed under “Risk Factors.”

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot guarantee that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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Presentation of Financial and Other Information

All references to “U.S. dollars,” “dollars,” or “US$” are to the U.S. dollar. All references to “IFRS” are to International Financial Reporting Standards, as issued by the IASB.

Financial Statements

Nu, the company whose Class A ordinary shares and BDRs are being offered in this prospectus, was incorporated in the Cayman Islands on February 26, 2016 as an exempted company incorporated with limited liability.

We maintain our books and records in U.S. dollars, the presentation currency for our financial statements and also our functional currency. The financial statements of each of our subsidiaries are maintained using the relevant functional currency for such subsidiary, which we determine is the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. The functional currency of our Brazilian, Mexican and Colombian operating entities, respectively, is the Brazilian real, the Mexican peso and the Colombian peso. See note 2.a to our audited consolidated financial statements (as defined below), included elsewhere in this prospectus, for more information about our and our subsidiaries’ functional currencies.

Our unaudited condensed consolidated interim financial statements were prepared in accordance with IAS 34 and our consolidated financial statements were prepared in accordance with IFRS, as issued by the IASB. Unless otherwise noted, our consolidated statement of financial position data presented herein as of March 31, 2021 and as of December 31, 2020, 2019 and 2018 and the consolidated statements of profit or loss for the three months ended March 31, 2021 and 2020 and for the years ended December 31, 2020, 2019 and 2018 is stated in U.S. dollars, our reporting currency. Our consolidated financial information contained in this prospectus is derived from our unaudited condensed consolidated interim financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 and our audited consolidated financial statements as of December 31, 2020, 2019 and 2018, together with the notes thereto.

This financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus.

Our fiscal year ends on December 31. References in this prospectus to a fiscal year, such as “fiscal year 2020,” relate to our fiscal year ended on December 31 of that calendar year.

Special Note Regarding Non-IFRS Financial Measures

Adjusted Net Income (Loss)

Adjusted Net Income (Loss) is prepared and presented to eliminate the effect of items from profit (loss) that we do not consider indicative of our core operating performance within the period presented. We define Adjusted Net Income (Loss) as profit (loss) for the year/period, adjusted for expenses related to share-based compensation in such year/period and finance costs related to results with convertible instruments in such period.

Adjusted Net Income (Loss) is presented because our management believes that this non-IFRS financial measure can provide useful information to investors, securities analysts and the public in their review of our operating and financial performance, although it is not calculated in accordance with IFRS or any other generally accepted accounting principles and should not be considered as a measure of performance in isolation. We also use

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Adjusted Net Income (Loss) as a key profitability measure to assess the performance of our business. We believe Adjusted Net Income (Loss) is useful to evaluate our operating and financial performance for the following reasons:

Adjusted Net Income (Loss) is widely used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company and from period to period, depending on their accounting and tax methods, the book value and the market value of their assets and liabilities, and the method by which their assets were acquired;

Non-cash equity grants made to executives, employees or consultants at a certain price and point in time do not necessarily reflect how our business is performing at any particular time and the related expenses (and their subject impacts in the market value of our assets and liabilities) are not key measures of our core operating performance; and

Finance costs with convertible instruments include fair value adjustments relating to the embedded derivative conversion feature, which are based upon subjective assumptions and do not reflect the cash cost of our convertible debt, and do not directly reflect how our business is performing at any particular time and the related expense adjustment amounts are not key measures of our core operating performance.

Adjusted Net Income (Loss) is not a substitute for profit (loss) for the period, which is the IFRS measure of earnings. Additionally, our calculation of Adjusted Net Income (Loss) may be different from the calculation used by other companies, including our competitors in the technology and financial services industries, because other companies may not calculate these measures in the same manner as we do, and therefore, our measure may not be comparable to those of other companies. A reconciliation of our Adjusted Net Income (Loss) to its most directly comparable measure of income (loss) can be found in “Summary Consolidated Financial and Other Data—Non-IFRS Financial Measures and Reconciliations.”

FX Neutral Measures

FX Neutral measures are prepared and presented to eliminate the effect of foreign exchange, or “FX,” volatility between the comparison periods, allowing management and investors to evaluate our financial performance despite variations in foreign currency exchange rates, which may not be indicative of our core operating results and business outlook.

FX Neutral measures are presented because our management believes that these non-IFRS financial measures can provide useful information to investors, securities analysts and the public in their review of our operating and financial performance, although they are not calculated in accordance with IFRS or any other generally accepted accounting principles and should not be considered as a measure of performance in isolation.

FX Neutral measures for revenue, gross profit, profit (loss), Adjusted Net Income (Loss) and certain other key business metrics presented in this prospectus were calculated by multiplying the as reported amounts for these key business metrics for the three months ended March 31, 2020, and for the years ended December 31, 2020, 2019 and 2018 by the average Brazilian real/U.S. dollars exchange rates for the three months ended March 31, 2020 (R$4.654 to US$1.00) and for the years ended December 31, 2020, 2019 and 2018 (R$5.240, R$3.952, R$3.681, to US$1.00, respectively), and using such results to re-translate the corresponding amounts back to U.S. dollars by dividing them by the average Brazilian real/U.S. dollars exchange rates for the three months ended March 31, 2021 (R$5.570 to US$1.00) so as to present what certain of our statement of profit and loss amounts and key business metrics would have been had exchange rates remained stable from these past periods/years until the three months ended March 31, 2021. The average Brazilian real/U.S. dollars exchange rates were calculated as the average of the month-end rates for each month in the three months ended March 31, 2021 and 2020 and of the month-end rates for each month in the years 2020, 2019 and 2018, as reported by Bloomberg.

FX Neutral measures for deposits and interest-earning portfolio presented in this prospectus were calculated by multiplying the as reported amounts as of December 31, 2020, March 31, 2020, December 31, 2019 and December 31, 2018 by the spot Brazilian real/U.S. dollars exchange rates as of these dates (December 31, 2020, March 31, 2020, December 31, 2019 and December 31, 2018 rates of R$5.199, R$5.206, R$4.030, R$3.875, to US$1.00, respectively), and using such results to re-translate the corresponding amounts back to U.S. dollars by dividing them by using the spot rate as of March 31, 2021 (R$5.634 to US$1.00) so as to present what these amounts would have

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been had exchange rates been the same as those on March 31, 2021. The Brazilian real/U.S. dollars exchange rates were calculated using rates as of such dates as reported by Bloomberg.

FX Neutral measures do not include adjustments for any other macroeconomic effect, such as local currency inflation effects, or any price adjustment to compensate for local currency inflation or devaluation. A reconciliation of our FX Neutral measures to the most directly comparable financial measure calculated and presented in accordance with IFRS can be found in “Summary Consolidated Financial and Other Data—Non-IFRS Financial Measures and Reconciliations.”

Market Share and Other Information

This prospectus contains data related to economic conditions in the markets in which we operate. The information contained in this prospectus concerning economic conditions is based on publicly available information from third-party sources that we believe to be reasonable. Market data and certain industry forecast data used in this prospectus were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the U.S. Securities and Exchange Commission website) and industry publications. We obtained the information included in this prospectus relating to the industry in which we operate, as well as the estimates concerning market shares, through internal research, a report dated , 2021 by management consulting company Oliver Wyman Consultoria em Estratégia de Negócios Ltda. commissioned by us, public information and publications on the industry prepared by official public sources, such as the national association of financial and capital markets entities (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais, or “ANBIMA”); the World Bank, the International Monetary Fund, or “IMF,” the Central Bank of Brazil; the Colombian Central Bank; the Central Bank of Mexico; the Inter-American Development Bank; the Brazilian social and economic development bank (Banco Nacional de Desenvolvimento Econômico e Social, or “BNDES”); the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística, or the “IBGE”); the Institute of Applied Economic Research (Instituto de Pesquisa Econômica Aplicada, or “IPEA”), the Superintendence of Private Insurance (Superintendência de Seguros Privados, or “SUSEP”), the Brazilian Securities Commission (Comissão de Valores Mobiliários, or “CVM”); the Colombian National Administrative Department of Statistics (DANE – Departamento Administrativo Nacional de Estadística); the Mexican National Institute of Statistics and Geography (INEGI – Instituto Nacional de Estadística, Geografía e Informática), the Brazilian Micro and Small Business Support Service (Serviço Brasileiro de Apoio às Micro e Pequenas Empresas) or SEBRAE, and the Global System for Mobile Communications; as well as private sources, such as B3, Bloomberg and Forbes, consulting and research companies in the Brazilian financial services industry, a November 2020 report published by Autonomous Research, the Brazilian Economic Institute of Fundação Getulio Vargas (Instituto Brasileiro de Economia da Fundação Getulio Vargas), among others.

Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable, neither we, the selling shareholder, the underwriters, nor their respective affiliates or agents have independently verified it. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. In addition, the data that we compile internally and our estimates have not been verified by an independent source. Except as disclosed in this prospectus, none of the publications, reports or other published industry sources referred to in this prospectus were commissioned by us or prepared at our request. Except as disclosed in this prospectus, we have not sought or obtained the consent of any of these sources to include such market data in this prospectus.

Calculation of Net Promoter Score

Net promoter score, or “NPS,” is a widely known survey methodology that measures the willingness of customers to recommend a company’s products and services. It is used to gauge customers’ overall satisfaction with a company’s products and services and their loyalty to the brand, and it is typically based on customer surveys. NPS measures satisfaction using a scale of zero to 10 based on a customer’s response to the following question: “How likely is it that you would recommend Nu to a friend or colleague?” Responses of nine or 10 are considered “promoters.” Responses of seven or eight are considered neutral. Responses of six or less are considered “detractors.” The NPS, a percentage expressed as a numerical value, is calculated by subtracting the percentage of respondents who are detractors from the percentage who are promoters.

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Rounding

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

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Use of Proceeds

We estimate that the net proceeds to us from the sale of shares of our Class A ordinary shares in the global offering, including in the form of BDRs, will be approximately US$ , based upon the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares of our Class A ordinary shares, including in the form of BDRs, from us is exercised in full, we estimate that the net proceeds to us would be approximately US$ , after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of ordinary shares by the selling shareholders.

Each US$1.00 increase or decrease in the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease the net proceeds that we receive from this offering by approximately US$ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our Class A ordinary shares, including in the form of BDRs, offered by us would increase or decrease the net proceeds that we receive from this offering by approximately US$ , assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

The principal purposes of the global offering are to increase our capitalization and financial flexibility, create a public market for our Class A ordinary shares and BDRs, and enable access to the public equity markets for us and our shareholders.

We intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, we may use a portion of the net proceeds we receive from this offering to acquire or invest in businesses, products, services, or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time. We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering. Accordingly, we will have broad discretion in using these proceeds. Pending the use of proceeds from this offering as described above, we may invest the net proceeds that we receive in this offering in interest-earning instruments.

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Dividend and Dividend Policy

We have never declared or paid any cash dividends on our share capital. Nu has not adopted a dividend policy with respect to future declarations and payment of dividends. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.

Certain Legal Requirements Related to Dividends

Under the Companies Act and our Memorandum and Articles of Association, a Cayman Islands company may pay a dividend out of either its distributable reserves (retained and current profit) or share premium account, but a dividend may not be paid if the company is, or the dividend would result in the company being, unable to pay its debts as they fall due in the ordinary course of business. According to our Memorandum and Articles of Association, dividends can be declared and paid out of funds lawfully available to us, which includes share premium. Dividends, if any, would be paid in proportion to the number of ordinary shares a shareholder holds. For further information, see “Taxation—Cayman Islands Tax Considerations.”

Additionally, please refer to “Risk Factors—Risks Relating to Our Business and Industry—Our holding company structure makes us dependent on the operations of our subsidiaries.” Our ability to pay dividends is directly related to positive and distributable net results from our subsidiaries. We depend on dividend distributions by our subsidiaries, and we may be adversely affected if the performance of our subsidiaries is not positive. If, for any legal reasons due to new laws or bilateral agreements between countries, they are unable to pay dividends to Cayman Islands companies, or if a Cayman Islands company becomes incapable of receiving them, we may not be able to make any dividend payments in the future.

Our Brazilian subsidiaries that are incorporated as a Brazilian corporation (sociedade anônima) are required under Federal Law No. 6,404 dated December 15, 1976, as amended, to distribute a mandatory minimum dividend to shareholders each year, which cannot be lower than a given percentage established in the relevant corporation’s bylaws of its profit for the prior year, which percentage will be considered as 25% in case nothing is said in the bylaws, after 5% the profits are directed to a legal reserve, unless such distribution is suspended by a decision of such subsidiary’s shareholders at its annual shareholders’ meeting based on a report by its board of directors that such distribution would be incompatible with its financial condition at that time. Our Brazilian subsidiaries that are incorporated as a Brazilian limited liability company (sociedade limitada) may also have specific mandatory dividend payment rules pursuant to their bylaws. In addition, if for any legal reasons due to new laws or bilateral agreements between countries, our Brazilian subsidiaries are unable to pay dividends to Cayman Islands companies, or if a Cayman Islands company becomes incapable of receiving them, we may not be able to make any dividend payments in the future.

Our Colombian and Mexican subsidiaries may also face restrictions on their ability to pay dividends under applicable local laws.

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Capitalization

The following table sets forth our total capitalization (defined as borrowings and financing, securitized borrowings, senior preferred shares and total equity), as of March 31, 2021 (in each case, after giving effect to the Share Split) as follows:

on an actual basis as of March 31, 2021;

on a pro forma basis, giving effect to:

the conversion of all senior preferred shares into the same number of preferred shares on May 20, 2021;

the Share Capital Conversion; and

Class A ordinary shares that we expect to issue commencing in August 2021 in connection with the first anniversary of our acquisition of Cognitect upon the satisfaction of certain conditions precedent for the payment of contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees;

on a pro forma as further adjusted basis, giving effect to:

the pro forma adjustments set forth above; and

the sale and issuance by us of Class A ordinary shares in the global offering, including in the form of BDRs, based upon the assumed initial public offering price of US$ per share or R$ per BDR (the midpoint of the range set forth on the cover page of this prospectus), and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with our unaudited condensed consolidated interim financial statements and related notes, and the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

As of March 31, 2021

Actual

Pro forma

Pro forma as

further adjusted (1)

(in US$ millions)

Borrowings and financing(2)

103.2

Securitized borrowings(3)

57.7

Senior preferred shares(4)

342.5

Total equity

803.8

Total capitalization(5)

1,307.2

(1)

Each US$1.00 increase (decrease) in the offering price per Class A ordinary share, including in the form of BDRs, would increase (decrease) our total capitalization and shareholders’ equity by US$ million.

(2)

US$45.0 million of this amount corresponds to guarantees by Nu Holdings and Nu Pagamentos under term loan credit facilities entered into by Nu Servicios.

(3)

For further information regarding our securitized borrowings, which correspond to senior notes issued by FIDC Nu, see note 19.b to our audited consolidated financial statements included elsewhere in this prospectus.

(4)

All our senior preferred shares were converted into the same number of preferred shares on May 20, 2021.

(5)

Total capitalization consists of borrowings and financing, securitized borrowings, senior preferred shares plus total equity.

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In September 2020, our subsidiary Nu Financeira entered into a purchase agreement for the acquisition of 100% of the Easynvest Companies, a direct-to-consumer digital broker in Brazil. We consummated this transaction on June 1, 2021, when control over the entities was transferred after obtaining approval for the acquisition by CADE on October 27, 2020 and the Central Bank of Brazil on May 4, 2021. The aggregate purchase price is composed of US$297 million paid in cash and 7.9 million of our class F-2 preferred shares. In addition, certain executives of the Easynvest Companies acquired an additional 159,981 Series F-2 preferred shares from Nu Holdings on June 1, 2021. The number of shares in this paragraph does not give effect to the Share Split or the Share Capital Conversion.

The above discussion and table are based on ordinary shares outstanding as of March 31, 2021 (after giving effect to the Share Capital Conversion and the Share Split) and includes: (i) Class A ordinary shares that we expect to issue commencing in August 2021 in connection with the first anniversary of our acquisition of Cognitect as contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees, (ii) the conversion of the senior preferred shares into preferred shares and (iii) the issuance of an aggregate of Class A ordinary shares pursuant to the achievement of the Award First Milestone and Award Second Milestone under the Contingent Share Awards, as described in “Executive Compensation—Contingent Share Awards.” This number excludes:

Class A ordinary shares that are expected to be issued as contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees, payable in equal installments over a four year period commencing in August 2021, subject to the satisfaction of certain conditions precedent;

Class A ordinary shares issuable upon the exercise of options to purchase Class A ordinary shares outstanding as of March 31, 2021, with a weighted-average exercise price of US$ per share;

Class A ordinary shares subject to RSUs granted prior to March 31, 2021 that remain subject to performance and service conditions; and

Class A ordinary shares reserved for future issuance under our SOP; and

Class A ordinary shares reserved for future issuance under our Omnibus Incentive Plan.

Other than as set forth above, there have been no material changes to our capitalization since March 31, 2021.

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Dilution

As of March 31, 2021, we had a net tangible book value of US$790.8 million, corresponding to a net tangible book value per share of US$ (based on the sum of our ordinary, preferred, senior preferred and management shares after giving effect to the Share Split). Net tangible book per share value represents the amount of our total assets less our total liabilities, excluding goodwill and other intangible assets, divided by , the total number of our shares outstanding at March 31, 2021, after giving effect to the Share Split.

As of March 31, 2021, we had an adjusted net tangible book value per share of US$ , after giving effect to (i) the Share Split and the Share Capital Conversion and (ii) the issuance of Class A ordinary shares pursuant to the achievement of the First Milestone and Second Milestone under the Contingent Share Awards. Adjusted net tangible book value per share represents the amount of our total assets, less total liabilities, excluding goodwill and other intangible assets, divided by , the total number of shares outstanding at March 31, 2021, after giving effect to the items described above.

After giving effect to (i) the items described above in calculating adjusted net tangible book value per share and (ii) the sale by us of shares of our Class A ordinary shares, including in the form of BDRs, in this offering at the assumed initial public offering price of US$ per share (or R$ per BDR), which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2021 would have been US$ , or US$ per share. This represents an immediate increase in net tangible book value of US$ per share to our existing shareholders and an immediate dilution in net tangible book value of US$ per share to investors purchasing Class A ordinary shares, including in the form of BDRs, in this offering at the assumed initial public offering price. Dilution for this purpose represents the difference between the price per Class A ordinary shares paid by these purchasers and net tangible book value per Class A ordinary share immediately after the completion of the offering.

If you invest in our Class A ordinary shares in this offering or BDRs, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A ordinary shares and the pro forma as adjusted net tangible book value per share of our Class A ordinary shares immediately after this offering.

Because our Class A ordinary shares and Class B ordinary shares have the same dividend and other rights, except for voting, preemption, conversion rights and certain consent rights, we have counted the Class A ordinary shares, including in the form of BDRs, and Class B ordinary shares equally for purposes of the dilution calculations below.

The following table illustrates this dilution to new investors purchasing Class A ordinary shares, including in the form of BDRs, in this offering:

Assumed initial public offering price per share	US$
As adjusted net tangible book value per share as of March 31, 2021	US$
Increase in net tangible book value per share attributable to new investors purchasing Class A ordinary shares in this offering	US$
Pro forma as adjusted net tangible book value per share immediately after this offering	US$
Dilution per Class A ordinary share to new investors in this offering	US$

Each US$1.00 increase or decrease in the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share to new investors by US$ , and would increase or decrease, as applicable, dilution per share to new investors purchasing Class A ordinary shares, including in the form of BDRs, in this offering by US$ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of Class A ordinary shares, including in the form of BDRs, offered by us would increase or decrease, as applicable, our pro forma as adjusted net tangible book value by approximately US$ per share and increase or decrease, as applicable, the dilution to new investors purchasing Class A ordinary shares, including in the form of BDRs, in this offering by US$ per share, assuming the assumed initial

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public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters’ option to purchase additional Class A ordinary shares, including in the form of BDRs, from us is exercised in full, the pro forma as adjusted net tangible book value per share of our ordinary shares, as adjusted to give effect to this offering, would be US$ per share, and the dilution in pro forma net tangible book value per share to new investors purchasing Class A ordinary shares, including in the form of BDRs, in this offering would be US$ per share.

The following table summarizes, on the same pro forma as adjusted basis as of March 31, 2021, the differences between the existing shareholders and the new investors purchasing Class A ordinary shares in this offering, including in the form of BDRs, with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of our Class A ordinary shares, including in the form of BDRs, and the average price per share paid or to be paid to us at the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

Shares Purchased

Total Consideration

Average Price

Number

Percent

Amount

Percentage

Per Share

Existing shareholders

US$

New investors

US$

Total

100

US$

100

US$

Each US$1.00 increase or decrease in the assumed initial public offering price of US$ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all shareholders by US$ million, assuming that the number of Class A ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of Class A ordinary shares, including in the form of BDRs, offered by us would increase or decrease the total consideration paid by new investors and total consideration paid by all shareholders by US$ , assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional Class A ordinary shares from us, including in the form of BDRs. If the underwriters’ option to purchase additional Class A ordinary shares, including in the form of BDRs, were exercised in full, our existing shareholders would own % and our new investors would own % of the total number of Class A ordinary shares, including in the form of BDRs, outstanding upon completion of this offering.

To the extent that any outstanding options to purchase our Class A ordinary shares under our equity compensation plans are exercised, RSUs are settled, or new awards are granted under our equity compensation plans, there will be further dilution to investors participating in this offering.

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Exchange Rates

While we maintain our books and records in U.S. dollars, the presentation currency for our financial statements and also our functional currency, as a holding company, our material assets are our direct and indirect equity interests in our subsidiaries, and we are therefore dependent upon the results of operations of our subsidiaries, which are denominated primarily in the local currencies of the Latin American countries in which we operate, and as such our consolidated results of operations may be affected by changes in the local exchange rates to the U.S. dollar. We have significant operations in Brazil, Mexico and Colombia. The exchange rates discussed in this section have been obtained from each country’s central bank. However, in most cases, for consolidation purposes, we use a foreign currency to U.S. dollar exchange rate provided by Bloomberg that differs slightly from that reported by the aforementioned central banks. For more information, see “Risk Factors— Risks Relating to Our Business and Industry—Our holding company structure makes us dependent on the operations of our subsidiaries” and “Risk Factors—Risks Relating to the Countries in Which We Operate—Exchange rate instability may have a material adverse effect on the economies of the countries in which we operate and the price of our Class A ordinary shares and BDRs” and “Presentation of Financial and Other Information—Financial Statements.”

Brazil

The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.

The real depreciated against the U.S. dollar from mid-2011 to early 2016, and again from early 2018 to 2020. In particular, during 2015, due to the poor economic conditions in Brazil, including as a result of political instability, the real depreciated at a rate that was much higher than in previous years, and a similar trend occurred during 2018 and 2019. Overall in 2015, the real depreciated 47.0%, reaching R$3.905 per US$1.00 on December 31, 2015. In 2016, the real fluctuated significantly, appreciating 16.5% to R$3.259 per US$1.00 on December 31, 2016. In 2017, the real depreciated 1.5% against the U.S. dollar, ending the year at an exchange rate of R$3.307 per US$1.00. In 2018, the real depreciated 17.1% against the U.S. dollar, ending the year at an exchange rate of R$3.874 per US$1.00 mainly due to lower interest rates in Brazil as well as uncertainty regarding the results of the Brazilian presidential elections, which were held in October 2018. In 2019, the real depreciated 4.0% against the U.S. dollar. The real/U.S. dollar exchange rate reported by the Central Bank of Brazil was R$5.197 per US$1.00 on December 31, 2020, which reflected a 22.4% depreciation in the real against the U.S. dollar during 2020. The real/U.S. dollar exchange rate reported by the Central Bank of Brazil was R$5.697 per US$1.00 on March 31, 2021, which reflected a 9.6% depreciation in the real against the U.S. dollar since December 31, 2020. There can be no assurance that the real will not depreciate or appreciate further against the U.S. dollar.

The Central Bank of Brazil has previously intervened in the foreign exchange market to attempt to control instability in foreign exchange rates. We cannot predict whether the Central Bank of Brazil or the Brazilian government will continue to allow the real to float freely or to what extent it will intervene in the exchange rate market by re-implementing a currency band system or otherwise. The real may depreciate or appreciate substantially against the U.S. dollar in the future. Furthermore, Brazilian law provides that, whenever there is a serious imbalance in Brazil’s balance of payments or there are serious reasons to foresee a serious imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. We cannot guarantee that the Brazilian government will not place restrictions on remittances of foreign capital abroad in the future.

The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Brazilian reais per U.S. dollar. The average rate is calculated by using the average of reported exchange rates by the Central Bank of Brazil on each business day during a monthly period and on the last day of each month during an annual period, as applicable. As of July 30, 2021, the exchange rate for the purchase of U.S. dollars as reported by the Central Bank of Brazil was R$5.122 per US$1.00.

Year	Year-end		Average(1)		Low(2)		High(3)
2016		3.259		3.483		3.119		4.156
2017		3.307		3.193		3.051		3.381
2018		3.875		3.656		3.139		4.188
2019		4.031		3.946		3.651		4.259
2020		5.197		5.158		4.021		5.937

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Source: Central Bank of Brazil.

(1)

Represents the average of the exchange rates on the closing of each business day during the year.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the year.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the year.

Month	Period-end		Average(1)		Low(2)		High(3)
March 2021		5.697		5.646		5.495		5.840
April 2021		5.404		5.562		5.366		5.706
May 2021		5.232		5.291		5.222		5.451
June 2021		5.002		5.033		4.921		5.164
July 2021		5.122		5.157		5.066		5.259

Source: Central Bank of Brazil.

(1)

Represents the average of the exchange rates on the closing of each business day during the month.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the month.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the month.

Mexico

For the last few years, the Mexican government has maintained a policy of non-intervention in the foreign exchange markets, other than conducting periodic auctions for the purchase of U.S. dollars, and has not had in effect any exchange controls (although these controls have existed and have been in effect in the past). We cannot guarantee that the Mexican government will maintain its current policies with regard to the Mexican peso or that the Mexican peso will not further depreciate or appreciate significantly in the future.

The following table sets forth, for the periods indicated, the high, low, average and period-end free-market exchange rates for the purchase of U.S. dollars, expressed in nominal Mexican pesos per U.S. dollar, as reported by the Central Bank of Mexico in the Federal Official Gazette. All amounts are stated in Mexican pesos per U.S. dollar. The annual and interim average rates reflect the average of month-end rates, and monthly average rates reflect the average of daily rates.

Year	Year-end		Average(1)		Low(2)		High(3)
2016		20.664		18.675		17.177		21.051
2017		19.935		18.929		17.494		21.908
2018		19.683		19.238		17.979		20.716
2019		18.845		19.262		18.772		20.125
2020		19.949		21.496		18.571		25.119

Source: Central Bank of Mexico.

(1)

Represents the average of the exchange rates on the closing of each business day during the year.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the year.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the year.

Month	Period-end		Average(1)		Low(2)		High(3)
March 2021		20.605		20.762		20.442		21.418
April 2021		19.971		20.109		19.815		20.603
May 2021		19.949		19.999		19.803		20.224
June 2021		19.803		20.043		19.690		20.700
July 2021		19.954		19.990		19.816		20.191

Source: Central Bank of Mexico.

(1)

Represents the average of the exchange rates on the closing of each business day during the month.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the month.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the month.

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Colombia

The Colombian government and the Colombian Central Bank have considerable power to determine governmental policies and actions that relate to the Colombian economy and, consequently, to affect the operations and financial performance of businesses. The Colombian government and the Colombian Central Bank may seek to implement additional measures aimed at controlling further fluctuation of the Colombian peso against other currencies and fostering domestic price stability. The Colombian Central Bank and the Colombian Ministry of Finance and Public Credit (Ministerio de Hacienda y Crédito Público, or “MHCP”) have in the past adopted a set of measures intended to tighten monetary policy and control the fluctuation of the Colombian peso against the U.S. dollar. Colombia has a free market for foreign exchange, and the Colombian government allows the Colombian peso to float freely against the U.S. dollar. There can be no assurance that the Colombian government will maintain its current policies with regard to the Colombian peso or that the Colombian peso will not depreciate or appreciate significantly in the future.

The Colombian Central Bank establishes the parameters that must be observed in order to calculate the Representative Market Rate (Tasa Representativa del Mercado); then, the Colombian Financial Superintendency (Superintendencia Financiera de Colombia, or “SFC”) proceeds to compute and certify the Representative Market Rate based on the weighted averages of the buy/sell foreign exchange rates quoted daily by certain financial institutions for the purchase and sale of foreign currency.

The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Colombian pesos per U.S. dollar as certified by the SFC. The rates shown below are in nominal Colombian pesos and have not been restated in constant currency units. The average rate is calculated by using the average of reported exchange rates by the Colombian Central Bank on each business day during a monthly period and on the last day of each month during an annual period, as applicable.

Year	Year-end		Average(1)		Low(2)		High(3)
2016		3,000.71		3,050.98		2,833.78		3,434.89
2017		2,984.00		2,951.32		2,837.90		3,092.65
2018		3,249.75		2,956.43		2,705.34		3,289.69
2019		3,277.14		3,281.09		3,072.01		3,522.48
2020		3,432.50		3,693.36		3,253.89		4,153.91

Source: Colombian Central Bank.

(1)

Represents the average of the exchange rates on the closing of each business day during the year.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the year.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the year.

Month	Period-end		Average(1)		Low(2)		High(3)
March 2021		3,736.91		3,612.77		3,534.62		3,736.91
April 2021		3,712.89		3,650.78		3,595.57		3,717.46
May 2021		3,715.28		3,735.67		3,655.74		3,846.28
June 2021		3,756.67		3,685.04		3,588.41		3,784.45
July 2021		3,836.95		3,832.24		3,748.50		3,918.49

Source: Colombian Central Bank.

(1)

Represents the average of the exchange rates on the closing of each business day during the month.

(2)

Represents the minimum of the exchange rates on the closing of each business day during the month.

(3)

Represents the maximum of the exchange rates on the closing of each business day during the month.

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Selected Consolidated Financial Data

The following tables set forth, for the periods and as of the dates indicated, our selected consolidated financial data. Our historical results are not necessarily indicative of the results that may be expected in the future. The following selected consolidated financial data should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The selected interim statement of financial position as of March 31, 2021 and the selected interim statement of profit or loss for the three months ended March 31, 2021 and 2020 have been derived from our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus, prepared in accordance with IAS 34. The selected statements of financial position as of December 31, 2020, 2019 and 2018 and the selected statements of profit or loss for the years ended December 31, 2020, 2019 and 2018 have been derived from our audited consolidated financial statements included elsewhere in this prospectus, prepared in accordance with IFRS, as issued by the IASB. Our results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the entire year ending December 31, 2021 or any other period. Share and per share data in the table below has been retroactively adjusted to give effect to the Share Split.

Statement of Profit or Loss Data

	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
	(in US$ millions, except share data and amounts per share)
Interest income and gain (losses) on financial instruments		127.3			131.3			382.9			337.9			161.6
Fee and commission income		117.7			84.9			354.2			274.2			157.3
Total revenue		245.1			216.2			737.1			612.1			318.9
Interest and other financial expenses		(31.7	)		(33.2	)		(113.9	)		(109.7	)		(45.4	)
Transactional expenses		(26.3	)		(33.2	)		(126.8	)		(79.3	)		(43.2	)
Credit loss allowance expenses		(71.3	)		(61.8	)		(169.5	)		(175.2	)		(118.6	)
Total cost of financial and transactional services provided		(129.3	)		(128.2	)		(410.2	)		(364.2	)		(207.2	)
Gross profit		115.7			88.0			326.9			247.9			111.7
Operating expenses
Customer support and operations		(32.1	)		(40.1	)		(124.0	)		(115.6	)		(46.7	)
General and administrative expenses		(115.9	)		(70.6	)		(266.0	)		(199.9	)		(84.7	)
Marketing expenses		(4.9	)		(6.1	)		(19.4	)		(41.8	)		(6.4	)
Other income (expenses)		(16.2	)		(17.7	)		(9.5	)		(19.9	)		(7.3	)
Total operating expenses		(169.1	)		(134.5	)		(418.9	)		(377.2	)		(145.1	)
Finance costs – results with convertible instruments		—			—			(101.2	)		—			—
Loss before income taxes		(53.4	)		(46.5	)		(193.2	)		(129.3	)		(33.4	)
Income taxes
Current taxes		(31.5	)		(6.3	)		(22.3	)		(3.6	)		(15.5	)
Deferred taxes		35.4			19.4			44.0			40.3			20.3
Total income taxes		3.9			13.1			21.7			36.8			4.8
Loss for the period / year		(49.5	)		(33.4	)		(171.5	)		(92.5	)		(28.6	)

Earnings per share:
Basic and diluted earnings (loss) per share (US$)
Weighted average number of outstanding shares – basic and diluted (in thousands of shares) (US$)

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Statement of Financial Position Data

	As of March 31,			As of December 31,
	2021			2020			2019			2018
	(US$ millions)
Assets
Cash and cash equivalents		2,200.7			2,343.8			1,246.6			379.2
Financial assets at fair value through profit or loss		4,405.6			4,378.2			2,400.7			655.5
Securities		4,356.5			4,287.3			2,237.7			570.2
Derivative financial instruments		—			0.1			0.2			—
Collateral for credit card operations		49.1			90.7			162.8			85.3
Financial assets at amortized cost		3,172.3			3,150.0			2,923.6			1,652.7
Compulsory deposits at central banks		98.7			43.5			—			—
Credit card receivables		2,787.8			2,908.9			2,786.5			1,623.8
Loans to customers		264.5			174.7			58.0			—
Interbank transactions		1.4			—			0.1			—
Other financial assets at amortized cost		19.9			22.9			79.0			28.9
Other assets		133.0			123.3			67.9			36.0
Deferred tax assets		178.5			125.1			94.2			55.2
Right-of-use assets		9.0			10.7			17.2			—
Property, plant and equipment		9.0			9.9			8.7			6.7
Intangible assets		12.2			12.4			1.1			0.5
Goodwill		0.8			0.8			—			—
Total assets		10,121.1			10,154.2			6,760.0			2,785.8

Liabilities
Financial liabilities at fair value through profit or loss		110.8			90.8			24.1			—
Derivative financial instruments		62.2			75.3			2.0			—
Instruments eligible as capital		13.1			15.5			22.1			—
Repurchase agreements		35.5			—			—			—
Financial liabilities at amortized cost		8,947.6			9,421.7			5,973.0			2,420.0
Deposits		5,461.7			5,584.9			2,693.2			628.7
Payables to credit card network		2,982.5			3,331.3			2,976.5			1,675.9
Borrowings and financing		103.2			97.4			133.4			50.7
Securitized borrowings		57.7			79.7			169.9			64.7
Senior preferred shares		342.5			328.4			—			—
Salaries, allowances and social security contributions		35.7			25.8			11.2			5.5
Tax liabilities		40.2			30.8			12.4			17.1
Lease liabilities		10.2			12.0			18.7			—
Provision for lawsuits and administrative proceedings		15.5			16.5			21.0			14.3
Deferred income		26.3			26.0			21.2			10.8
Deferred tax liabilities		38.1			8.7			0.7			—
Other liabilities		92.9			83.8			65.5			21.4
Total liabilities		9,317.3			9,716.1			6,147.8			2,489.1

Equity
Share capital		—			—			—			—
Share premium reserve		1,038.4			638.0			631.2			389.4
Accumulated gains (losses)		(117.3	)		(102.4	)		28.2			(58.0	)
Other comprehensive income/loss		(117.3	)		(97.5	)		(47.2	)		(34.7	)
Total equity		803.8			438.1			612.2			296.7
Total liabilities and equity		10,121.0			10,152.2			6,760.0			2,785.8

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Management’s Discussion and Analysis of Financial Condition
and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020, and our audited consolidated financial statements as of December 31, 2020, 2019 and 2018 and for the years ended December 31, 2020, 2019 and 2018 and the notes thereto, included elsewhere in this prospectus, as well as the information presented under “Presentation of Financial and Other Information,” “Summary Consolidated Financial and Other Data” and “Selected Consolidated Financial Data.”

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those expressed or implied in such forward-looking statements as a result of various factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.”

Overview

Welcome to Nu

Nu is the largest digital banking platform in the world, outside of Asia, and one of the leading technology companies in the world, with 36.9 million customers across Brazil, Mexico, and Colombia as of March 31, 2021. We built our business based on four core principles: (1) a highly curated customer-centric culture and approach that permeates everything we do; (2) the prioritization of human-centric design across all of our mobile-apps, products, services and interactions to create superior customer experiences; (3) the development of advanced proprietary technologies built from the ground up by some of the best talent from around the world; and (4) the utilization and optimization of powerful data science and proprietary models that support every aspect of our business. We combine these to create a self-reinforcing business model that we believe enables us to serve our ecosystem of customers and partners more effectively as we grow, and to generate significant and sustainable competitive advantages in the marketplace.

We offer a growing suite of financial technology solutions designed to create superior client experiences across the five financial seasons of a consumer or SME customer’s journey. These include (1) Spending with our credit and debit cards, QR code-based and PIX instant mobile payments solutions, WhatsApp Pay and traditional wire transfers; (2) Saving with our NuConta personal and business accounts; (3) Investing with our direct-to-consumer NuInvest digital investment platform; (4) Borrowing with our transparent, easy-to-manage credit cards and personal loans with limits that grow over time as users build their credit histories with us; and (5) Protecting with our NuSeguros insurance solutions. We have also broadened our ecosystem by adding products and services from marketplace partners to our platform, such as insurance, mobile phone top ups, and foreign remittances, all under the Nu brand and with the same customer experience as with our proprietary products.

As of March 31, 2021, we served a broad customer base of over 36.3 million individual consumers and over 600,000 small and medium-sized enterprises, or “SMEs.” Our consumer base is well diversified across various

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demographic measures, such as income and geographical dispersion, and relatively in line with the overall adult populations of our markets, although we believe our customers are generally younger than those of incumbent financial institutions.

In the three months ended March 31, 2021, we reported revenue of US$245.1 million, an increase of 13.4% compared to US$216.2 million for the three months ended March 31, 2020 (or an increase of 35.7% compared to US$180.6 million on an FX Neutral basis). In the three months ended March 31, 2021, we reported gross profit of US$115.7 million, an increase of 31.5% compared to US$88.0 million for the three months ended March 31, 2020 (or an increase of 57.4% compared to US$73.5 million on an FX Neutral basis).

In 2020, we reported revenue of US$737.1 million (or US$693.5 million on an FX Neutral basis), an increase of 20.4% compared to US$612.1 million in 2019 (or an increase of 59.7% compared to US$434.3 million on an FX Neutral basis). In 2020, we reported gross profit of US$326.9 million (or US$307.6 million on an FX Neutral basis), an increase of 31.9% compared to US$247.9 million in 2019 (or an increase of 74.9%, compared to US$175.9 million on an FX Neutral basis). On an FX Neutral basis, our revenue and our gross profit in 2020 increased 229% and 317%, respectively, compared to our reported revenue and gross profit in 2018. For more information, see “—Key Business Metrics” and —Results of Operations.”

Our Nu Journey

Prior to our launch, we believe retail financial services providers in Brazil were relatively undifferentiated. Traditional banks offered similar account products, credit limits, interest rates, and annual fees to all customers based on outdated, homogenous underwriting methodologies and customer management strategies. We believe customers in Brazil were paying some of the highest interest rates and fees in the world, and were often ignored and taken for granted, while a large percentage of the generally lowest-income population was simply left out of the banking system. In 2013, our founders saw an opportunity to create a fundamentally different financial services offering which was fully digital and obsessed about the customer experience, utilizing credit cards as a first product. We sought to help our customers make payments more convenient, organize their finances better, and improve their use and control of credit.

A Nu Journey Begins

2013 to 2017: The Launch of a Nu Approach to the Market – Reaching over 3 million customers

Our journey began in 2013 with a small group of engineers and designers. In 2014, we launched our first product, the Nu Credit Card, a purple Mastercard-branded credit card in Brazil. We were a pioneer in offering credit cards that did not have any annual fees and we designed an end-to-end mobile first experience for a brand new best in class customer experience. With this innovation, we launched access to a much broader spectrum of customers – from more affluent and sophisticated card users to those just starting out.

Our strategy was to start with a single product to ensure we delivered a great user experience, delighted our customers, and gained enough insights about the market and our customers to refine and improve our data models. By starting with credit, we believe we tackled one of the most challenging (and larger) areas of financial services earlier in our evolution. This has helped us: (i) earn the trust of a large pool of customers by empowering them with differentiated credit solutions which they may have otherwise found to be low quality, expensive, or inaccessible from other providers; (ii) build a large and growing pool of proprietary data on customers’ financial and transactional behavior; and (iii) create a favorable and highly defensible business position in the market from which we seek to expand.

Scaling the Business to Nu 2.0

2017 to 2018: Growing Beyond Credit Cards – Reaching over 6 million customers

In 2017, we launched our fully digital banking account solution, NuConta, which offered our customers the ability to make deposits, peer-to-peer transfers, and payments free of charge, and withdraw cash across a network of partner ATMs at a nominal fee. We also created a savings feature by paying a fair yield on our customers’ balances at a rate equivalent to 100% of the Brazilian interbank deposit rate. These were revolutionary features when

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compared to the checking account products incumbent banks offered, where customers had to pay a range of fixed account and transaction fees and received a fraction of the yield that we offered.

In 2018, we launched our complementary debit card, making it available free of charge to any customer with a NuConta account, and made it easy to order through our Nu mobile app.

Expanding Our Breadth & Depth to Nu 3.0

2019 to 2021: Expanding to New Products and New Countries – Reaching 37 million customers

In 2019, we launched our personal loan product for people with larger credit needs, allowing our customers to apply, run simulations, check balances, and pay ahead of time, in an easy and transparent manner on our mobile app. Later that year we launched NuConta PJ, our business checking account to help meet the similar needs of the nearly 11 million single entrepreneur-led micro businesses that are estimated as operational in Brazil as of December 31, 2020, according to the Brazilian Micro and Small Business Support Service, or “SEBRAE.” We had over 600,000 SME customers as of March 31, 2021, representing an approximately 2x increase from 250,000 on June 30, 2020.

In 2019 and 2020, we expanded internationally to Mexico and Colombia as we identified customer needs and opportunities in these markets that were similar to those in Brazil. We followed a similar strategy and launched in both countries with our flagship credit card product. In just under two years from launch of our operations in Mexico, we believe we have already become among the top three credit card issuers in Mexico, in terms of the number of cards issued during the three months ended March 31, 2021 based on data for other issuers from Central Bank of Mexico.

In 2020, we began to expand into insurance brokerage and investments (brokerage and asset management). We launched NuVida, a life insurance product seamlessly integrated and distributed through our mobile app in partnership with Chubb, a leading global policy underwriter. NuVida provides basic coverage starting from less than US$1.00 per month for benefits up to approximately US$30,000. We also announced the acquisition of Easynvest, which we believe is the largest direct-to-consumer retail investments platform in Brazil with 1.6 million customers as of March 2021.

In 2021, we re-launched Easynvest under the NuInvest brand with curated features to help our customers invest more easily in the financial markets through our mobile app. We also expanded our product set further with the launch of (i) Ultraviolet, our premium metal credit card for more affluent customers, and (ii) a new online remittance service in collaboration with Remessa Online, which joined our marketplace as a strategic integrated partner.

Our Self-Reinforcing Model

We have reinvented how to attract, serve and retain retail banking customers digitally. Traditional incumbent institutions have large direct marketing budgets to acquire customers. They generate profits by charging high fees and onerous interest rates in order to cover the expenses of legacy operating systems and vast branch networks (according to publicly available data), along with outdated and backwards-looking credit models. In contrast, we believe in the use of data and technology to create a fundamentally different cost structure, which then enables us to offer an incredible customer experience irrespective of income or social class, while at the same time benefiting from strong unit economics.

Our model benefits from low costs across four dimensions:

Low Cost to Acquire – Since our founding in 2013, we have acquired approximately 90% of our clients organically, either through word-of-mouth or a direct unpaid referral from an existing customer without incurring direct marketing expenses. As a result, our customer acquisition costs, or “CAC,” for the three months ended March 31, 2021 was approximately US$4.8 (of which paid marketing accounted for approximately 10%). We believe our CAC is one of the lowest across consumer fintech companies globally based on our internal research and publicly available information. Our CAC consists of the following expenses: printing and shipping of a card, credit data costs, and paid marketing.

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Low Cost to Serve – Our all-digital, cloud-based platform is low cost, highly efficient and scalable. As a result, we believe our operating expenses per customer are approximately 90% lower, on average, than those of incumbent financial institutions in Brazil, based on their publicly available financial statements. These institutions are burdened by their large physical branch networks and thousands of employees required to run them. In Brazil, incumbent banks had, on average, one employee per 1,000 customers (according to publicly available data), more than 12 times less than our ratio of customers per employee, which was one employee per approximately 12,000 as of December 2020. Our cost to serve includes transactional expenses and customer support and operations costs.

Low Cost of Risk – As we have scaled, we have leveraged our growing pool of proprietary data and our Nu^X Credit Engine to underwrite customers more effectively and lower our overall cost of risk. For the 90 days ended March 31, 2021, we had a 90-day credit card delinquency rate of 2.7%, which is defined as the sum of outstanding credit balances with at least one payment past due 90 days, divided by the total credit balance, excluding balances past due 360 days, approximately 35% lower than the Brazilian industry average, according to the Central Bank of Brazil. In the first half of 2020, the beginning of the COVID-19 pandemic, we saw a temporary increase in our delinquency levels, in line with market trends. By the end of 2020, our levels had improved relative to our own pre-COVID-19 delinquency levels.

Low Cost of Funding – As a result of the trust our customers have in us and our growing relevance in our customers’ primary banking relationship we have amassed a large and growing pool of customer deposits since the introduction of NuConta in 2017, which has supported our funding needs and reduced our funding costs over time. As of March 31, 2021, we had US$5.5 billion of deposits, all of which were acquired directly, without the use of third-party brokers or intermediaries. For more information on our definition and measurement of primary banking relationship, see “—Factors Affecting Our Performance—Our ability to increase transactions and expand revenue from existing customers.”

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Deposits Balance (in US$ billions)

Deposits Balance (in US$ billions, FX Neutral)

We earn revenue from two main sources:

Fees and Commissions – The majority of our fee-based revenue comes from interchange fees which we earn when our customers make purchases using our cards in credit or debit purchases. These fees are set by Mastercard and paid by the merchants who accept our cards. As a result, our customers do not pay these fees, and we are able to offer a core credit card with no annual fees. In addition, we earn revenue from customer subscriptions to our loyalty programs, late payment fees, prepaid mobile phone top ups, and commissions from our partners for distribution of certain financial products and services such as investments (brokerage and asset management), insurance and international remittance. For the three months ended March 31, 2021 and the year ended December 31, 2020, fee and commission income represented 48% of total revenue in both periods.

Interest Income and Gains (Losses) on Financial Instruments – We earn interest income from the interest that we charge on revolving and refinanced credit card balances and personal loans, as well as the interest we earn on our cash. We invest our cash primarily in highly liquid government bonds, and we recognize gains or losses related to fair value changes in these instruments. For the three months ended March 31, 2021 and the year ended December 31, 2020, interest income and gain (losses) on financial instruments represented 52% of total revenue in both periods.

As we continue to innovate and introduce new products and features, our mix of revenue will evolve correspondingly. The introduction of NuConta in 2017 and its corresponding debit card in 2018 were important evolutions in our product set and had a noticeable impact across our key business metrics as they allowed us to accelerate our customer growth by servicing a much wider spectrum of the population, including lower income customers who would not have started off with a consumer credit product. Consequently, customers who join us by acquiring only a NuConta account typically generate lower initial revenue than customers who start off with multiple products, such as a credit card and a NuConta account. However, these NuConta-only customers are highly attractive and strategic to us. First, we often become their primary banking account provider and capture a greater share of their overall financial life over time, including through the offering of spending, saving, insurance and investment solutions. Second, as we capture more data about these NuConta-only customers, we progressively feed

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and optimize our segmentation and credit underwriting models, which often leads to the offer of consumer credit, insurance or third-party products, materially increasing their lifetime value while serving them with our low-cost structure.

Key Business Metrics

The following table sets forth our key business metrics as of and for the periods indicated. We review these key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. In addition, these supplemental business metrics are presented to assist investors to better understand our business and how it operates.

	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
Client Activity Metrics:
Number of customers (in millions) (1)		36.9			23.3			33.1			19.9			6.0
Active customers (in millions) (2)		25.5			14.1			21.8			12.1			5.1
Activity rate (3)		69	%		60	%		66	%		61	%		85	%
Purchase volume (in US$ billions) (4)		7.5			5.1			22.5			17.1			9.6
Purchase volume growth (%) (4)		47	%		n.a.			32	%		78	%		n.a.
Purchase volume (FX Neutral) (in US$ billions) (4)		7.5			4.3			21.2			12.1			6.3
Purchase volume growth (FX Neutral) (%) (4)		76	%		n.a.			74	%		91	%		n.a.
Deposits (in US$ billions)		5.5			2.4			5.6			2.7			0.6
Deposits growth (%)		130	%		n.a.			107	%		328	%		n.a.
Deposits (FX Neutral) (in US$ billions) (5)		5.5			2.0			5.2			1.9			0.4
Deposits growth (FX Neutral) (%) (5)		173	%		n.a.			167	%		346	%		n.a.
Interest-earning portfolio (in US$ millions) (6)		631.1			411.1			488.7			404.7			212.1
Interest-earning portfolio growth (%) (6)		54	%		n.a.			21	%		91	%		n.a.
Interest-earning portfolio (FX Neutral) (in US$ millions) (6)		631.1			379.9			450.9			289.6			145.9
Interest-earning portfolio growth (FX Neutral) (%) (6)		66	%		n.a.			56	%		99	%		n.a.
Monthly average revenue per active customer (in US$) (7)		3.5			5.5			3.6			5.9			6.9
Monthly average revenue per active customer (FX Neutral) (in US$) (7)		3.5			4.6			3.4			4.2			4.6
Monthly average cost to serve per active customer (in US$) (8)		0.8			1.9			1.2			1.9			1.9
Monthly average cost to serve per active customer (FX Neutral) (in US$) (8)		0.8			1.6			1.1			1.3			1.3

Company Financial Metrics:
Revenue (in US$ millions)		245.1			216.2			737.1			612.1			318.9
Revenue growth (%)		13	%		n.a.			20	%		92	%		n.a.
Revenue (FX Neutral) (in US$ millions) (9)		245.1			180.6			693.5			434.3			210.8
Revenue growth (FX Neutral)(%) (9)		36	%		n.a.			60	%		106	%		n.a.
Credit loss allowance expenses / credit portfolio (%) (10)		2.2	%		2.6	%		5.1	%		5.7	%		6.7	%
Gross profit (in US$ millions)		115.7			88.0			326.9			247.9			111.7
Gross profit (FX Neutral) (in US$ millions) (11)		115.7			73.5			307.6			175.9			73.8
Gross profit margin (%)		47.2	%		40.7	%		44.3	%		40.5	%		35.0	%

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	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
Loss (in US$ millions)		(49.5	)		(33.4	)		(171.5	)		(92.5	)		(28.6	)
Loss (FX Neutral) (in US$ million) (12)		(49.5	)		(27.9	)		(161.4	)		(65.7	)		(18.9	)
Adjusted Net Income (Loss) (in US$ millions) (13)		(0.6	)		(24.9	)		(14.1	)		(74.0	)		(19.3	)
Adjusted Net Income (Loss) (FX Neutral) (in US$ millions) (13)		(0.6	)		(20.8	)		(13.2	)		(52.5	)		(12.7	)

(1)

Customers are defined as an individual or SME that has opened an account with us and has not been charged-off, or blocked, or has voluntarily closed their account.

(2)

Active customers are defined as any customers that have generated revenue in the last 30 calendar days, for a given measurement period.

(3)

Activity rate is defined as active customers divided by total number of customers as of a specific date.

(4)

(5)

Deposits and deposits growth are presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral Deposits to the IFRS measure of this metric can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

(6)

Interest-earning portfolio consists of receivables from credit card operations on which we are accruing interest and loans to customers, in each case gross of ECL allowance, as of the period end date. Interest-earning portfolio and interest-earning portfolio growth are presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral Interest-earning portfolio to the IFRS measure of this metric can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

(7)

(8)

(9)

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information. A reconciliation of our FX Neutral Revenue to the IFRS measure of this metric can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

(10)

(11)

Gross profit is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral gross profit to the IFRS measure of this metric can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

(12)

Loss is presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our FX Neutral loss to the IFRS measure of this metric can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

(13)

Adjusted Net Income (Loss) is defined as profit (loss) for the year/period, adjusted for expenses related to share-based compensation in such year/period and finance costs related to results with convertible instruments in such year/period. Adjusted Net Income (Loss) is also presented on an FX Neutral basis. See “Presentation of Financial and Other Information—Special Note Regarding Non-IFRS Financial Measures—FX Neutral Measures” for additional information. A reconciliation of our Adjusted Net Income (Loss) and our FX Neutral Adjusted Net Income (Loss) to their most directly comparable IFRS measures of income (loss) can be found below under “Summary Consolidated Financial And Other Data—Non-IFRS Financial Measures and Reconciliations.”

Customers

Our total number of customers is an important measure of the reach and adoption of our products. We define our customers as an individual or SME that has opened an account with us and has not been charged-off, or blocked, or has voluntarily closed their account.

We reached 36.9 million customers as of March 31, 2021, an increase of 58.5% compared to 23.3 million customers as of March 31, 2020, resulting in a net addition of 13.6 million customers over the 12-month period, demonstrating the strength of our self-reinforcing model.

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Total Customers (in millions) and Net Customer Additions (in millions)

Active Customers and Activity Rate

We assess customer engagement and adoption by measuring the number of active customers and the implied activity rate. We define an active customer as any customer that has generated revenue in the last 30 days of the measurement period, and we define activity rate as active customers divided by total number of customers as of a specific date. Our active customers drive the vast majority of our revenue. However, customers that are non-active can and often do still use our products, though less frequently, and do contribute to our revenue. They can also become active from period to period. For more information on our customer engagement ratio, see “—Factors Affecting Our Performance—Our ability to attract and retain active customers.”

We reached 25.5 million active customers as of March 31, 2021, an increase of 81% compared to 14.1 million active customers as of March 31, 2020. Our activity rates as of March 31, 2021 and March 31, 2020 were 69% and 60%, respectively. The growth in activity rate was driven by the introduction of additional products and a higher percentage of our customers holding credit cards. Our activity rate is affected by the mix of customers with our credit card product versus other products such as debit cards. Our credit card customers have consistently had higher activity rates given the expansionary nature of credit card expenditures, while our debit card customers in contrast have lower activity rates. When we introduced our debit card product in late 2018, this led to accelerated growth in both total customers and active customers in 2019, while lowering our consolidated activity rate as such customers tend to have lower activity than credit card customers. Since then, our activity rate has continued to increase as our customers tend to use us more frequently across multiple products.

Active Customers (in millions) and Activity Rate (%)

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Purchase volume, or “PV”

We measure PV to assess the volume of transactions that take place on our card-based products. We earn interchange fees on our PV, which we define as the total value of transactions that are authorized through our credit and debit cards only; it does not include other payment methods that we offer such as PIX, a payment system that allows real-time payments and transfers launched by the Central Bank of Brazil, WhatsApp payments and traditional wire transfers.

PV reached US$7.5 billion and US$22.5 billion in the three months ended March 31, 2021 and the year ended December 31, 2020, respectively, an increase of 47% and 32% respectively, compared to US$5.1 billion and US$17.1 billion in the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. On an FX Neutral basis, PV reached US$7.5 billion and US$21.2 billion in the three months ended March 31, 2021 and the year ended December 31, 2020 respectively, an increase of 76% and 74% respectively, compared to US$4.3 billion and US$12.1 billion in the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. PV grew faster than interchange revenue over the first quarter of 2021, driven primarily by a greater amount of debit card volume, which has a lower interchange rate than credit cards. Debit card volume increased more than credit card volume due to an increase in NuConta accounts, an increase in debit card activations for existing NuConta accounts, and an increase in our overall promotion of our debit card product.

Our cohorts have generally increased their PV over time as our customers become more familiar with our products, bring more of their spend to our products, grow their wealth and benefit from larger credit lines from us. This can be seen when looking at the monthly average PV across our cohorts. In line with market trends, nearly all cohorts showed declining PV during periods of the COVID-19 pandemic where economic activity declined and when we reduced credit limits due to reduced consumer income and economic uncertainty.

Monthly Average Purchase Volume (Credit and Debit Spending) by Quarterly Cohort (Indexed to 100)

Monthly Average Revenue Per Active Customer, or “Monthly ARPAC” (in US$)

We monitor Monthly ARPAC to track the value we generate on a customer level across all our customers in a given period. We define Monthly ARPAC as the average monthly revenues (total revenue divided by number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period).

Monthly ARPAC was US$3.5 and US$5.5 for the three months ended March 31, 2021 and 2020, respectively. In comparison, Monthly ARPAC was US$3.6 and US$5.9 for the years ended December 31, 2020 and 2019, respectively. On a FX Neutral basis, our Monthly ARPAC was US$3.5 and US$4.6 for the three months ended March 31, 2021 and 2020, respectively. In comparison, Monthly ARPAC was US$3.4 and US$4.2 for the years ended December 31, 2020 and 2019, respectively. Monthly ARPAC has declined as we have focused on growing

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customers across the financial spectrum and have used our debit card product as an important product to reach customers that were not fully addressed by our credit card product. These customers have smaller or no credit lines with us, lower initial purchase volumes, lower interchange fees associated with their debit card volume and therefore lower initial Monthly ARPAC. In addition, in response to COVID-19, we lowered the initial credit limits for our credit card product, reducing purchase volume per customer, and consequently reducing Monthly ARPAC.

Over time, we have seen increased Monthly ARPAC from our customers across all our cohorts, as shown below. As we gather more data on our customers, we increase their credit limits based on performance, which enables us to increase our share of existing customer spending. Furthermore, our customers adopt more of our products over time, allowing us to generate more revenue from their activity.

Monthly ARPAC by Quarterly Cohort (in US$, FX Neutral)

The above chart shows Monthly ARPAC for each quarterly cohort starting in the first quarter of 2017. For these cohort analyses, specifically, we have not allocated to any of the cohorts revenues from insurance brokerage, investments (brokerage and asset management), and interest and fair value changes of financial instruments on corporate cash, revenues which collectively represented % of our revenues in the three months ended March 31, 2021. If these allocations were made, the Monthly ARPAC shown in these cohort analyses would be higher.

Our Monthly ARPAC reaches approximately US$8.00 between the third and fourth years, despite not allocating certain of our revenues, as highlighted above. Our cohorts have generally had increasing Monthly ARPAC over time, with nearly all cohorts having declining Monthly ARPAC during periods impacted by the COVID-19 pandemic where economic activity declined and when we reduced credit limits due to reduced consumer income and economic uncertainty.

Monthly Average Cost to Serve Per Active Customer (in US$)

We compare our monthly average cost to serve per active customer to our Monthly ARPAC to assess our customer economics in a given period. We define monthly average cost to serve per active customer as the monthly average of the sum of transactional expenses and customer support and operations expenses (sum of these expenses in the period divided by the number of months in the period) divided by the average number of individual active customers during the period (average number of individual active customers defined as the average of the number of active customers at the beginning of the period measured, and the number of active customers at the end of the period).

Our monthly average cost to serve per active customer was US$0.8 and US$1.9 for the three months ended March 31, 2021 and 2020, respectively. In comparison, it was US$1.2 and US$1.9 for the years ended December 31, 2020 and 2019, respectively. On an FX Neutral basis, our monthly average cost to serve per active customer was US$0.8 and US$1.6 for the three months ended March 31, 2021 and 2020, respectively. In comparison, it was US$1.1 and US$1.3 for the years ended December 31, 2020 and 2019, respectively. Our improvement in this metric

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was driven by continued economies of scale as we leveraged our highly scalable tech platform and continue to benefit from our investments in data and infrastructure.

Deposits

We track our deposits to assess both the trust our customers place in us as well as looking at deposits as an important source of funding for our credit products. We define deposits as money held by our individual clients in NuConta and by our SME clients in NuConta PJ. Our deposit balance is currently from our Brazilian customer base, and as we roll more products in Mexico and Colombia we expect to capture deposits in these countries as well.

Deposits increased to US$5.5 billion as of March 31, 2021, an increase of 130% compared to US$2.4 billion as of March 31, 2020 (or an increase of 173% compared to US$2.0 billion as of March 31, 2020 on an FX Neutral basis), as we grew our customer base and existing customers concentrated more of their deposits with us. We believe our deposits are highly diversified and resilient as they come entirely from our Brazilian retail customer base. As of March 31, 2021, approximately 50% of our total customers had a deposit with us.

Interest-Earning Portfolio

We generate interest income from our interest-earning portfolio. We define our interest-earning portfolio as customer receivables on which we are accruing interest.

As of March 31, 2021, our interest-earning portfolio increased to US$631.1 million, an increase of 54% compared to US$411.1 million as of March 31, 2020 (or an increase of 66% compared to US$379.9 million as of March 31, 2020, on an FX Neutral basis). As of December 31, 2020, our interest-earning portfolio increased to US$488.7 million, an increase of 21% compared to US$404.7 million as of December 31, 2019 (or an increase of 56% compared to US$289.6 million as of December 31, 2019, on an FX Neutral basis). We saw a significant increase in personal loans during this period driven by customer demand and more customers becoming eligible for our personal loan product. Credit card balances were driven by an increase in PVs during this period, primarily as a result of the overall progressive recovery of PV levels as the economic effects arising from COVID-19 gradually subdue and new customers entered the platform.

Factors Affecting Our Performance

Our ability to attract and retain active customers

Our customers are the foundation of our business. We are focused on growing and retaining our customer base and ensuring they remain active as we expect continued growth in active customers driven by the high-quality experiences we provide when they use our products, the result of which we believe is high affinity with our brand. Our existing customers have become core to our marketing as word-of-mouth virality drives a large portion of new customers to us. Since our founding in 2013, we acquired approximately 90% of our customers organically either through word-of-mouth or direct referral. This has reduced the need for us to incur significant marketing expenses.

Growth in our active customer base is driven by (i) new customers (individual or SME business accounts); (ii) increase in the number of products per customer to give customers more reasons to be active (see “—New products and adoption”); (iii) high-quality customer service as measured by our strong NPS; and (iv) understanding our less active customers so we can optimize our product offerings including providing them with higher credit limits.

Our net churn has remained relatively low and has decreased over time, averaging 0.23% per month in the three months ended on March 31, 2021. In 2020, it averaged 0.52% per month. We define net churn as the (i) sum of (a) customers who choose to cancel their accounts with us (voluntary churn) and (b) customers whose accounts are cancelled proactively by us (involuntary churn) (ii) minus revivals, all divided by the number of customers as of the end of the respective period. We consider as revivals customers whose accounts were not valid in the previous month mainly due to fraud and delinquency, but to whom access was restored once the respective issue was addressed.

We believe that our recurring investments in technology and customer service combined with the compounding effects of our self-reinforcing model have resulted in high engagement rates for our active customers. We calculate customer engagement as the ratio of daily active customers (number of Brazilian customers that within the day

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either opened our app or performed a card transaction) to monthly active customers (number of Brazilian customers that within a trailing 28-day window either opened our app or performed a card transaction). In March 2021, the 30-day average of this ratio was 42%, an increase of 20% compared to 35% in March 2020. We believe this showcases engagement similar to leading social network platforms. This social network like engagement combined with our fintech monetization is one of the foundations of our powerful self-reinforcing model.

Ratio of Daily Active Customers to Monthly Active Customers (Avg. Last 30 Days)

Our ability to increase transactions and expand revenue from existing customers

Our existing customers drive a significant portion of our growth, and we expect them to continue to drive more transactions and more PV as they grow their wealth, we get a greater share of their spend, we offer them higher credit lines, and increase adoption of our various products. Our existing customers have historically increased the number of transactions with us as evidenced by the number of transactions in a month per active customer across our quarterly customer cohorts starting in the first quarter of 2017, shown in the chart below. There is a consistent increase over time, except for a reduction across our cohorts during periods impacted by the COVID-19 pandemic where economic activity declined. Our cohorts for PV and Monthly ARPAC show the same expansionary trend for both, as shown in “—Key Business Metrics.”

Number of Transactions in a Month per Active Customer by Quarterly Cohort

Our goal is for Nu to become our customers’ primary banking account, and our customers are increasingly choosing Nu as their primary banking relationship as they become more comfortable with our products and user experience, increasing their usage of our products. We define a primary banking relationship as a relationship in which a customer has at least 50% of their monthly post-tax income (excluding transfers to self) moved-in or out of their NuConta account in any given month. We measured the percentage of primary banking relationships for

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cohorts released in 2017, 2018, 2019, 2020, and 2021. Based on our analysis, we believe that (i) within each cohort, at least 40% of users had a primary banking relationship with Nu and (ii) each cohort reached the 40% threshold at progressively faster rates. For example, our January 2019 cohort reached the 40% threshold in 19 months, while our January 2020 cohort reached it in 9 months, as illustrated in the following chart.

Percentage of Customers Using NuConta as their Primary Banking Account

New products and adoption

We are focused on developing and launching new products and features which could generate additional revenue streams and complement the experience of our customers and fulfill their wider financial service needs. We launched several products since we started our operations in 2013, including credit and debit cards, a rewards loyalty program, payment accounts for individuals and SMEs, personal loans, PIX, and life insurance. We also added investments through the acquisition of NuInvest. We expect to launch further products in the future, including additional credit products, other types of insurance policies, new investment solutions and other fee-driving businesses intended to leverage our large customer base. We have seen strong adoption of our new products over the past few years and this is evidenced across our cohorts. We expect our new products to provide additional avenues to acquire new customers as well as cross-sell within our existing customers as we continue to expect increased adoption of new products on a per customer basis.

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Number of Products per Active Customer by Quarterly Cohort

The above chart shows the number of products per customer for each quarterly cohort starting in the first quarter of 2017. We define products per customer as the average number of products held by active Brazilian customers divided by the total number of active Brazilian customers within that month. Our earliest cohorts, despite starting out with a single product, have adopted multiple new products as these have been introduced and have approximately 2.5 products as of March 2021. Our latest cohorts are starting out with close to 3 products in the first few months alone.

Continuing our international expansion

We believe that we are in the early stages of our international expansion. We plan to leverage our technology, data science, and credit approach to continue expanding into new markets. In 2019 and 2020, we expanded internationally to Mexico and Colombia because we identified customer needs and opportunities in these markets that were similar to those in Brazil. We followed a similar strategy and launched our operations in both countries with our flagship credit card product. As we enter new markets, and begin to attract new customers and build scale, our near-term ARPAC may decrease and our cost of risk may increase due to ECL as we acquire new customers, negatively impacting our operating margins.

Rapid growth of our consumer credit business and associated credit loss provisioning

Our credit provisioning model is an expected credit loss model, consistent with the IFRS9 standard, and front-loads the credit loss recognition by provisioning for future expected credit losses, or “ECL,” as soon as a credit limit is granted or the loan is extended. While we make these loan loss provisions on day one, we expect to generate revenue from these credit card and personal loan customers over time, which may negatively impact our current (or any period with rapid growth) gross profit and gross profit margin. Furthermore, as our cohorts mature and ECL forecasting models have better data to improve, we expect the negative impact caused by the front-loading of loan loss provisions to be reduced over time.

Economies of scale resulting from our technological platform

Cloud-based platform that enables scalability and agility. Our systems are designed to accommodate an ever-growing pool of customers and range of products. Being 100% cloud-based, our systems are highly scalable and we believe there are opportunities to drive further efficiency. As we add each incremental product to our platform, we benefit from the existing data and infrastructure, providing a source of operating leverage, as evidenced by a decreasing trend in our monthly average cost to serve per active customer; and

Payback period. We measure payback period on a cash basis, considering the revenue over time of our customers net of customer acquisition costs, or “CAC,” which include printing and shipping of cards, credit

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data costs, and paid marketing. Consequently, the sizeable growth in our customer base over the last three years has led to a commensurable increase in expenses of this nature. We have historically recovered these expenses in under 12 months.

Risk management

Our risk management frameworks are heavily based on data and machine learning and these models are continuously enhanced over time. As we increase our customer base and collect more data on the behavior of our customers, our models become better trained to identify and stratify our customers according to their risk, improving our decision-making. In addition, we constantly test our hypotheses using A/B testing in smaller samples of our customer base. As a result, we have improved our risk metrics year after year, as evidenced by our credit losses on financial instruments over credit portfolio ratio.

Regulation

As a tech company focused on the financial services sector in the countries we operate, we must comply with the laws and policies set by the central banks and other governmental institutions. Regulatory change might positively or negatively impact our revenue, credit provision policies and capital and liquidity requirements, among others. There are ongoing discussions to update the current methodology to calculate risk-weighted assets in Brazil, which could positively impact our capital requirements going forward. See “Risk Factors—Risks Relating to Regulatory Matters and Litigation—We are subject to extensive regulation and regulatory and governmental oversight as a digital banking platform and as a payment institution. Compliance with or violation of present or future regulations could be costly, expose us to substantial liability and force us to change our business practices, any of which could harm our business and results of operations.”

Seasonality

Our business is affected by customer behavior throughout the year and demonstrates seasonality effects. Historically, we benefit from higher PV and related revenue in the fourth quarter of the year due to the holiday season. However, our high historical growth has masked this seasonality in the past, and this may become more pronounced in the future. Adverse events that occur during those periods could have a disproportionate effect on our results of operations for the entire fiscal year. As a result of seasonality fluctuations caused by these and other factors, comparisons of our results of operations across different periods may not be accurate indicators of our future performance.

COVID-19 impact

By the end of 2019, the COVID-19 virus was detected in Wuhan, China, quickly spread to countries all around the world, and was subsequently recognized by the World Health Organization as a pandemic. The effects of this pandemic were felt in Latin America beginning in early 2020. To contain the spread of the virus governments enacted several policies limiting the social interaction and commercial activity of the population, including but not limited to, lockdown periods, reduced business hours, cancelation of large events and festivities, travel bans for passengers from selected countries, among others.

While countries are still advancing on the immunization of their populations, it is still too early to assess when this pandemic and its effects will end. However, we observed that our business was able to keep our strong growth momentum, especially in regards to:

Growth – we continued to increase our number of accounts consistently, partially driven by new customers from new demographics such as customers older than seventy, as well as new customers wanting to receive the governmental aid through our savings accounts and avoid the need to go to physical bank branches;

PV – we observed debit card purchase volume increase in the period, partially due to growth in the number of accounts but also on the wider adoption of cashless ways to make purchases;

Credit performance – while we saw initial credit deterioration during the early days of COVID-19, we saw fast recovery, ending 2020 with levels of credit losses lower than those at the beginning of 2020, based on the 90-day delinquency rate of our portfolio as of March 31, 2021; and

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Deposits – we served as an important link between the government aid and the population, which significantly increased our deposits balance.

Macroeconomic environment

Our results of operations are subject to political and economic factors and their respective effects on the availability of funding resources, disposable income, employment rates and average wages. They are also affected by levels of consumer spending, interest rates and the expansion or retraction of consumer credit in the countries we operate, each of which impacts the number and overall value of payment transactions. For instance, lower interest rates tend to lower our funding costs, and lower levels of unemployment combined with economic growth tends to increase PV. On the other hand, the recent depreciation of local currencies in Latin America has negatively impacted our results which are reported in U.S. dollars.

Within Latin America, we currently serve Brazil, Mexico, and Colombia, which accounted for over 60% of the population and 61% of the GDP in the region in 2020 according to the World Bank. In the past years, important industries have consolidated their presence in the region and acquired scale, the most notable being community and financial services, retail, manufacturing, transportation and communication, construction, agribusiness and mining. In most Latin American countries, an increasingly large proportion of the population is experiencing material gains in purchasing power and is being provided with augmented credit facilities, a trend that can be observed even with short-term episodes of economic downturn. Consumer patterns are therefore shifting towards more sophisticated products and services, a phenomenon that calls for enhanced business infrastructure, upgraded human capital and improved real estate facilities, among other requirements, to meet these demands.

Currently, the majority of our operations are located in Brazil, and we recently expanded our operations internationally to Mexico and Colombia in 2019 and 2020, respectively, because we believed they were very attractive markets that had some of the same characteristics and opportunities as those we had identified in Brazil.

We believe that Latin America has a large and vibrant consumer market. However, the recent economic instability in Latin America has contributed to a decline in market confidence in the economy as well as to a deteriorating political environment, and weak macroeconomic conditions are expected to continue through 2021, especially as a result of the COVID-19 pandemic.

The following table shows data for real GDP, inflation and interest rates in Brazil and the U.S. dollar/real exchange rate at the dates and for the periods indicated, as well as GDP and unemployment rates for Mexico and Colombia:

	For the Three Months Ended March 31,						For the Years Ended December 31,
	2021			2020			2020			2019			2018
	(in percentages, except as otherwise indicated)
Brazil
Real growth (contraction) in gross domestic product		1.2			(0.3	)		(4.1	)		1.1			1.3
Inflation (IGP-M)(1)		31.1			6.8			23.1			7.3			7.6
Inflation (IPCA)(2)		6.1			3.3			4.5			4.3			3.8
CDI interest rate (average)(3)		2.0			4.2			2.8			5.9			6.5
Period-end exchange rate – R$ per US$ 1.00(4)		5.697			5.199			5.197			4.031			3.875
Average exchange rate – R$ per US$ 1.00(4)		5.483			4.466			5.158			3.946			3.656
Appreciation (depreciation) of the real vs. the U.S. dollar in the period(5)		(8.8	)		(22.5	)		(22.4	)		(3.9	)		(14.6	)
Unemployment rate(6)		14.7			12.2			13.9			11.0			11.6
Colombia
Real growth (contraction) in gross domestic product		2.0			0.0			(6.8	)		3.3			2.6
Unemployment rate		14.2			12.7			13.4			9.5			9.7
Mexico
Real growth (contraction) in gross domestic product		(2.8	)		(2.1	)		(8.5	)		(0.2	)		2.2
Unemployment rate		4.4			3.3			4.4			3.3			3.7

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Sources: FGV, IBGE, IPEA, Central Bank of Brazil, Bloomberg, DANE – Departamento Administrativo Nacional de Estadística, INEGI – Instituto Nacional de Estadística, Geografía e Informática and the Colombian Central Bank.

(1)

Inflation (IGP-M) is the general market price index measured by FGV.

(2)

Inflation (IPCA) is a broad consumer price index measured by the IBGE.

(3)

The CDI Rate, which is the interest rate is an average of interbank overnight rates (certificado de depósito interbancário) in Brazil (measured as a daily average for the period).

(4)

Period-end exchange rate as of the last business day as reported by the Central Bank (PTAX). Average of the selling exchange rate of each business day of the period as reported by the Central Bank (PTAX).

(5)

Comparing the U.S. dollars to reais (US$/R$) closing selling exchange rate as reported by the Central Bank of Brazil at the end of the period’s last day with the day immediately prior to the first day of the period discussed.

(6)

Average unemployment rate for the period as measured by the IBGE.

Interest rates

Interest rates affect our ability to generate revenue. Although higher interest rates can lead to reductions in private consumption, negatively impacting our interchange fee, they can also positively correlate with interest income and expense, impacting our results.

Inflation

Inflation impacts our obligations to certain suppliers, such as office leasing, as costs are indexed to inflation rates. However, a significant part of our revenue is naturally hedged against inflation, since our interchange fees also tends to fluctuate in nominal terms according to inflation, even if we continue to apply the same percentage. When merchants adjust their prices for inflation, the purchasing power of consumers may be reduced, which may adversely affect some of our revenue streams if it results in a reduction in the number and volume of transactions.

Currency fluctuations

Our operations are conducted primarily in Brazilian reais (R$), which is the local currency in Brazil, but our presentation currency is U.S. dollars (US$). We also convert other currencies related to the countries in which we operate to U.S. dollars. This generates additional volatility in our financial statements. In the last few years, the real has significantly depreciated in comparison to the U.S. dollar, which has adversely affected our results of operations in U.S. dollars terms.

Acquisitions and new lines of business

On September 10, 2020, our subsidiary Nu Financeira entered into a purchase agreement for the acquisition of 100% of the Easynvest Companies investment platform, including Easynvest – Título, Corretora de Valores S.A., or “NuInvest,” a leading direct-to-consumer digital investment platform in Brazil with 1.6 million customers. We consummated this transaction on June 1, 2021, when control over the entities was transferred after obtaining approval for the acquisition by the CADE on October 27, 2020 and the Central Bank of Brazil on May 4, 2021. In 1999, the Easynvest Companies pioneered the offering of online access to the stock exchange in Brazil, and in 2016 it was the first one to provide access through the mobile app to the fixed-income market. On Easynvest Companies’ 100% digital platform, individual investors have access to a complete range of investments, including government bonds, private securities and investment funds, in addition to buying and selling stocks, options and futures. The company also provides financial education content through several digital channels. The aggregate purchase price was comprised of US$297 million in cash and 7.9 million of our class F-2 preferred shares.

On July 23, 2020, we announced the acquisition of Cognitect, Inc., or “Cognitect,” the US-based software consultancy firm behind the Clojure programming language and the Datomic database. The purchase price was US$10.4 million paid in cash on the acquisition date. This transaction closed on August 4, 2020. As part of the related purchase agreement, we have also agreed to a contingent cash consideration of US$4 million and contingent share consideration of Class A ordinary shares payable in equal installments over a five-year period, commencing in August 2021, contingent on Cognitect’s former shareholders and employees continuing to provide services to us.

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Description of Principal Line Items

The following is a summary of the principal line items comprising our consolidated statements of profit or loss.

Total revenue

Our total revenue consists of the sum of our interest income and gain (losses) on financial instruments and fee and commission income, as detailed below:

Interest income and gain (losses) on financial instruments

Our interest and other financial income consists of interest income on loans, credit card operations (revolving and interest-earning installment transactions) and other assets at amortized cost are calculated using the effective interest method, which allocates interest, and direct and incremental fees and costs over the expected lives of the assets. Fair value changes and other income comprises the changes in fair value of our financial instruments recognized in the statement of profit or loss. For the revolving balances, interest is calculated from the due date of the credit card bill that was not fully paid.

Gain (losses) on financial instruments consists of the fair value gains and losses from financial instruments. The income arises from both the sale and purchase of financial assets and from changes in fair value caused by movements in interest, equity prices, and other market variables, as well as the interest accrual on the fixed and floating income securities.

Fee and commission income

Interchange fees. Represents fees to authorize and provide settlement on credit and debit card transactions processed through the Mastercard network and are determined as a percentage of the total payment processed. Interchange fees, net of rewards revenue, are recognized and measured upon recognition of the transaction with the interchange network, when the performance obligation is considered satisfied. The interchange rates agreed with Mastercard are fixed and depend on the segment of each merchant. Interchange income is withheld from the amount to be paid to third parties.

NuRewards revenue. Comprises revenue related to the NuRewards subscription fee and the related interchange fee, initially apportioned in accordance with the relative stand-alone selling prices of the performance obligation assumed, as described below under “—Income taxes.” It is recorded in the statement of profit or loss when the performance obligation is satisfied, which is when the reward points are redeemed by the customers.

Late fees. Comprises fees charged when credit card bills are not paid by the due date by the relevant customer.

Recharge fees. Comprises the selling price of prepaid telephone credits to customers, net of acquisition costs.

Other fee and commission income. Mainly consists of: (i) brokerage commission income from third-party life insurance providers for sales made through our app, (ii) commission income from the issuance of boletos (banking payment slips), which is a printable document issued by merchants that is used to make payments in Brazil, and (iii) fee income for cash withdrawals.

Fee and commission income is shown net of Brazilian federal income taxes. For more information on our revenue recognition policies, see note 4 of our audited consolidated financial statements.

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Total cost of financial and transactional services provided

Total cost of financial and transactional services provided consists of the sum of our interest and other financial expenses, transactional expenses and credit loss allowance expenses, as detailed below:

Interest and other financial expenses

Interest and other financial expenses include: (i) interest expenses accrued on deposits; and (ii) interest expenses relating to interest on our financial instruments.

Transactional expenses

Transactional expenses include the costs related to data processing, payment scheme license fees, losses from chargeback relating to our credit and debit card transactions, expenses relating to our rewards program in order to fulfill the use of the points by customers, and other costs related to the connection to the payment systems in the countries that we operate. For further information on these costs, see note 6 to our audited consolidated financial statements. The most relevant transactional expenses are:

Banking payment slip costs, which comprise costs of the issuance of boleto (banking payment slips) by banks;

NuRewards expenses, which comprise the costs incurred to fulfill the redemption of rewards points by our customers;

Credit and debit card network costs, which are costs related to our payment scheme license, i.e., a fee paid to Mastercard to enable communications between network participants, access to specific reports, expenses related to projects involving the development of new functions, operational fixed fees, fees related to chargeback restatements and royalties; and

Other transaction expenses, which are mainly related to financial services expenses such as fees over financial transactions, expenses with clearinghouses and operational losses such as chargebacks. Losses from chargebacks consist of transactions credited back or refunded to the cardholder in the event a billing dispute between a cardholder and the other participant in the credit transaction process is resolved in favor of the customer. Chargebacks may occur due to a variety of factors, such as a claim by the cardholder or cases of fraud. If we are unable to collect chargeback or refund from other participants, or if they refuse to or are unable to reimburse us for a chargeback or refund due to closure, bankruptcy, or other circumstances, and, we bear the loss for the amounts paid to the cardholder.

Credit loss allowance expenses

Credit loss allowance expenses include losses associated with our credit card transactions and loans receivable from our customers. We expect our credit losses to fluctuate depending on many factors, including transaction volume and credit limits, macroeconomic conditions, the impact of regulatory changes, and the credit quality of credit card and loans receivable. Additionally, credit losses also include reversals of provisions and recoveries, where the customer pays after the write-off of the receivable.

Gross profit

Gross profit consists of our total revenue minus total cost of financial and transactional services provided.

Operating expenses

Operating expenses are segregated into customer support and operations, general and administrative expenses, marketing expenses and other income (expenses).

Customer support and operations

Customer support and operations are represented by all the expenses incurred in our process of providing services to our customers, which could be divided into:

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Infrastructure and data processing costs include technology, software, and other related costs, primarily related to the cloud infrastructure used by us and other software used in services to our customers. These costs associated exclusively with customers’ transactions are presented as “customer support and operations” and the remaining costs as “general and administrative expenses.” Infrastructure and data processing costs also include costs associated with credit and debit card fees paid to Mastercard on a quarterly basis based on the number of active cards;

Credit analysis and collection costs include fees paid to the credit bureaus and costs related to collection agencies. The credit analysis costs associated with the initial credit analysis of an applicant are presented as “general and administrative expenses” and the remaining is presented as “customer support and operations;”

Customer services primarily include our costs with customer services provided by service providers. These costs exclusively related to the acquisition of new customers are presented as “general and administrative expenses” and all others are presented as “customer support and operations;”

Salaries and associated benefits expenses for customer services squads not associated with the acquisition of new customers are presented as “customer support and operations” and salaries and associated benefits expenses for marketing squads are presented as “marketing expenses.” All activities from other squads and the activities related to the acquisition of new customers performed by customer service squads are presented as “general and administrative expenses;” and

Credit and debit card issuance costs include printing, packing, shipping costs and other costs. Costs related to the first card of a customer are initially recorded as “deferred expenses” assets included in “other assets” and then amortized. The amortization related to the first card of the customer is presented as “general and administrative expenses” and the remaining costs, including the ones related to subsequent cards, are presented as “customer support and operations.”

General and administrative expenses

General and administrative expenses represent the amounts that we spend on certain back-office activities, indirect relations with our customers and overhead. These amounts consist of infrastructure and data-processing costs, credit analysis and collection costs, customer services, salaries and associated benefits, and credit and debit card issuance costs as explained in the customer and support operations. It also includes share-based compensation, specialized services expenses and other personnel costs:

Share-based compensation corresponds to the cost of our share-based programs and awards issued;

Specialized services expenses comprise miscellaneous costs from service providers; and

Other personnel costs are related to expenses with medical assistance, meal benefit, life insurance, transportation and other benefits provided to all employees, excluding the part allocated as customer support and operations, as stated above.

Marketing expenses

Marketing expenses relate to the production and distribution of our marketing and advertising campaigns on media, online advertising, the positioning of our products in internet search platforms and expenses incurred in relation to trade marketing at events. It also contains salaries and benefits to employees dedicated exclusively to these activities.

Other income (expenses)

Other income (expenses) primarily consists of other income/expenses not classified in the foregoing categories of operating expenses.

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Finance costs – results with convertible instruments

Finance costs – results with convertible instruments, relate to interest expenses and fair value changes in embedded derivatives relating to the issuance of senior preferred shares on June 18, 2020. In particular, the change in fair value reflects the appreciation of our shares since the issuance of the senior preferred shares. On May 20, 2021, each senior preferred share was converted into one Series F-1 preferred share. For more information, see “—Indebtedness—Senior preferred shares,” note 22 to our audited consolidated financial statements and note 21 to our unaudited condensed consolidated interim financial statements.

Income taxes

Current income taxes comprise the income tax payable on profits based on the applicable tax law in each jurisdiction and is recognized as an expense in the period in which taxable profits arise. There is no taxation in the Cayman Islands on the income earned by us, and, as such, there are no tax impacts at a consolidated level.

Our subsidiaries are subject to different income tax regimes and statutory rates. The table presents the statutory income tax rates in percentage for the main countries in which we operate:

Statutory income tax rates	2021			2020			2019			2018
Brazil(1)		45	%		40	%		40	%		40	%
Colombia		31	%		32	%		33	%		n.a.
Mexico		30	%		30	%		30	%		n.a.

(1)

Comprises Brazilian Social Contribution tax (Contribuição Social sobre Lucro Líquido – CSLL) and Brazilian Income Tax (Imposto de Renda Pessoa Jurídica – IRPJ). In March 2021, the Social Contribution tax rate in Brazil increased 5 percentage points, thus the combined income tax rate was increased from 40% to 45% and will be effective from July 1 to December 31, 2021 and mainly impacts Nu Pagamentos and Nu Financeira.

Deferred income tax is the tax expected to be payable or recoverable on income tax losses available to carry forward and on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts at the reporting date. Deferred tax liabilities are generally recognized for all temporary taxable differences, and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the assets may be utilized as they reverse.

We review the carrying amount of deferred tax assets at each reporting date and reduce it to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where there is both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

As a consequence of the current and deferred income taxes and the value of the permanent differences compared to the loss before income taxes, the effective tax rate of our consolidated operations fluctuates over time according to the portion of our total net income that was generated in each of these entities. For 2020, 2019 and 2018 our effective tax rate was 11.2%, 28.4% and 14.4%, respectively, and for the three months ended March 31, 2021 and 2020, our effective tax rate was 7.3% and 28.1%, respectively.

Results of Operations

Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

The following table sets forth our statement of profit or loss data for the three months ended March 31, 2021 and 2020:

	For the Three Months Ended March 31,
	2021		2020		Variation (%)
	(in US$ millions, except percentages)
Interest income and gains (losses) on financial instruments		127.3		131.3		(3.0	)%
Fee and commission income		117.7		84.9		38.6	%

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	For the Three Months Ended March 31,
	2021			2020			Variation (%)
	(in US$ millions, except percentages)
Total revenue		245.1			216.2			13.3	%
Interest and other financial expenses		(31.7	)		(33.2	)		(4.5	)%
Transactional expenses		(26.3	)		(33.2	)		(20.8	)%
Credit loss allowance expenses		(71.3	)		(61.8	)		15.4	%
Total cost of financial and transactional services provided		(129.3	)		(128.2	)		0.9	%
Gross profit		115.7			88.0			31.5	%
Operating expenses
Customer support and operations		(32.1	)		(40.1	)		(20.0	)%
General and administrative expenses		(115.9	)		(70.6	)		64.2	%
Marketing expenses		(4.9	)		(6.1	)		(19.7	)%
Other income (expenses)		(16.2	)		(17.7	)		(8.5	)%
Total operating expenses		(169.1	)		(134.5	)		25.7	%
Loss before income taxes		(53.4	)		(46.5	)		14.8	%
Income taxes
Current taxes		(31.5	)		(6.3	)		400.0	%
Deferred taxes		35.4			19.4			82.5	%
Total income taxes		3.9			13.1			(70.2	)%
Loss for the period		(49.5	)		(33.4	)		48.2	%

Total revenue

Total revenue for the three months ended March 31, 2021 was US$245.1 million, an increase of US$28.8 million, or 13.3%, from US$216.2 million for the three months ended March 31, 2020, primarily attributable to growth in the period in our revenue from interest income from our lending operations, commissions and interchange fees and from fees from the sale of mobile phone recharge credits, partially offset by the decrease in gains on financial instruments, as detailed below.

Interest income and gains (losses) on financial instruments. Interest income for the three months ended March 31, 2021 was US$127.3 million, a decrease of US$4.0 million, or 3.0%, from US$131.3 million for the three months ended March 31, 2020, primarily attributable to a US$17.7 million decrease in interest income and gains (losses) on financial instruments at fair value mainly due to the decrease in the CDI Rate in the period; which were partially offset by a US$21.9 million increase in interest income from our lending operations due to the growth in the size of our portfolio and of our customer base in the period.

Fee and commission income. Fee and commission income for the three months ended March 31, 2021 was US$117.7 million, an increase of US$32.8 million, or 38.6%, from US$84.9 million for the three months ended March 31, 2020, primarily attributable to: (i) an increase of US$21.9 million in interchange fees arising from the increased volume of transactions with our credit and debit cards; and (ii) an increase of US$5.5 million in our fees from the sale of mobile phone recharge credits, in each case due to the growth of our customer base in the first quarter of 2021.

Total cost of financial and transactional services provided

Total cost of financial and transactional services provided for the three months ended March 31, 2021 was US$129.3 million, an increase of US$1.1 million, or 0.9%, from US$128.2 million for the three months ended March 31, 2020, as detailed below. Total cost of financial and transactional services provided as a percentage of total revenue was 53% for the three months ended March 31, 2021, compared to 59% for the three months ended March 31, 2020.

Interest and other financial expenses. Interest and other financial expenses for the three months ended March 31, 2021 were US$31.7 million, a decrease of US$1.5 million, or 4.5%, from US$33.2 million for the three months ended March 31, 2020, primarily attributable to a decrease in fair value losses on financial instruments as a result of an increase in the CDI Rate in the period.

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Transactional expenses. Transactional expenses for the three months ended March 31, 2021 were US$26.3 million, a decrease of US$6.9 million, or 20.8%, from US$33.2 million for the three months ended March 31, 2020, primarily attributable to a US$6.1 million decrease in other transactional expenses relating to operational losses.

Credit loss allowance expenses. Credit loss allowance expenses for the three months ended March 31, 2021 were US$71.3 million, an increase of US$9.5 million, or 15.4%, from US$61.8 million for the three months ended March 31, 2020. The increase reflects the increased volume of lending transactions in the first quarter of 2021 compared to the same period in 2020, partially offset by a US$5.1 million decrease in losses on credit card receivables in the first quarter of 2021. The total expected credit loss, or “ECL,” allowance losses for credit cards and loans recorded in the statements of financial position were 2% of the total receivable balance of credit cards and loans as of March 31, 2021, compared to 3% as of March 31, 2020.

Operating expenses

Operating expenses for the three months ended March 31, 2021 were US$169.1 million, an increase of US$34.6 million, or 26%, from US$134.5 million for the three months ended March 31, 2020. Operating expenses represented 43% of our total revenue for the three months ended March 31, 2021, compared to 62% for the three months ended March 31, 2020. The main changes leading to the increase in operating expenses in the period are explained below.

Customer support and operations. Customer support and operations expenses for the three months ended March 31, 2021 were US$32.1 million, a decrease of US$8.0 million, or 20%, from US$40.1 million for the three months ended March 31, 2020, mainly attributable to decreased infrastructure and data-processing costs, reflecting efficiency gains in data processing.

General and administrative expenses. General and administrative expenses for the three months ended March 31, 2021 were US$115.9 million, an increase of US$45.3 million, or 64%, from US$70.6 million for the three months ended March 31, 2020, primarily attributable to (i) an increase of US$40.4 million in share-based compensation, primarily attributed to growth in employee headcount and (ii) an increase of US$6 million in salaries and associated benefits.

Marketing expenses. Marketing expenses for the three months ended March 31, 2021 were US$4.9 million, a decrease of US$1.2 million, or 20%, from US$6.1 million for the three months ended March 31, 2020, primarily due to the decrease in marketing campaigns due to the Covid-19 pandemic.

Other income (expenses). Other income (expenses) for the three months ended March 31, 2021 were an expense of US$16.2 million, a decrease of US$1.5 million, or 8%, from an expense of US$17.7 million for the three months ended March 31, 2020, primarily attributable to a decrease in Brazilian social contribution deductions from revenue (Social Integration Program – PIS and Social Security Program – COFINS).

Loss before income taxes

As a result of the foregoing, loss before income taxes for the three months ended March 31, 2021 was US$53.4 million, an increase of US$6.9 million, or 15%, from US$46.5 million in the three months ended March 31, 2020.

Income taxes

We had a tax benefit of US$3.9 million for the three months ended March 31, 2021, a decrease of US$9.3 million, from a tax benefit of US$13.1 million for the three months ended March 31, 2020. The effective income tax rate was negative 7.3% in the three months ended March 31, 2021 (compared to negative 28.1% for the same period in 2020), which reflects an increase in current income tax rates due to non-deductible expenses being higher proportionally to the loss before income taxes for the three months ended on March 31, 2021 compared to the same period in 2020.

Loss for the period

As a result of the foregoing, loss for the three months ended March 31, 2021 was US$49.5 million, an increase of US$16.1 million, or 48%, from US$33.4 million for the three months ended March 31, 2020.

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Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

The following table sets forth our statement of profit or loss data for the years ended December 31, 2020 and 2019:

	For the Years Ended December 31,
	2020			2019			Variation (%)
	(in US$ millions, except percentages)
Interest income and gains (losses) on financial instruments		382.9			337.9			13.3	%
Fee and commission income		354.2			274.2			29.2	%
Total revenue		737.1			612.1			20.4	%
Interest and other financial expenses		(113.9	)		(109.7	)		3.9	%
Transactional expenses		(126.8	)		(79.3	)		59.9	%
Credit loss allowance expenses		(169.5	)		(175.2	)		(3.3	)%
Total cost of financial and transactional services provided		(410.2	)		(364.2	)		12.6	%
Gross profit		326.9			247.9			31.9	%
Operating expenses
Customer support and operations		(124.0	)		(115.6	)		7.3	%
General and administrative expenses		(266.0	)		(199.9	)		33.1	%
Marketing expenses		(19.4	)		(41.8	)		(53.6	)%
Other income (expenses)		(9.5	)		(19.9	)		(52.3	)%
Total operating expenses		(418.9	)		(377.2	)		11.1	%
Finance costs – result with convertible instruments		(101.2	)		—			n.m.
Loss before income taxes		(193.2	)		(129.3	)		49.4	%
Income taxes
Current taxes		(22.3	)		(3.6	)		n.m.
Deferred taxes		44.0			40.3			9.2	%
Total income taxes		21.7			36.8			(41.0	)%
Loss for the year		(171.5	)		(92.5	)		85.4	%

n.m. = not meaningful.

Total revenue

Total revenue for the year ended December 31, 2020 was US$737.1 million, an increase of US$125.0 million, or 20.4%, from US$612.1 million for the year ended December 31, 2019, primarily attributable to significant growth in 2020 in our revenue related to interchange fees, as well as the fees from the sale of mobile phone recharge credits and gains on financial instruments reflecting an increase in securities acquired with cash from deposits, as detailed below.

Interest income and gains (losses) on financial instruments. Interest income for the year ended December 31, 2020 was US$294.3 million, an increase of US$14.3 million, or 5%, from US$280.0 million for the year ended December 31, 2019, primarily attributable to: (i) an increase in interest income from our loan portfolio and credit card receivables reflecting the growth of our customer base of 64% in the period, reaching 32.6 million customers in 2020 compared to 19.8 million customers in 2019, partially offset by a decrease of US$19.5 million in interest income from short-term investments; and (ii) gains on financial instruments for the year ended December 31, 2020 was US$88.6 million, an increase of US$30.8 million, or 53.3%, from US$57.8 million for the year ended December 31, 2019, primarily attributable to the increase of US$49.2 million from financial instruments at fair value reflecting an increase in securities acquired with cash from deposits. This increase was partially offset by losses incurred mainly in derivatives transactions.

Fee and commission income. Fee and commission income for the year ended December 31, 2020 was US$354.2 million, an increase of US$80.0 million, or 29.2%, from US$274.2 million for the year ended December 31, 2019, primarily attributable to an increase of US$50.4 million in our interchange fees arising from the increased volume of transactions with our credit and debit cards, as well as an increase of US$14.9 million in revenue resulting from the fees from the sale of mobile phone recharge credits, each case due to the growth of our customer base in 2020.

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Total cost of financial and transactional services provided

Total cost of financial and transactional services provided for the year ended December 31, 2020 was US$410.2 million, an increase of US$46.0 million, or 12.6%, from US$364.2 million for the year ended December 31, 2019, as detailed below.

Interest and other financial expenses. Interest and other financial expenses for the year ended December 31, 2020 were US$113.9 million, an increase of US$4.2 million, or 3.9%, from US$109.7 million for the year ended December 31, 2019, primarily attributable to an increase in fair value losses on financial instruments as a result of a decrease in the CDI Rate in the period, which was partially offset by a decrease of US$6.3 million in other financial expenses.

Transactional expenses. Transactional expenses for the year ended December 31, 2020 were US$126.8 million, an increase of US$47.5 million, or 60%, from US$79.2 million for the year ended December 31, 2019, primarily attributable to the growth of our customer base in 2020, including increases in boletos (banking payment slip) costs, rewards expenses, credit and debit card network costs and other transactional expenses.

Credit loss allowance expenses. Credit loss allowance expenses for the year ended December 31, 2020 were US$169.5 million, a decrease of US$5.7 million, or 3%, from US$175.2 million for the year ended December 31, 2019, mainly attributable to (i) our more restrictive credit policy implemented in 2020 due to the COVID-19 pandemic and (ii) the positive impact of the Brazilian government’s economic support policies, which contributed to compensate the anticipated increase in ECL allowance due to the growth in the credit card and loan receivables in 2020. The total ECL allowance for credit cards and loans recorded in the statements of financial position decreased by 1.1 percentage points, to 5% of the total receivable balance of credit cards and loans as of December 31, 2020, from 6% as of December 31, 2019.

Operating expenses

Operating expenses for the year ended December 31, 2020 were US$418.9 million, an increase of US$41.7 million, or 11%, from US$377.2 million for the year ended December 31, 2019. Operating expenses represented 48% of our total revenue in 2020, compared to 60% in 2019. The main changes leading to the increase in operating expenses in the period are explained below.

Customer support and operations. Customer support and operations expenses for the year ended December 31, 2020 were US$124.0 million, an increase of US$8.3 million, or 7%, from US$115.6 million for the year ended December 31, 2019, primarily attributable to an increase of (i) US$10.2 million in credit analysis and collection costs and (ii) US$13.0 million in customer services, in each case as a result of the increase in the number of customers in 2020. This increase was partially offset by a decrease in infrastructure and data-processing costs reflecting efficiency gains in data processing and our foreign exchange hedging strategy.

General and administrative expenses. General and administrative expenses for the year ended December 31, 2020 were US$266.0 million, an increase of US$66.1 million, or 33%, from US$199.9 million for the year ended December 31, 2019, primarily attributable to (i) an increase of US$35.2 million in salaries and associated benefits, and (ii) an increase of US$37.8 million in share-based compensation, both primarily attributed to growth in employee headcount of 26%, in 2020 compared to the prior year, and the social wages expenses due to the share appreciation; partially offset by a US$24.1 million decrease in credit and debit card issuance costs due to decreased printing and shipping expenses.

Marketing expenses. Marketing expenses for the year ended December 31, 2020 were US$19.4 million, a decrease of US$22.4 million, or 54%, from US$41.8 million for the year ended December 31, 2019, primarily due to the decrease in marketing campaigns due to the COVID-19 pandemic.

Other income (expenses). Other income (expenses) for the year ended December 31, 2020 were an expense of US$9.5 million, a decrease of US$10.4 million, or 52.1%, from an expense of US$19.9 million for the year ended December 31, 2019, primarily attributable to a decrease in Brazilian social contribution deductions from revenue (Social Integration Program – PIS and Social Security Program – COFINS).

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Finance costs - result with convertible instruments

Finance costs - result with convertible instruments for the year ended December 31, 2020 were US$101.1 million, which refers to the interest expense in the amount of US$28.4 million and fair value losses resulting from changes in the fair value of the embedded derivative conversion feature in the amount of US$72.5 million. The change in fair value reflects the appreciation of our shares since the issuance of the senior preferred shares. In the year ended December 31, 2019, we did not record finance costs in connection with the results of convertible instruments. For more information, see note 22 to our audited consolidated financial statements.

Loss before income taxes

As a result of the foregoing, loss before income taxes for the year ended December 31, 2020 was US$193.2 million, an increase of US$64.1 million, or 49%, from US$129.3 million for the year ended December 31, 2019.

Income taxes

Income taxes for the year ended December 31, 2020 were a tax benefit of US$21.7 million, a decrease of US$15.1 million, or 41%, from a tax benefit of US$36.8 million for the year ended December 31, 2019. The effective income tax rates were 11.2% and 28.4% in the years 2020 and 2019, respectively, which reflects an increase in current income tax rates due to non-deductible expenses being higher proportionally to the loss before income tax in 2020, compared to 2019.

Loss for the year

As a result of the foregoing, loss for the year ended December 31, 2020 was US$171.5 million, an increase of US$78.9 million, or 85%, from US$92.5 million for the year ended December 31, 2019.

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018

The following table sets forth our statement of profit or loss data for the years ended December 31, 2019 and 2018:

	For the Years Ended December 31,
	2019			2018			Variation (%)
	(in US$ millions, except percentages)
Interest income and gains (losses) on financial instruments		337.9			161.6			109.1	%
Fee and commission income		274.2			157.3			74.3	%
Total revenue		612.1			318.9			91.9	%
Interest and other financial expenses		(109.7	)		(45.4	)		141.5	%
Transactional expenses		(79.3	)		(43.2	)		83.6	%
Credit loss allowance expenses		(175.2	)		(118.6	)		47.7	%
Total cost of financial and transactional services provided		(364.2	)		(207.2	)		75.8	%
Gross profit		247.9			111.7			121.9	%
Operating expenses
Customer support and operations		(115.6	)		(46.7	)		147.5	%
General and administrative expenses		(199.9	)		(84.7	)		136.0	%
Marketing expenses		(41.8	)		(6.4	)		n.m.
Other income (expenses)		(19.9	)		(7.3	)		172.6	%
Total operating expenses		(377.2	)		(145.1	)		160.0	%
Loss before income taxes		(129.3	)		(33.4	)		287.1	%
Income taxes
Current taxes		(3.6	)		(15.5	)		(76.8	)%
Deferred taxes		40.3			20.3			98.5	%
Total income taxes		36.8			4.8			n.m.
Loss for the year		(92.5	)		(28.6	)		223.4	%

n.m. = not meaningful.

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Total revenue

Total revenue for the year ended December 31, 2019 was US$612.1 million, an increase of US$293.2 million, or 91.9%, from US$318.9 million for the year ended December 31, 2018, primarily attributable to the increase in gains on financial instruments reflecting an increase in securities acquired with cash from deposits, and the significant growth in the year in our interchange fees income and interest income, as detailed below.

Interest income and gains (losses) on financial instruments. Interest income for the year ended December 31, 2019 was US$280.0 million, an increase of US$137.2 million, or 96.2%, from US$142.7 million for the year ended December 31, 2018, primarily attributable to: (i) a US$137.7 million increase in interest income from operations (including lending, credit cards and short-term investments in securities), reflecting a growth of 13.8 million, or 231%, in the numbers of customers in 2019 compared to 2018; and (ii) gains on financial instruments for the year ended December 31, 2019 of US$57.8 million, an increase of US$38.8 million, or 206.6%, from US$18.9 million for the year ended December 31, 2018, attributable to the increase in gains from financial instruments at fair value reflecting an increase in securities acquired with cash from deposits.

Fee and commission income. Fee and commission income for the year ended December 31, 2019 was US$276.6 million, an increase of US$119.3 million, or 76%, from US$157.3 million for the year ended December 31, 2018, primarily attributable to the US$87.6 million increase in interchange fees arising from the increased volume of transactions with our credit and debit cards, due to the growth of our customer base in 2019.

Total cost of financial and transactional services provided

Total cost of financial and transactional services provided for the year ended December 31, 2019 was US$364.2 million, an increase of US$157.0 million, or 75.8%, from US$207.2 million for the year ended December 31, 2018, as detailed below. Total cost of financial and transactional services provided as a percentage of total revenue was 60% for the year ended December 31, 2019, a decrease of 5 percentage points, from 65% for the year ended December 31, 2018.

Interest and other financial expenses. Interest and other financial expenses for the year ended December 31, 2019 were US$109.7 million, an increase of US$64.3 million, or 141.5%, from US$45.4 million for the year ended December 31, 2018, primarily attributable to increase in interest expenses on deposits reflecting the growth in deposits volume and the growth in the number of customers in 2019 compared to 2018.

Transactional expenses. Transactional expenses for the year ended December 31, 2019 were US$79.3 million, an increase of US$36.1 million, or 83.6%, from US$43.2 million for the year ended December 31, 2018, primarily attributable to the growth in the numbers of customers in 2019 compared to 2018, leading to increases in all categories of line items comprising transactional expenses.

Credit loss allowance expenses. Credit loss allowance expenses for the year ended December 31, 2019 were US$175.2 million, an increase of US$56.5 million, or 48%, from US$118.6 million for the year ended December 31, 2018. The increase in expenses primarily reflects the increase of 75% in credit card and loan receivables in 2019. The total ECL allowance recorded in the statements of financial position represented 7.4% of the total receivable balance of credit card and loans for the year ended December 31, 2019, compared to 8.2% for the year ended December 31, 2018.

Operating expenses

Operating expenses for the year ended December 31, 2019 were US$377.2 million, an increase of US$232.1 million, or 160%, from US$145.1 million for the year ended December 31, 2018. Operating expenses represented 60% of our total revenue in 2019, compared to 45% in 2018. The main changes leading to the increase in operating expenses in the period are explained below:

Customer support and operations. Customer support and operations expenses for the year ended December 31, 2019 were US$115.6 million, an increase of US$68.9 million, or 148%, from US$46.7 million for the year ended

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December 31, 2018, mainly attributable to (i) an increase of US$24.8 million due to expenses with infrastructure and data-processing costs, and (ii) an increase of US$23.4 million in customer services, such as call centers. Both increases reflect the growth in the number of customers in 2019. Despite the increase in infrastructure and data-processing costs, the cost per customer decreased reflecting efficiency gains in data processing and our foreign exchange hedging strategy.

General and administrative expenses. General and administrative expenses for the year ended December 31, 2019 were US$199.9 million, an increase of US$115.2 million, or 136%, from US$84.7 million for the year ended December 31, 2018, primarily attributable to (i) an increase of US$32.5 million in salaries and associated benefits and an increase of US$9.2 million in share-based compensation, both primarily attributed to growth in employee headcount of 92%, or 1,116 employees, in 2019 compared to the prior year, (ii) an increase of US$42.7 million in infrastructure and data-processing costs to support our growing operations, and (iii) an increase of US$23.6 million in credit and debit cards issuance costs due to the growth of our customer base.

Marketing expenses. Marketing expenses for the year ended December 31, 2019 were US$41.8 million, an increase of US$35.3 million from US$6.4 million for the year ended December 31, 2018, primarily due to expenses relating to marketing campaigns in the year.

Other income (expenses). Other income (expenses) for the year ended December 31, 2019 were and expense of US$19.9 million, an increase of US$12.6 million from an expense of US$7.3 million for the year ended December 31, 2018, primarily attributable to the US$6.2 million increase in Brazilian social contribution deductions from revenue (Social Integration Program – PIS and Social Security Program – COFINS).

Loss before income taxes

As a result of the foregoing, loss before income taxes for the year ended December 31, 2019 was US$129.3 million, an increase of US$95.9 million, or 287%, from US$33.4 million for the year ended December 31, 2018.

Income taxes

Income taxes for the year ended December 31, 2019 were a tax benefit of US$36.8 million, an increase of US$31.9 million from a tax benefit of US$4.8 million on the year ended December 31, 2018. The effective income tax rates were 28.4% and 14.4% in the years 2019 and 2018, respectively, which reflects an increase in current income tax rates due to non-deductible expenses being lower proportionally to the loss before income tax in 2019, compared to 2018.

Loss for the year

As a result of the foregoing, loss for the year ended December 31, 2019 was US$92.5 million, an increase of US$63.9 million, or 224%, from US$28.6 million for the year ended December 31, 2018.

Liquidity and Capital Resources

Cash flows

As of March 31, 2021 and December 31, 2020, we had US$2,200.7 million and US$2,343.8 million, respectively, in cash and cash equivalents. We believe that our current available cash and cash equivalents and the projected cash flows from our operating activities will be sufficient to meet our working capital requirements and capital expenditures in the ordinary course of business for the next 12 months and beyond. The following table shows the generation and use of cash for the periods indicated:

	For the three months ended March 31,						For the year ended December 31,
	2021			2020			2020			2019			2018
	(in US$ millions)
Cash flows (used in)/generated from operating activities		(221.9	)		(56.7	)		977.2			276.1			(5.5	)
Cash flow (used in)/ generated from investing activities		(5.2	)		(0.2	)		(16.3	)		(4.7	)		(6.4	)

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	For the three months ended March 31,					For the year ended December 31,
	2021		2020			2020		2019		2018
	(in US$ millions)
Cash flow (used in) / generated from financing activities		394.4		(14.1	)		237.5		611.2		253.4
Increase (decrease) in cash and cash equivalents		167.3		(71.0	)		1,198.4		882.7		241.6
Cash and cash equivalents - end of the year/period		2,200.7		1,032.5			2,343.8		1,246.6		379.2

Our cash and cash equivalents include reverse repurchase agreements, short-term investments, banking account balances, securities and other cash and cash equivalents. The reverse repurchase agreements substantially have one-day maturities and have an immaterial risk of change in value. Short-term investments and securities are highly liquid investments with original maturities of three months or less and with an immaterial risk of change in value. For more information, see note 10 to our audited consolidated financial statements and note 9 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus.

Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Operating activities. Our net cash flows used in operating activities for the three months ended March 31, 2021, were US$221.9 million, an increase of US$165.2 million from US$56.7 million net cash flows used in operating activities for the three months ended March 31, 2020. Our loss for the three months ended March 31, 2021, was US$49.5 million, an increase of US$16.1 million from US$33.4 million for the three months ended March 31, 2020. The adjustments to reconcile loss for the period to cash used in operating activities for the three months ended March 31, 2021 were US$132.3 an increase of US$115.3 million from US$17.0 for the three months ended March 31, 2020, primarily as a result of changes in fair value of financial instruments increasing to a gain of US$87.0 million in the first quarter of 2021 from a loss of US$6.5 million in the first quarter of 2020, as well as stock options granted increasing to US$33.1 million in the first quarter of 2021 from US$7.1 million in the first quarter of 2020. Changes in our operating assets and liabilities were principally affected by a US$1,068.0 million increase in deposits, which were primarily used to invest in securities (corresponding to a US$1,090.0 million increase in securities in the first quarter of 2021). Our credit and debit card activities in the first quarter of 2021 also contributed to the changes in net cash flows used in operating activities in the period, corresponding to a US$555.6 million decrease in credit card receivables and a US$354.1 million increase in payables to credit card networks.

Investing activities. Our net cash flows (used in) investing activities for the three months ended March 31, 2021, were US$5.2, an increase of US$5.0 million, from US$0.2 million in the three months ended March 31, 2020 to US$5.2 million in the three months ended March 31, 2021, primarily due to the acquisition of fixed assets and capitalized expenditures directly attributable to internally generated intangible assets.

Financing activities. Our net cash flows generated from financing activities for the three months ended March 31, 2021 were US$394.4 million, an increase of US$408.5 million from US$14.1 million for the three months ended March 31, 2020. The increase in the cash generated resulted primarily from the capital increase that occurred in the three months ended March 31, 2021 corresponding to the new “Series G” investment round.

As a result of the foregoing, cash and cash equivalents as of March 31, 2021 were US$2,200.6 million, a decrease of US$143.1 million, from US$2,343.8 million as of December 31, 2020.

Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

Operating activities. Our net cash flows generated from operating activities for the year ended December 31, 2020 were US$977.2 million, an increase of US$701.0 million from US$276.1 million net cash flows generated from operating activities for the year ended December 31, 2019. Our loss for the year ended December 31, 2020, was US$171.5 million, an increase of US$78.9 million from US$92.5 million in the year ended December 31, 2019. The adjustments to reconcile loss for the year to cash generated from operating activities for the year ended December 31, 2020 were US$106.1 million, a decrease of US$5.4 million from US$111.5 million in 2019, primarily as a result of changes in the fair value of financial instruments increasing to US$48.4 million in 2020, from US$1.8 million in 2019. Changes in our operating assets and liabilities were principally affected by a US$782.5 million

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increase in deposits, which were primarily used to invest in securities (corresponding to a US$319.3 million increase in securities in 2020), with the remaining cash received from deposits being recorded as cash and cash equivalents. Our credit and debit card activities in the year ended December 31, 2020 also contributed to the changes in net cash flows used in operating activities in the period, corresponding to a US$1,172.2 million decrease in credit card receivables and a US$1,052.8 million increase in payables to credit card networks.

Investing activities. Our net cash flows used in investing activities as of December 31, 2020 were US$16.3 million, an increase of US$11.6 million, from US$4.7 million as of December 31, 2019, primarily due to the acquisition of Cognitect.

Financing activities. Our net cash flows generated from financing activities for the year ended December 31, 2020 were US$237.4 million, a decrease of US$373.3 million from US$611.1 million for the year ended December 31, 2019. The decrease in the cash generated can be explained by the lower proceeds from securitized borrowing and borrowings and financing in 2020 compared to 2019, as deposits from our customers became an important source of cash for our activities. Further, there was a decrease in proceeds from equity financing activities with our investors, which are reflected as capital increase, explained by the issuance of senior preferred shares as of December 31, 2020 of US$300.0 million and the capital increase of US$400.0 million as of December 2019.

As a result of the foregoing, cash and cash equivalents as of December 31, 2020 were US$2,343.7 million, an increase of US$1,097.2 million, from US$1,246.5 million as of December 31, 2019.

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018

Operating activities. Our net cash flows generated from operating activities for the year ended December 31, 2019 were US$276.1 million, an increase of US$281.5 million from US$5.4 million net cash used in operating activities for the year ended December 31, 2019. Our loss for the year ended December 31, 2019 increased to US$92.5 million in 2019 from US$28.6 million in 2018. The adjustments to reconcile loss for the year to cash generated from operating activities for the year-ended December 31, 2019 were US$111.5 million from US$142.8 million as of December 31, 2018, primarily as a result of credit loss allowance expenses increasing to US$194.0 million in 2019, from US$150.4 million in 2018, as well as deferred income taxes increasing to US$40.3 million in 2019, from US$19.1 million in 2018. Changes in our operating assets and liabilities were principally affected by a US$2,088.8 million increase in deposits in 2019, which were primarily used to invest in securities (corresponding to a US$1,689.5 million increase in securities in 2019). Our credit and debit card activities in 2019, which are represented by credit card receivables (corresponding to a US$1,414.5 million increase in 2019) and payables to credit card networks (corresponding to a US$1,365.5 million increase in 2019), also contributed to the changes in net cash flows generated from operating activities in the period.

Investing activities. Our net cash flows used in investing activities decreased by 26.7%, from US$6.4 million in 2018 to US$4.7 million in 2019, primarily due to a lower value of acquisitions of fixed assets and intangible assets.

Financing activities. Our net cash flows generated from financing activities for the year ended December 31, 2019 were US$611.1 million, an increase of US$357.7 million from US$253.4 million for the year ended December 31, 2018, primarily due to our recording a capital increase of US$400.0 million in 2019 compared to a capital increase of US$243.6 million in 2018. In addition, securitized borrowings were US$126.8 million in 2019, representing an increase from US$34.2 million in 2018 to US$126.8 million, as well as proceeds from borrowings and financing were US$160.6 million in 2019 an increase from US$28.4 million in 2018, which was especially relevant in the first half of 2019, during which period there was no significant increase in the volume of deposits, whereas deposits from our customers became a more important source of cash for our activities as from the second half of 2019.

As a result of the foregoing, cash and cash equivalents as of December 31, 2019 were US$1,246.5 million, an increase of US$867.4 million, from US$379.2 million as of December 31, 2018.

Indebtedness

As of March 31, 2021, our indebtedness was composed of US$13.1 million in instruments eligible as capital, US$103.2 million in borrowings and financing, US$57.7 million in securitized borrowing, US$10.2 million in lease

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liabilities and US$342.4 million in senior preferred shares. The following is a description of our material indebtedness as of the date of this prospectus:

Instruments eligible as capital

In June 2019, our subsidiary Nu Financeira issued a subordinated financial letter in the amount equivalent to US$18.8 million, which qualified as Tier 2 capital upon approval of the Central Bank of Brazil in September 2019. The subordinated financial letter bears a fixed interest rate per annum of 12.8%, is callable at the option of the issuer in June 2024, and the principal amount thereunder is payable upon maturity in June 2029. For more information, see note 16 of our audited financial statements.

Borrowings and financing

Borrowings and financing are comprised of borrowings denominated in reais issued by our subsidiaries in Brazil, generally indexed to the Brazilian CDI rate; and in Mexican Pesos by our Mexican subsidiary, Nu BN Servicios México, S.A. de C.V., or “Nu Servicios,” generally indexed to the Mexican Interbanking Equilibrium Interest Rate, or the “Mexican TIIE.” For more information, see note 19 of our audited financial statements and note 18 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus.

On July 19, 2020, our Mexican subsidiary Nu Servicios entered into a term loan credit facility with Bank of America México, S.A., Institución de Banca Múltiple, with interest accruing at a rate per annum equal to the Mexican TIIE + 1.45% and maturity dates between January 2021 and July 2023. This term loan credit facility is guaranteed by us and our subsidiary Nu Pagamentos. As of March 31, 2021, US$11.4 million was outstanding under this credit facility.

On November 23, 2020, our Mexican subsidiary Nu Servicios entered into a term loan credit facility with J.P. Morgan México S.A., Institución de Banca Múltiple, with interest accruing at a rate per annum equal to the Mexican TIIE + 1.45% and maturity dates between July 2021 and December 2023. This term loan credit facility is guaranteed by us and our subsidiary Nu Pagamentos. As of March 31, 2021, US$10.3 million was outstanding under this credit facility.

On January 25, 2021, our Mexican subsidiary Nu Servicios entered into a term loan credit facility with an affiliate of Goldman Sachs & Co. LLC, with interest accruing at a rate per annum equal to the Mexican TIIE + 1.18% and maturing on January 25, 2024. This term loan credit facility is guaranteed by us and our subsidiary Nu Pagamentos. As of March 31, 2021, US$15.0 million was outstanding under this credit facility, out of an aggregate of US$25.0 million available.

Securitized borrowings

Securitized borrowings correspond to senior quotas issued by FIDC Nu, which accrue interest at a rate per annum of the CDI Rate +30% for the 1st series, CDI Rate +4% for the 2nd series and CDI Rate + 1.1% for the 3rd series. We fully settled the notes of the 1st series in December 2020. The principal amount under the senior quotas is payable upon maturity in December 2021 for the 2nd series and in February 2022 for the 3rd series. Our subsidiary Nu Pagamentos is the holder of the subordinated quotas under the senior notes. The underlying assets of the FIDC correspond to credit card receivables and we expect the volume of securitized borrowings based on receivables from the Brazilian operations to decrease over the next couple years.

Lease liabilities

Lease liabilities correspond to lease agreements for certain items in our operations, primarily in connection with leasing office space under agreements that are generally indexed to reais or Mexican Pesos, as applicable.

Senior preferred shares

On June 18, 2020, we issued senior preferred shares in the amount of US$300.0 million. Our senior preferred shares are considered a financial instrument with convertible features deemed embedded derivatives. As of March 31, 2021, US$342.4 million was recorded as principal of the host debt instrument at amortized cost and US$58.4 million was recorded as a derivative. On May 20, 2021, each senior preferred share was converted into one Series F-1 preferred share,

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with the total issuance of 16,795,799 shares at the request of the holders. The conversion consisted of a reclassification of the amount recognized as a derivative and recognized as liability into share capital and share premium reserve in the total amount of US$0.4 million. At the date of conversion, the total fair value of the senior preferred shares, which consisted of the fair value of derivative and of the liability, were determined to be equivalent to their values as of March 31, 2021. As a result, there is no effect on the consolidated statement of profit or loss as a result of the conversion. For more information, see note 22 to our audited consolidated financial statements and note 21 to our unaudited condensed consolidated interim financial statements.

Capital Expenditures

In the three months ended March 31, 2021 and the years ended December 31, 2020, 2019 and 2018, we made capital expenditures (defined as cash payments to acquire property, plant and equipment or intangible assets) of US$5.2 million, US$7.9 million, US$4.6 million and US$6.3 million, respectively.

These capital expenditures mainly include expenditures related to the upgrade and development of our IT systems, software and infrastructure, facilities, machinery and equipment, furniture and fittings and leasehold improvements.

We expect to increase our capital expenditures to support the growth in our business and operations in the countries in which we operate, including Brazil, Mexico and Colombia. We expect to meet our capital expenditure needs for the foreseeable future from our operating cash flow, our existing cash and cash equivalents, and with the net proceeds of this offering. Our future capital requirements will depend on several factors, including our growth rate, the expansion of our research and development efforts, employee headcount, marketing and sales activities, the introduction of new features to our existing products and the continued market acceptance of our products.

Tabular Disclosure of Contractual Obligations

The following is a summary of our contractual obligations as of December 31, 2020:

	Payments Due By Period as of December 31, 2020
	Less than 1 year		Over 1 year		Total
	(in US$ millions)
Instruments eligible as capital		—		26.5		26.5
Deposits(1)
Banking deposit receipt (Recibo de Depósito Bancário – RDB)		4,418.7		32.4		4,451.1
Banking deposit receipt (Recibo de Depósito Bancário Vinculado – RDB-V)		90.4		—		90.4
Time deposits		—		21.1		21.1
Borrowings and financing		69.8		33.5		103.3
Securitized borrowings		70.4		10.7		81.1
Senior preferred shares(2)		—		910.4		910.4
Total		4,649.3		1,034.6		5,683.9

(1)

Gross nominal outflows for deposits were calculated considering the exchange rate of R$5.1985 to US$1.00, the commercial purchase rate for U.S. dollars as of December 31, 2020 as reported by Bloomberg and the projected Brazilian CDI Rate as reported on the B3’s website, for the deposits.

(2)

For senior preferred shares, the calculation considers the payments in December 2026 when it is either converted into equity as per holder request or becomes an instrument similar to a perpetual bond.

Off-Balance Sheet Arrangements

As of March 31, 2021, December 31, 2020, 2019 and 2018, we did not have any off-balance sheet arrangements.

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Critical Accounting Estimates and Judgments

The preparation of financial statements requires judgments, estimates, and assumptions from management that affect the application of accounting policies, and reported amounts of assets, liabilities, revenue, and expenses. Actual results may diverge from these estimates, and estimates and assumptions are reviewed continuously. Revisions to the estimates are recognized prospectively.

Credit Losses on Financial Instruments

We recognize an ECL allowance on credit cards and loans receivables that represents our best estimate of allowance as of each reporting date. As our related provisions are forward looking – i.e. based on expected losses on credit limits when such limits are granted – we typically incur expenses relating to such provisions before revenue are generated with respect to such newly-granted limits.

We perform an analysis of the credit card and loan amounts to determine if impairment has occurred and to assess the adequacy of the allowance based on historical and current trends as well as other factors affecting credit losses.

Key Areas of Judgment

The critical judgments made by management in applying the ECL impairment methodology are: (i) definition of default; (ii) forward-looking information used to the projection of macroeconomic scenarios; (iii) probability weights of future scenarios; (iv) post-model adjustments; (v) definition of significant increase in credit risk and lifetime; and (vi) look-back period, used for parameters estimation: probability of default, exposure at default and loss given default.

Sensitivity Analysis

On December 31, 2020, the probability-weighted ECL allowance totaled US$243.8 million of which US$217.5 million related to credit card operations and US$26.2 million to loans. The ECL allowance is sensitive to the methodology, assumptions and estimations underlying its calculation. One key assumption is the probability weights of the macroeconomic scenarios. The table below illustrates the ECL that would have arisen if management had applied a 100% weighting to each macroeconomic scenario.

This sensitivity analysis does not consider the effects of post-model adjustments described below and was performed only for the Brazilian credit card and loan operations.

Upside

Base case

Downside

(in US$ millions)

Credit card and lending ECL

233.4

242.6

253.1

The table below discloses the forecast used in each scenario for the Brazilian ECL allowance:

		Upside				Base case				Downside
Brazilian GDP growth			6.7	%			3.5	%			0.4	%

Post-Model Adjustments

Throughout 2020, COVID-19 pandemic has drastically changed the credit risk of our portfolio. Credit risk metrics deteriorated at the beginning of the Brazil crisis, reaching their highest levels in April of 2020. Since then, we have been observing a constant improvement in delinquency and other risk indicators, the effect of which feeds through to the ECL calculated by the models.

We believe there is a risk that these improvements may only be temporary, and the situation could reverse with a possible second COVID-19 wave in Brazil and reductions in future government economic stimulus, a post-model adjustment was deemed necessary to take into account possible future deterioration, as shown below.

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	Modeled ECL		Post-model Adjustments		Total ECL
	(in US$ millions)
Credit card		168.7		48.8		217.5
Personal loan		23.9		2.3		26.2
Total		192.6		51.1		243.8

As of December 31, 2020, post-model adjustments amounted US$51.1 million, explained by three main assumptions:

the effect of government action of ceasing the payment of the “Emergencies Aid” to the dependent population, resulting in a risk deterioration similar to the observed at the beginning of the crisis;

a possible COVID-19 second wave and its future impacts in the population; and

a possible risk reversion to pre-crisis levels.

Share-Based Payments

We measure the costs of transactions with employees eligible to share-based remuneration based on the fair value of the ordinary share on the grant date. Estimating the fair value of share-based payment transactions requires determining the most appropriate valuation model to the ordinary share, options and other awards issued linked to the ordinary shares, which depends on the terms and conditions of each grant. The valuation model of the ordinary shares using one or a combination of a discounted cash flow model (CFM) and a reverse option pricing model (OPM) based substantially on the previous preferred share price transactions. This estimate also requires determining the most appropriate inputs for the SOPs, RSUs and Awards’ valuation models to determine the fair value of the ordinary shares, including the expected term, volatility and dividend yield for the Black-Scholes model applied to the SOPs, achievement of the market conditions to the Awards, and discount rates.

Key Areas of Judgment

The fair values of the SOPs, RSUs and Awards take into account, among other things, contract terms and observable market data, which includes a number of factors and judgments from management, as disclosed in note 9 of our audited consolidated financial statements. In exercising this judgment, a variety of tools are used including proxy observable data, historical data, and extrapolation techniques. Extrapolation techniques consider behavioral characteristics of equity markets that have been observed over time, and for which there is a strong case to support an expectation of a continuing trend in the future. Estimates are calibrated to observable market prices when they become available.

We believe our valuation methods are appropriate and consistent with other market participants. Nevertheless, the use of different valuation methods or assumptions, including imprecision in estimating unobservable market inputs, to determine the fair value of the SOPs, RSUs and Awards could result in different estimates of fair value.

Provision for Lawsuits and Administrative Proceedings

We and our subsidiaries are parties to lawsuits and administrative proceedings. Provisions are recognized for all cases representing reasonably estimated probable losses. The assessment of the likelihood of loss considers available evidence, the hierarchy of laws, former court decisions, and their legal significance, as well as internal and external legal counsel’s opinion, as applicable.

The provision mainly represents our best estimate of our future liability in respect of civil and labor complaints. Significant judgment by management is required in determining appropriate assumptions, which include the level of complaints expected to be received, of those, the number that will be upheld, and redressed (reflecting legal and regulatory responsibilities, including the determination of liability and the effect of the time bar). The complexity of such matters often requires the input of specialist professional advice in making assessments to produce estimates.

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The amount that is recognized as a provision can also be susceptible to the assumptions made in calculating it. This gives rise to a broad range of potential outcomes that require judgment in determining an appropriate provision level. We believe our valuation methods for contingent liabilities are appropriate and consistently applied through the periods.

Fair Value of Financial Instruments

The fair value of financial instruments, including derivatives that are not traded in active markets and convertible embedded derivatives in the senior preferred shares, is calculated by us using valuation techniques based on assumptions that consider market information and conditions.

The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted prices in active markets or observable market parameters. When quoted prices and observable data in active markets are not fully available, management judgment is necessary to estimate fair value.

Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. Management’s significant judgment may be required to determine whether certain financial instruments measured at fair value are classified as Level 2 or Level 3. For this determination, we consider all available information that market participants use to measure the fair value of the financial instrument, including observable market data, indications of market liquidity and orderliness, and the understanding of the valuation techniques and significant inputs used.

Based upon the specific facts and circumstances of each instrument or instrument category, judgments are made regarding the significance of the Level 3 inputs to the instruments’ fair value measurement in its entirety. If Level 3 inputs are considered significant, the instrument is classified as Level 3. The process for determining fair value using unobservable inputs is generally more subjective and involves a high degree of management judgment and assumptions.

More information about the significant unobservable inputs and other information are disclosed in note 24 to our audited consolidated financial statements included herein.

Recent Accounting Pronouncements

Certain IFRS standards and interpretations that have been issued but are not yet in effect could impact the presentation of our financial position or performance once they become effective in the future. For further information, see note 2 to our audited consolidated financial statements and note 3 to our unaudited condensed consolidated interim financial statements.

New standards, interpretations and amendments adopted in 2019

IFRIC 23—Uncertainty over income tax treatments

The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12—Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The interpretation specifically addresses the following: (i) whether an entity considers uncertain tax treatments separately; (ii) the assumptions an entity makes about the examination of tax treatments by taxation authorities; (iii) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and (iv) how an entity considers changes in facts and circumstances.

We determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and follow the approach that better predicts the resolution of the uncertainty. We applied the interpretation and it did not have a significant impact on our consolidated financial statements when applied on January 1, 2019.

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JOBS Act

We are an emerging growth company under the JOBS Act. The JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

Quantitative and Qualitative Disclosure About Market Risk

We are exposed to different risks arising from our activities. Risk monitoring adapts as new risks and threats emerge. Our main market risk factors are the interest rate risk and the exchange rate risk of its activities in Brazil, where our main operations are located. All financial instruments are classified in the banking book for risk management purposes.

Interest rate risk

Interest rate risk arises from our daily activities: credit card, personal loans, cash management and sources of funding. This risk is mitigated with our use of derivative instruments (interest rate risk swaps and futures). There is no material interest rate risk in currencies other than Brazilian reais.

The tables below show the sensitivities in the fair values of the financial instruments (assets, liabilities and derivatives), in two different scenarios: a standardized one, with a 1 bp (0.01% p.a.) shock and another with a 325 bps (3.25% p.a.) shock in the Brazilian risk-free interest curve. The shock of 325 bps was obtained by the difference of the SELIC rate forecasted in the BCB’s Focus report at the end of 2022 and the current SELIC rate. Such shocks are applied throughout the interest rate term structure (parallel shocks in all vertices of the interest curve).

Financial instruments have their fair values calculated under current conditions and also in each one of the two scenarios described. The sensitivity value is the difference between the fair value in each scenario and the fair value under normal market conditions. Positive values represent gains and negative values represent losses at fair values. For credit cards, fair value is calculated considering assets (receivables) and liabilities (payables), discounting expected cash flows (contractual cash flows minus expected defaults) to present values by applicable interest rates.

The sensitivity analyses as of March 31, 2021 are set forth below:

Sensitivities to 1 bp (0.01%) shocks

Tenor	Credit Card		Lending			Sov. Bonds			Derivatives			Debt Instruments		Instruments eligible to capital		Total
	(in US$ thousands)
0 to 6 Months		2		(4	)		—			—			1		—		(1	)
7 Months to 12 Months		1		(7	)		(8	)		13			1		—		—
1 year to 2 years		—		(8	)		(81	)		88			—		—		(1	)
2 years to 3 years		—		(1	)		(345	)		346			—		—		—
3 years to 4 years		—		—			(4	)		(1	)		—		5		—

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Tenor	Credit Card		Lending			Sov. Bonds			Derivatives		Debt Instruments		Instruments eligible to capital		Total
	(in US$ thousands)
4 years to 5 years		—		—			—			—		—		—		—
More than 5 Years		—		—			—			—		—		—		—
Total		3		(19	)		(438	)		447				5		—

Sensitivities to 325 bp (3.25%) shocks

Tenor	Credit Card		Lending			Sov. Bonds			Derivatives			Debt Instruments		Instruments eligible to capital		Total
	(in US$ thousands)
0 to 6 Months		697		(1,200	)		(18	)		118			328		—		(75	)
7 Months to 12 Months		326		(2,245	)		(2,426	)		4,113			172		—		(61	)
1 year to 2 years		20		(2,269	)		(25,358	)		27,649			60		—		101
2 years to 3 years		1		(138	)		(138	)		106,424			—		—		5
3 years to 4 years		—		—			—			(205	)		—		1,478		9
4 years to 5 years		—		—			—			—			—		—		(3	)
More than 5 Years		—		—			—			(35	)		—		—		(142	)
Total		1,043		(5,853	)		(135,384	)		137,991			560		150		(164	)

Foreign exchange rate risk

The functional currency of Nu Holdings Ltd. is the U.S. dollar. The functional currency of our subsidiaries is generally the currency of the country in which they are located.

We decided not to hedge our foreign exchange exposure originated by our investments in Brazil, Colombia and Mexico. As a result, our financial statements may present significant gains or losses due to translation of the financial statements of the subsidiaries due to the relevance of these operations compared to the operation of our own.

The table below shows possible impacts on the value of these investments, considering a shock of 7.7% in the U.S. dollars to Brazilian reais exchange rate and a 10% shock in the other exchange rates. The 7.7% shock was obtained by the relative difference between the exchange rate forecasted by the Central Bank of Brazil and its current value. The 10% shock was used as a standardized shock.

		Net Equity
Subsidiary	Country	As of March 31, 2021			Shock			Change
		(in US$)			(in percentage)			(in US$)
Nu Servicios	Mexico		(4,179	)		10.00	%		(417	)
Sofom	Mexico		(21	)		10.00	%		(2	)
Nu Tecnologia	Mexico		(7,680	)		10.00	%		(768	)
Nu Finaztechnologie	Germany		60			10.00	%		6
Nu Colombia	Colombia		(88	)		10.00	%		(8	)
Nu Argentina	Argentina		750			10.00	%		75
FIP – Brazil	Brazil		268,576			7.70	%		20,680
Total			257,418						19,564

The major foreign exchange exposure is originated by our investments in the Brazilian subsidiaries. Our Brazilian subsidiaries have operating costs in Brazilian reais, U.S. dollars and in Euros. The costs incurred in reais are not hedged by the subsidiaries nor by Nu Holdings. However, the costs in other currencies, e.g. U.S. dollars and Euros, or intercompany loans in U.S. dollars are hedged by our Brazilian subsidiaries with futures contracts, traded on the B3 exchange, at the beginning of each fiscal year, based on the then-existing projections of these costs. Hedge transactions are unwound as costs and loans are paid, and recalibrated when our internal cost projections

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change. As a result, the financial statements of the subsidiaries have minor exposures to foreign exchange rates after taking effect of the hedge transactions.

Other market risks

Although the risk related to changes in the fair value of our shares and its effects to the share-based compensation is discussed, we do not hedge these risks as it would be impracticable due to their nature and to the lack of instruments in the market. The risk arising from the share-based payments can be derived from the increase in expenses due to the issuance of new grants or appreciation of our share value.

Credit risk

We define credit risk mainly, as:

Counterparty risk: the possibility of failure to meet contractual obligations related to the settlement of transactions with financial assets, which also includes derivative financial instruments;

The possibility of losses associated with the failure of a signatory to loan operations to meet the financial obligations under the contractually agreed terms;

The possibility of depreciation or reduction in financial instruments expected earnings due to observed credit quality deterioration of a signatory to loan operations; and

The possibility of incurring any recovery cost related to the credit quality deterioration of a loan signatory or counterparty, such as disbursement to honor warranties, co-obligations and credit commitments or any forbearance cost of a financial instrument.

Our credit management structure is independent from the business units and provides processes and tools to measure, monitor, control and report the credit risk from all products, continuously verifying their adherence to the approved policies and risk appetite structure. Our credit risk management also assesses and monitors the impacts of potential changes in the economic environment in our credit portfolio to ensure that it is resilient to economic downturns.

We believe that our credit decision-making complies with our governance standards, as decisions are taken and approved according to their size and credit risk profile. Credit decisions approvals take place in committees, technical forums, and the designated decision forums, with the involvement of the first and second lines of defense. For the decision-making process, information arising from historical performance is presented and discussed using predictive models that analyze and score existing and potential customers based on their profitability and credit risk profile.

We use customers’ internal information, statistical models, external data, and other quantitative analyses to determine the risk profile of each customer in the portfolio. The information collected is used to manage the portfolio credit risk and to measure expected credit losses with periodical assessment of changes in the provision amounts. For more information on our methodology to measure credit allowances, see note 4 to our audited consolidated financial statements.

Regarding past due customers, their payment behavior is continuously tracked and monitored in order to improve policies and approaches to collect debt. Our collection strategies and policies depend on customer profiles and model scores and they aim to maximize the recovery amounts.

We also have limits for exposure to counterparty credit risk in cash or cash equivalents assets, aligned with our risk appetite statement. These limits are based on ratings from external rating agencies. Only part of the cash can be invested in assets with credit risk exposures. Exposures to issuers rated worse than AA+ on a local scale are not allowed.

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Liquidity risk

We define liquidity risk as the possibility that we will not be able to meet our current and future financial obligations when they fall due. There is a liquidity risk management and control structure in place, independent from the business units, which is responsible for the processes, assessments, monitoring, controlling, and reporting of liquidity risk, continuously verifying the adherence with the approved policies and limits structure.

Liquidity risk is monitored to ensure that we have sufficient high-quality liquid assets to withstand severe stress scenarios and also an adequate funding profile in terms of tenor, type, and counterparties.

The Contingency Funding Plan describes possible management actions that should be taken in the case of a deterioration of the liquidity indicators.

Market risk and interest rate risk in the banking book, or “IRRBB”

We define market risk as the risk of losses arising from movements in market prices, including the risks related to interest rates, equities, foreign exchange rates and commodities. IRRBB refers to the current or prospective risk to the bank’s capital and earnings arising from adverse movements in interest rates that can affect the bank’s banking book positions.

There is a market risk & IRRBB control and management structure, independent from the business units, which is responsible for the processes and tools to measure, monitor, control and report the market risk and IRRBB, which continuously verifies adherence with approved policies and limits.

Management of market risk and IRRBB is based on metrics that are reported to our ALM technical forum and to our risk committee. Our management team is authorized to use financial instruments as outlined in our internal policies to hedge market risk and IRRBB exposures.

Operational risk

We define operational risk as the possibility of losses resulting from external events or failure, weakness or inadequacy of internal processes, people, or systems. It includes legal risk associated with the lack or deficiency in contracts, our failure to comply with applicable legal provisions and indemnities for damages to third parties arising from our activities.

We have an operational risk and internal controls structure, which is responsible for the identification and assessment of operational risks, as well as the evaluation of the design and effectiveness of our internal controls structure. This structure is also responsible for the preparation and periodic testing of our business continuity plan and for coordinating the risk assessment in new product launches and significant changes in existing processes.

As part of our first line of defense and within our risk management process, each business area has mechanisms for identifying, measuring, evaluating, monitoring, and reporting operational risk events, as well as disseminating the control culture to other collaborators internally. Material risk assessments are presented to our operational risk and internal controls technical forum, as well as to our risk committee. Applicable improvement recommendations are expected to become action plans including deadlines and responsibilities. Our first line of defense teams have the main responsibility for the development and implementation of controls to mitigate operational risks.

Information technology risk

We define information technology, or “IT,” risk as the undesirable effects arising from a range of potential threats to our information technology infrastructure, including cybersecurity (occurrence of information security incidents), incidents management (ineffective incidents/problem management process, impact on service levels, costs and customer dissatisfaction), data management (lack of compliance with data privacy laws or gaps in data management governance or data leakage issues), among others.

As we operate in a challenging cyber threat environment, we continuously invest in controls and technologies to defend against these threats. IT risks, including cybersecurity risks, are one of our priorities. Thus, we have a dedicated IT risk structure, which is part of the second line of defense. This team is independent from IT-related areas, including engineering, IT Operations, and information security.

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Our IT risk team is responsible for identifying, assessing, measuring, monitoring, controlling, and reporting IT risks based on risk appetite levels approved by our board of directors. We assess our risk exposure to threats and their potential impacts on our business and our customers on an ongoing basis. We strive to improve our IT and cybersecurity features and controls, as well as, ensuring that our employees and third-party contributors remain aware of prevention measures and also know how to report incidents, given that people are a key component of our security strategy.

The results of our IT risk and controls assessments are regularly discussed at our IT risk technical forum, as well as presented to our risk committee. Applicable improvement recommendations are expected to become action plans including deadlines and responsibilities.

Capital management

The purpose of capital management is to estimate the future requirements of regulatory capital, based on our growth projections, risk exposure, market movements and other relevant information. Also, our capital management structure is responsible for identifying sources of capital, for writing and submitting the capital plan for approval, as well as for monitoring the current level of the regulatory capital ratios.

At the executive level, our ALM technical forum is responsible for approving risk assessment and capital calculation methodologies, as well as reviewing, monitoring, and recommending capital-related action plans to our risk committee.

Minimum capital requirements

Currently, only our Brazilian subsidiaries below must comply with regulatory capital requirements:

Nu Financeira – minimum level of capital, considering the minimum requirements for financial institutions according to CMN Resolution No. 4,193/13.

Nu Pagamentos – minimum level of capital, considering the minimum requirements for payment institutions, according to the Central Bank of Brazil’s Circular No. 3,681/13.

According to our strategy, we implemented a capital management structure aiming to maintain a higher level of capital than the minimum regulatory requirements. Additionally, we have started operations in Mexico and Colombia and will comply with local rules as soon as regulatory requirements are applicable in these jurisdictions.

Material Weakness in Internal Controls and Remediation

As mentioned elsewhere in this prospectus, prior to this offering, Nu was a private company with its main operation in Brazil and regulated by the Central Bank of Brazil. This regulated environment requires Nu to maintain a management risk process framework and internal control environment that cover several risks, including disclosure controls and procedures and internal control over financial reporting, in accordance with the standards required under Brazilian law. In mid-2020, though we believed our internal controls processes were considered adequate for our operating environment at that time, our management decided to review our policies and procedures seeking to implement industry best practices for financial, operational and technological processes. We then began the process of reviewing our existing controls and implementing additional ones and determined to implement internal controls processes based on the requirements of the Sarbanes-Oxley Act of 2002, or “SOX,” applicable to public companies. This decision, in addition to improving organizational performance and corporate governance through enhanced internal controls while we were still a private company, was also taken to demonstrate our commitment to protecting future stakeholders in anticipation of the possibility of becoming a public company.

Since mid-2020, we have hired experienced personnel in several teams, most notably in internal controls and finance, and engaged external consultants that have assisted us in reviewing our internal control over financial reporting framework. Our management has not completed an assessment of the effectiveness of our internal control over financial reporting under SOX, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, as part of our management’s review noted above and in connection with the audit of our consolidated financial statements for the year ended December 31, 2020, we identified certain material weaknesses in our internal control over financial reporting. As of the date of this

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prospectus, we have determined action plans to remediate and expect them to be implemented during 2021, with respect to the material weaknesses, which we expect to include the hiring of additional experienced key personnel in our financial reporting function, implementing new processes and procedures, improving our internal controls to provide additional levels of review, enhancing our documentation practices, implementing new software solutions and increasing our personnel training. We cannot assure you that the measures we have taken to date and actions we may take in the future will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. For additional information, see “Risk Factors—Certain Risks Relating to our Business—We have identified material weaknesses in our internal control over financial reporting for the year ended December 31, 2020 and, if we fail to remediate such deficiencies (or identify and remediate other material weaknesses) and maintain effective internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.”

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Regulatory Overview

Brazil

Our Regulatory Position

Four of our subsidiaries in Brazil, Nu Pagamentos S.A. – Instituição de Pagamento, or “Nu Pagamentos,” Nu Financeira S.A. – Sociedade de Crédito, Financiamento e Investimento, or “Nu Financeira,” Nu Distribuidora de Títulos e Valores Mobiliários Ltda., or “Nu DTVM,” and Easynvest – Título, Corretora de Valores S.A., or “NuInvest,” perform activities that are subject to regulation in Brazil enacted by the Central Bank of Brazil, by CMN and/or by CVM, as applicable and have obtained licenses from the Central Bank of Brazil to operate, as follows:

Nu Pagamentos is authorized by the Central Bank of Brazil to operate as a payment institution in the capacities of (1) issuer of post-paid payment instruments (emissor de instrumento de pagamento pós-pago), (2) issuer of electronic currency (emissor de moeda eletrônica) and (3) payment initiation service provider (iniciador de transação de pagamento);

Nu Financeira is authorized by the Central Bank of Brazil to operate as a credit, financing and investment entity (sociedade de crédito, financiamento e investimento), carrying out active, passive and ancillary transactions inherent to credit, financing and investment portfolios;

Nu DTVM is authorized by the Central Bank of Brazil to operate as a securities distributor (distribuidora de títulos e valores mobiliários, or “DTVM”), performing the activities provided in CMN Resolution No. 1,120, of April 4, 1986, as amended, or “Resolution No. 1,120/86”; and

NuInvest is also authorized by the Central Bank of Brazil to operate as a securities broker (corretora de títulos e valores mobiliários, or “CTVM”), performing the activities provided in CMN Resolution No. 1,655, of October 26, 1989, as amended, or “Resolution No. 1,655/89.”

In addition, three of our subsidiaries, Nu Investimentos Ltda., or “Nu Asset Management,” NuInvest, Easynvest Gestão de Recursos Ltda., or “Easynvest Asset Management” and Vérios Gestão de Recursos S.A., or “Verios Asset Management” are subject to regulation in Brazil enacted by the CVM and are authorized to provide securities portfolio management services.

One of our subsidiaries, Easynvest Corretora de Seguros Ltda., or “Easynvest Insurance Broker,” performs activities that are subject to regulation enacted by SUSEP. As required by the applicable regulation, it has obtained authorization to operate from SUSEP as an insurance brokerage firm.

None of our Brazilian subsidiaries is licensed to operate as a bank.

Regulatory Environment in Brazil

Our main subsidiaries in Brazil are subject to extensive regulation, such as those applicable to payment institutions (in case of Nu Pagamentos), financial institutions (in the case of Nu Financeira, Nu DTVM and NuInvest), securities and brokers (in the case of Nu DTVM and NuInvest), securities portfolio managers (in the case of Nu Asset Management, Easynvest Asset Management and Verios Asset Management) and insurance brokers (in the case Easynvest Insurance Broker).

We offer various payment, financial and capital markets services; in particular, we conduct activities related to payments, digital accounts, brokerage services, portfolio management and insurance.

Legislation Applicable to the Brazilian Payment System

General

The activities carried out by Nu Pagamentos in Brazil, are subject to Brazilian laws and regulations applicable to payment institutions, particularly Law No. 12,865 of October 9, 2013, or the “Payments Law,” which, in a

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nutshell, regulates payment institutions and payment schemes that are part of the Brazilian Payment System (the Sistema de Pagamentos Brasileiro, or the “SPB”).

Payment Institutions

A payment institution is defined as the legal entity that participates in one or more payment schemes and is dedicated, exclusively or not, to the execution of remittance of funds, among other activities, as described in Payments Law.

Specifically, based on the Brazilian payment regulations, payment institutions are entities that can be classified into one of the following three categories:

Issuers of electronic currency (prepaid payment instruments): these payment institutions manage prepaid payment accounts , enable the execution of payment transactions using electronic currency held in such prepaid payment accounts, and convert the funds held therein into physical or book-entry currency or vice versa.

Issuers of post-paid payment instruments (e.g., credit cards): these payment institutions manage payment accounts that enable end-users to make payments on a post-paid basis.

Acquirers: these payment institutions do not manage payment accounts, but (i) enable merchants to accept payment instruments issued by a payment institution or by a financial institution that participates in the same payment scheme; and (ii) participate in the settlement process of payment transactions as creditor of the issuer of the payment instrument.

Payment initiation service providers (PISP): these payment institutions render initial payment services whereby they do not (1) manage the payment or checking account from which the payment is executed; nor (2) hold the transferred funds during the rendering of their services.

Payment institutions that operate in Brazil must comply with many legal and regulatory requirements set forth by CMN and the Central Bank of Brazil, as applicable, which may vary according to certain features of their specific business models and to thresholds defined by the regulation, such as the volume of payment transactions processed and/or the amount of funds held in prepaid payment accounts during the previous twelve months.

Therefore, certain payment institutions may not be subject to the full legal and regulatory framework applicable to the payment industry in Brazil such as the ones that only participate in limited-purpose payment schemes or provide services in the scope of programs set up by governmental authorities aimed at granting benefits to individuals due to employment relationships.

CMN and Central Bank of Brazil regulations applicable to payment institutions cover a wide variety of matters, including, but not limited to risk management, governance, anti-money laundering and combating the financing of terrorism, cybersecurity, secrecy, ombudsman, internal audit, reporting obligations and governance. In addition, payment institutions must seek approval from the Central Bank of Brazil when appointing managers (including directors, officers and members of certain statutory boards, such as fiscal councils). The regulations applicable to payment institutions also cover “payment accounts” (contas de pagamento), which are the end-user accounts, in registered (i.e., book-entry) form, which are opened with payment institutions that are card issuers of prepaid or post-paid instruments and used for carrying out each payment transaction. Current regulations classify payment accounts into two types:

Prepaid payment accounts: where the intended payment transaction is executed when the funds have been deposited into the payment account in advance; and

Post-paid payment accounts: where the payment transaction is intended to be performed regardless of funds having been deposited into the payment account in advance.

In order to provide protection from bankruptcy, Payments Law requires payment institutions that issue electronic currency to segregate the funds deposited in prepaid payment accounts from their own assets. In addition, with respect to prepaid electronic currency, the payment institutions must hold all the funds deposited in the prepaid

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payment account in certain specified instruments: either (1) in a specific account with the Central Bank of Brazil that does not pay interest; or (2) in federal government bonds registered with the SELIC.

Payment Schemes

According to the Payments Law, a payment scheme, for Brazilian regulatory purposes, is the collection of rules and procedures that governs payment services provided to the public, with direct access by its end-users (i.e., payers and receivers). In addition, such payment services must be accepted by more than one receiver in order to qualify as a payment scheme. The regulations applicable to payment schemes depend on certain features, such as the volume of users and the amount of transactions processed therein:

Payment schemes that exceed certain thresholds are considered part of SPB and are subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain a license to operate by the Central Bank of Brazil.

Payment schemes that operate below these thresholds are not considered to form part of the SPB and are therefore not subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain an authorization from the Central Bank of Brazil, although they are required to report certain operational information to the Central Bank of Brazil on an annual basis.

Limited-purpose payment schemes are not considered to form part of the SPB and, therefore, are not subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain authorization from the Central Bank of Brazil. Limited-purpose payment schemes are, for instance, those whose payment orders are: (i) accepted only at the network of merchants that clearly display the same visual identity as that of the issuer, such as franchisees and other merchants licensed to use the issuer’s brand; (ii) intended for payment of specific public utility services, such as public transport and public telecommunications; or (iii) accepted exclusively within a closed-loop payment scheme and for the payment of one type of product or service, of a restricted set of products or services related with a specific activity or market.

Certain types of payment schemes have specific exemptions from the requirement to obtain authorization from the Central Bank of Brazil. This applies, for example, to payment schemes set up by governmental authorities, payment schemes set up by certain financial institutions, payment schemes aimed at granting benefits to natural persons due to employment relationships and payment schemes set up by an authorized payment institution.

Payment Scheme Settlor

A payment scheme is set up and operated by a payment scheme settlor, which is the entity responsible for the payment scheme’s authorization and function. Payment scheme settlors, for Brazilian regulatory purposes, are the legal entities responsible for managing the rules, procedures and the use of the brand associated with a payment scheme. Central Bank of Brazil regulations require that payment scheme settlors must be (i) incorporated in Brazil, (ii) have a corporate purpose compatible with its payments activities; and (iii) have the technical, operational, organizational, administrative and financial capacity to meet their obligations. They must also have clear and effective corporate governance mechanisms that are appropriate for the needs of payment institutions and the users of payment schemes.

Legislation Applicable to Financial Institutions and Portfolio Managers

General Rules

Law No. 4,595, of December 31, 1964, as amended, or the “Banking Law,” laid out the structure of the Brazilian National Financial System, made up of the CMN, the Central Bank of Brazil, Banco do Brasil S.A., the National Bank for Economic and Social Development, or the “BNDES,” and other public or private financial institutions.

Law No. 4,728 of July 14, 1965, as amended, or “Law No. 4,728/65,” regulates Brazilian capital markets through setting standards and various other mechanisms. Further, pursuant to Law No. 6,385 of December 7, 1976,

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as amended, or “Law No. 6,385/76,” the distribution and issuance of securities in the market, trading of securities and settlement and/or clearance of securities transactions all require prior authorization by the CVM.

The financial and capital markets regulatory frameworks in Brazil are further supplemented by the regulation enacted by CMN, CVM and/or the Central Bank of Brazil, as applicable, as well as to self-regulation policies, such as those enacted by various associations, over-the-counter organized markets and securities exchanges, that govern their members and participants, (for example, B3, the Brazilian Association of Financial and Capital Markets Entities, or “ANBIMA,” and the Brazilian Association of Investment Analysts, or “APIMEC”).

The incorporation and operation of financial institutions and other regulated entities that intend to operate in the Brazilian financial and/or capital markets are subject to prior licensing, regulation and oversight from the Central Bank of Brazil. Other corporate events may also require prior authorization from such authorities, for example capital increases, appointment of officers, changes in corporate control, among others, as the case may be. Financial institutions in Brazil can operate under various forms—such as commercial banks, investment banks, credit, financing and investment companies, cooperative banks, leasing companies, securities brokerage companies, securities distributor companies, real estate credit companies, mortgage companies, among others—all of which are regulated by different rules issued by the CMN, the Central Bank of Brazil, and, if such financial institutions participate in capital markets activities, the CVM. In addition, like financial institutions, stock exchanges are also subject to CMN, the Central Bank of Brazil, and the CVM approval and regulation as well in accordance with Law No. 4,728/65.

Pursuant to Banking Law, CMN Resolution No. 4,122 of August 2, 2012, as amended, or “CMN Resolution No. 4,122,” financial institutions must seek approval from the Central Bank of Brazil, and, in certain cases, the CVM when appointing managers (including directors, officers and members of certain statutory boards, such as fiscal councils). Moreover, according to Law No. 4,728/65, for securities brokerage firms, managers are subject to further restrictions and are prohibited from working for or fulfilling any administrative, advisory, tax or decision-making positions at entities listed on the Brazilian stock exchange. In addition, managers of securities brokerage firms are prohibited from filling managerial functions in other brokerage firms authorized to carry out foreign exchange transactions pursuant to CMN Resolution No. 1,770, of November 28, 1990.

In addition, according to the Banking Law, Brazilian financial institutions have limits to grant loans or cash advances to their managers (officers, directors, and members of advisory boards, as well as their relatives). Such restrictions are set forth in CMN Resolution No. 4,693 of October 29, 2018.

Credit, financing and investment institutions (consumer credit companies)

Credit, financing and investment institutions (sociedades de crédito, financiamento e investimento), such as Nu Financeira, also known as “financeiras,” or SCFI, are financial institutions part of the national financial system and are subject to regulation by and the oversight of the CMN and the Central Bank of Brazil. They were established by the Ordinance of Ministry of Finance No. 309, on November 30, 1959 and are private financial institutions whose basic objective is to carry out financing for the acquisition of goods and services, as well as for working capital. Consumer credit companies must be organized as a corporation (sociedade por ações) and its corporate name must include the expression “Crédito, Financiamento e Investimento” (credit, financing and investment).

A SCFI is not allowed to offer deposit accounts. However, such institutions can raise funds through the acceptance and placement of time deposits with special guarantee from the Credit Guarantee Fund (FGC), known as DPGE (Depósito a Prazo com Garantia Especial do FGC), interbank deposits, agribusiness bill of credit, known as LCA (Letra de Crédito do Agronegócio), financial bill of exchange, known as LF (Letra Financeira), guaranteed real estate bill, known as LIG (Letra Imobiliária Garantida) and repurchase transaction. More recently, with the enactment of CMN Resolution No. 4,812, of April 30, 2020, the Central Bank of Brazil determined that SCFIs may also raise funds through bank deposit receipts, known as RDB (Recibo de Depósito Bancário) and allowed them to also raise funds through bank deposit certificates, known as CDB (Certificado de Depósito Bancário). Both RDB and CDB are fixed income securities – the main difference between the two securities lies in the fact that the CDB can be traded before maturity, while the RDB is nontransferable and not allowed to be traded.

Many credit, financing and investment institutions operate as the financial branch of non-banking economic groups. In our case, Nu Financeira provides financing to our credit card, personal loan to our customers and issues instruments such as RDB, in order to provide funding to our operation.

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Securities Brokerage Firms

Securities trading in stock exchange markets shall be carried out exclusively by DTVMs, CTVMs (such as Nu DTVM and NuInvest) and certain other authorized institutions. Securities distributors (distribuidoras de títulos e valores mobiliários) are regulated by Resolution No. 1,120/86 and securities brokers (corretoras de títulos e valores mobiliários) are regulated by Resolution No. 1,655/89. With Central Bank of Brazil and CVM’s joint decision No. 17, of March 2, 2009, which authorized distributors to operate directly in the environments and trading systems of organized stock exchange markets, the main difference between securities brokers and securities distributors was extinguished, and such institutions are today allowed to perform practically the same operations.

In this regard, both Resolution No. 1,120/86 and Resolution No. 1,655/89 allow brokerage firms to participate, among others, in the following activities: (1) trading in stock exchanges; (2) managing investment portfolios; and (3) providing custody services. In addition to Resolution No. 1,120/86 and Resolution No. 1,655/89, brokerage firms are subject to regulations from the CVM.

Under the rules set forth by the Central Bank of Brazil, brokerage firms (such as Nu DTVM and NuInvest) cannot execute transactions that may result in loans, facilities or cash advances to their customers, including through synthetic transactions (such as an assignment of rights), with the exception of margin transactions and other limited transactions.

Moreover, brokerage firms can neither charge commissions in connection with trades during primary distribution, nor purchase real property, except for their own use or as payment under “bad debts” (in which case, the asset must be sold within a year).

Third-Party Asset Management

Nu Asset Management, Easynvest Asset Management and Verios Asset Management are asset managers licensed to operate by, and subject to the rules and oversight of, the CVM, pursuant to Law No. 6,385/76 and CVM Resolution No. 21 of February 25, 2021, as amended, or “CVM Resolution No. 21.”

CVM Resolution No. 21 defines asset/portfolio management activities as professional activities directly or indirectly related to the operation, maintenance and management of securities portfolios, including the investment of funds in the securities market on behalf of customers.

CVM Resolution No. 21 provides for two categories of asset managers: (1) trustee administrator and/or (2) portfolio manager. Nu Asset Management, Easynvest Asset Management and Verios Asset Management are registered as portfolio managers. In order to be authorized by the CVM to engage in such activity, legal entities that operate as asset managers must (1) have a registered office in Brazil; (2) have securities portfolio management as a corporate purpose and be duly incorporated and registered with the National Register of Legal Entities – CNPJ; (3) have one or more officers duly certified as asset managers as approved by CVM to take on liability for securities portfolio management, pursuant to CVM Resolution No. 21; (4) appoint an officer responsible for the portfolio management activities, a compliance officer and a risk management officer; (5) be controlled by reputable shareholders (direct and indirect), who have not been convicted of certain crimes detailed in article 3, VI of CVM Resolution No. 21; (5) who is not unable or suspended from occupying a position in financial institutions or other entities authorized to operate by the CVM, the Central Bank of Brazil, SUSEP or PREVIC, and have not been banned from asset management activities by judicial or administrative decisions; (6) put in place and maintain personnel and IT resources appropriate for the size and types of investment portfolio it manages; and (7) execute and provide the applicable forms to the CVM so as to prove its capacity to carry out such activities, pursuant to CVM Resolution No. 21.

Under CVM Resolution No. 21, asset management must, among other requirements, conduct their activities in good faith, with transparency, diligence and loyalty with respect to their customers and perform their duties with the aim of achieving their investment objectives. This same regulation requires asset managers to maintain a website, with extensive current information, including, but not limited to (1) an updated annual filing form (formulário de referência); (2) a code of ethics; (3) rules, procedures and a description of internal controls in order to comply with CVM Resolution No. 21; (4) a risk management policy; (5) a policy of purchase and sale of securities by managers, employees and the company; (6) a pricing manual for assets from the securities portfolios managed by such asset

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manager, even if the manual has been developed by a third party; and (7) a policy of apportionment and division of orders among the securities portfolios.

Moreover, under CVM Resolution No. 21, asset management firms are forbidden from (1) making public assurances of profitability levels based on the historical performance of portfolio and market indexes; (2) modifying the basic features of the services they provide without following the prior appropriate procedures under the asset management agreement and regulations; (3) making promises as to future results of the portfolio; (4) contracting or granting loans on behalf of their customers, subject to certain exceptions set out in regulation; (5) providing a surety, corporate guarantee, acceptance or becoming a joint obligor in any other form, with respect to the managed assets; (6) neglecting, under any circumstances, customers’ rights and intentions; (7) trading the securities from the portfolios they manage with the purpose of obtaining brokerage revenue or rebates for themselves or third parties; or (8) subject to certain exceptions set out in the regulation, acting as a counterparty, directly or indirectly, to customers.

Insurance Brokerage Firms

Insurance brokerage firms, such as Easynvest Insurance Broker must obtain SUSEP registration and authorization for their operations, pursuant to the rules in force and in accordance with Law No. 4,594 of December 29, 1964, as amended, or “Law No. 4,594/64,” and Decree-Law No. 73/66 (as well as regulation issued by the National Private Insurance Council (Conselho Nacional de Seguros Privados), or “CNSP” and the Brazilian Superintendence of Private Insurance (Superintendência de Seguros Privados), or “SUSEP”). The insurance broker, whether an individual or legal entity, is the intermediary legally authorized to solicit and promote insurance contracts accepted by the current legislation, between the insurance companies and individuals or public or private legal entities. Only duly qualified insurance brokers pursuant to Law No. 4,594/64 and applicable SUSEP and CNSP regulation that have executed an insurance tender shall be paid the brokerage fees related to each insurance line, based on the respective tariffs, including in case of adjustment to the issued premium.

Under the applicable regulation, insurance brokerage firms such as Easynvest Insurance Broker, are obligated to prove technical certification of all their employees and workers who directly participate in the regulation and settlement of insurance claims, customer service, and direct sales of insurance, capitalization and open supplementary pension products. Such certification shall be provided by an institution of recognized technical capacity, duly accredited by SUSEP.

Insured persons and insurance firms can pursue civil action against insurance brokers for losses incurred as a result of intentional malfeasance or negligence caused by brokerage activity. In case of non-compliance with the regulatory rules, in addition to the legal sanctions, insurance brokers and managers are subject to fines, temporary suspension from the exercise of the profession or registration cancellation.

Main Regulatory Authorities in Brazil

National Financial System

The main regulatory authorities in the Brazilian financial system are CMN, the Central Bank of Brazil and CVM. In addition, most Brazilian securities brokers, securities distributors and asset managers are associated with and subject to the self-regulatory rules issued by ANBIMA.

In addition, trading segments managed by B3 are self-regulated and supervised by BSM – Supervisão de Mercados, or “BSM,” a non-profit organization that forms part of the B3 group.

We present below a summary of the main duties and powers of each regulatory agent, ANBIMA and BSM.

CMN

CMN is the main monetary and financial policy authority in Brazil, responsible for creating financial, credit, budgetary and monetary rules.

The current Brazilian banking and financial institutional system was established by Law No. 4,595 of December 31, 1964, as amended, or the “Banking Law.”

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According to Banking Law, the CMN’s main responsibilities are to oversee the regular organization, operation and inspection of entities that are subject to the Banking Law, as well as the enforcement of applicable penalties. In addition, Law No. 4,728/65 delegates to the CMN the power to set general rules for underwriting activities for resale, distribution or intermediation in the placement of securities, including rules governing the minimum regulatory capital of the companies that contemplate the underwriting for resale and distribution of instruments in the market and conditions for registration of the companies or individual firms which contemplate intermediation activities in the distribution of instruments in the market. The CMN has the power to regulate credit transactions involving Brazilian financial institutions and Brazilian currency, supervise the foreign exchange and gold reserves of Brazil, establish saving and investment policies in Brazil and regulate the Brazilian capital markets. The CMN also oversees the activities of the Central Bank of Brazil, the CVM and SUSEP. Other CMN responsibilities include:

coordinating monetary, credit, budget and public debt policies;

establishing policies on foreign exchange and interest rates;

seeking to ensure liquidity and solvency of financial institutions;

overseeing activities related to the stock exchange markets;

regulating the structure and operation of financial institutions;

granting authority to the Central Bank of Brazil to issue currency and establish reserve requirement levels; and

establishing general guidelines for the banking and financial markets.

Central Bank of Brazil

The activities of financial institutions are subject to limitations and restrictions. The Central Bank of Brazil is responsible for (1) implementing those CMN policies that are related to monetary, credit and foreign exchange control matters; (2) regulating Brazilian financial institutions in the public and private sectors; and (3) monitoring and regulating foreign investments in Brazil. The President of the Central Bank of Brazil is appointed by the President of Brazil (subject to ratification by the Senate) for an indefinite term.

The Banking Law delegated to the Central Bank of Brazil the responsibility of permanently overseeing companies that directly or indirectly interfere in the financial and capital markets, controlling such companies’ operations in the foreign exchange market through operational proceedings and various modalities, and supervising the relative stability of foreign exchange rates and balance of payments. In addition, Law No. 4,728/65 states that the CMN and the Central Bank of Brazil shall exercise their duties related to the financial and capital markets with the purpose of, among other things, facilitating the public’s access to information related to bonds or securities traded in the market and on the companies that issue them, protecting investors against illegal or fraudulent issuances of bonds or securities, preventing fraud and manipulation modalities intended to create artificial conditions of the demand, supply or pricing of bonds or securities distributed in the markets and ensuring the observance of equitable commercial practices by all of those professionals who participate in the intermediation of the distribution or trading of bonds or securities. The Central Bank of Brazil has authority over brokerage firms, financial institutions, companies or individual firms performing underwriting for resale and distribution of bonds or securities, and maintains a record on, and inspects the transactions of, companies or individual firms that carry out intermediation activities in the distribution of bonds or securities, or which conduct, for any purposes, the prospecting of popular savings in the capital market.

Other important responsibilities of the Central Bank of Brazil are as follows:

controlling and approving the organization, operation, transfer of control and corporate reorganization of financial institutions and other institutions authorized to operate by the Central Bank of Brazil;

managing the daily flow of foreign capital and derivatives;

establishing administrative rules and regulation for the registration of foreign investments;

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monitoring remittances of foreign currency;

controlling the repatriation of funds (in case of a serious deficit in Brazil’s payment balance, the Central Bank of Brazil may limit remittances of profits and prohibit remittances of capital for a limited period);

receiving compulsory collections and voluntary deposits in cash from financial institutions;

executing rediscount transactions and granting loans to banking financial institutions and other institutions authorized to operate by the Central Bank of Brazil;

intervening in the financial institutions or placing them under special administrative regimes, and determining their compulsory liquidation; and

acting as depositary of the gold and foreign currency.

CVM

The CVM is a federal authority responsible for implementing the CMN’s policies related to the Brazilian capital market and for regulating, developing, controlling and inspecting the securities market.

The main responsibilities of the CVM are the following:

regulating the Brazilian capital markets, in accordance with Brazilian corporation law and securities law;

setting rules governing the operation of the securities market;

defining the types of financial institutions that may carry out activities in the securities market, as well as the kinds of transactions that they may perform and services that they may provide in such market;

controlling and supervising the Brazilian securities market through, among others:

the approval, suspension and delisting of publicly held companies;

the authorization of brokerage firms to operate in the securities market and public offering of securities;

the supervision of the activities of publicly held companies, stock exchange markets, commodities and futures markets, financial investment funds and variable income funds;

the requirement of full disclosure of relevant events that affect the market, as well as the publication of annual and quarterly reports by publicly held companies;

the imposition of penalties; and

permanently supervising the activities and services of the securities market, as well as the dissemination of information related to the market and the amounts traded therein, to market participants.

The CVM has jurisdiction to regulate and supervise financial investment funds and derivatives markets, a role previously fulfilled by the Central Bank of Brazil. Pursuant to Law No. 10,198 of February 14, 2001, as amended, and Law No. 10,303 of October 31, 2001, the regulation and supervision of both financial mutual funds and variable income funds and of transactions involving derivatives were transferred to the CVM. In compliance with the Brazilian legislation, the CVM is managed by a President and four officers, all of whom are appointed by the President of the Republic (and approved by the Senate). The persons appointed to the CVM shall have strong reputations and be recognized as experts in the capital markets sector. CVM officers are appointed for a single term of office of five years, and one-fifth of the members shall be renewed on an annual basis.

Brazilian Payments System

Our activities carried out by Nu Pagamentos are subject to Brazilian laws and regulations relating to payment institutions set forth in Payments Law.

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Payments Law gave the Central Bank of Brazil, in accordance with the guidelines set out by the CMN, and the CMN, authority to regulate entities involved in the payments industry. Such authority covers matters such as the operation of these entities, authorization to operate, approval of appointed managers (directors and officers), risk management structures, the opening of payment accounts, and the transfer of funds to and from payment accounts. After the enactment of Payments Law, the CMN and the Central Bank of Brazil created a regulatory framework regulating the operation of payment schemes and payment institutions, which are still evolving.

In this regard, the main responsibilities of Central Bank of Brazil in relation to the Brazilian payment system are the following:

regulate the setup, operation and monitoring of payment institutions and payment schemes;

authorize the setup of payment schemes;

to authorize the setup, operation, transfer of control, merger, spin-off and consolidation of payment institutions;

set up the conditions and authorize the appointment of managers in payment institutions (directors and managers);

supervise the payment institutions and payments schemes and apply sanctions when due;

adopt preventive measures with a view to ensuring the soundness, efficiency and ongoing operation of payment schemes and of payment institutions;

adopt measures aimed at greater competition, financial inclusion and transparency in the provision of payment services; and

regulate the collection of fees, commissions or other consideration for payment services, including those charged among members of the same payment arrangement.

Pension and Insurance

SUSEP and CNSP

In Brazil, the regulation of insurance, co-insurance, retrocession, capitalization, supplementary pension schemes and brokerage is carried out by CNSP and SUSEP.

SUSEP is an independent agency in charge of implementing and conducting the policies established by CNSP and the supervision of the insurance, co-insurance, retrocession, capitalization, supplementary pension schemes and brokerage. SUSEP neither regulates nor supervises (1) the supplementary pension entities that are regulated by the SPC; and (2) the operators of private healthcare assistance plans, which are regulated by ANS. With the enactment of Supplementary Law No. 126 on January 15, 2007, the CNSP and SUSEP are also responsible for the regulation of the Brazilian reinsurance market.

CNSP is made up of one representative of each one of the following bodies: Ministry of Social Security, the Central Bank of Brazil, Ministry of Economy, Ministry of Justice, the CVM and the superintendent of SUSEP – Private Insurance Authority.

The supplementary insurance and pension sectors in Brazil are subject to overlapping regulations. Decree-Law No. 73 of November 21, 1966, as amended, sought to centralize the legislation and inspection activities in the sector by creating the National Private Insurance System – SNSP, composed of (1) CNSP; (2) SUSEP; (3) insurance companies duly authorized to operate in the private insurance market; (4) the reinsurance companies; and duly qualified and/or registered insurance brokers. CNSP is linked to the Ministry of Economy and its main roles include: establishing the guidelines and rules for the private insurance policy in Brazil; regulating the incorporation, organization, operations, and inspection of insurers, reinsurers, supplementary open pension funds, and capitalization companies, as well as establishing capital thresholds for such entities; establishing the general characteristics of insurance and reinsurance contracts; establishing general guidelines for insurance, reinsurance,

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supplementary open pension funds, and capitalization operations; establishing general accounting and statistical rules, as well as legal, technical, and investment limits for the operations of insurers, reinsurers, supplementary open pension funds, and capitalization companies; and regulating insurance and reinsurance broker activities and profession.

SUSEP’s main roles include: processing application requests of incorporation, organization, operations, and inspecting insurers, reinsurers, supplementary open pension funds, and capitalization companies; issuing instructions and circular letters in connection with the regulation of insurance, reinsurance, supplementary open pension funds, and capitalization operations, in accordance with CNSP guidelines; setting forth the conditions of insurance plans to be used by the insurer market; approving limits for the operations of supervised companies; authorizing the use and release of assets and amounts given in guaranty for technical provisions and discretionary capital; inspecting and implementing the general accounting and statistical rules set forth by CNSP; inspecting the operations of supervised companies; and conducting the liquidation of supervised companies.

Self-Regulatory Entities

ANBIMA

ANBIMA is a private self-regulatory association of investment banks, asset managers, securities brokers and investment advisers, which, among other responsibilities, establishes rules as well as codes of best practices for the Brazilian capital market, including punitive measures in case of non-compliance with its rules.

BSM

BSM conducts market surveillance by monitoring transactions, orders and trades executed in B3 trading environments, supervises market participants, provides compensation for losses up to a certain threshold and, if necessary, initiates punitive administrative proceedings and enforces sanctions against those who infringe the applicable regulations.

Working in close collaboration with CVM and the Central Bank of Brazil, BSM acts to ensure that institutions and their professionals comply with market regulations, by:

conducting market surveillance – BSM monitors all orders and trades in B3’s markets in order to identify signs of irregularities;

auditing – BSM audits all B3 participants to ensure their compliance with the regulations and to identify possible violations of market rules;

imposing punitive processes and other enforcement actions – when violations of regulations occur, BSM adopts guidance, persuasion or disciplinary measures such as letters of recommendation, letters of censure or administrative sanctioning proceedings, in accordance with the severity of the violation that has been identified; in addition, BSM can, in connection with administrative sanctioning proceedings, apply penalties to or enter into Terms of Commitment (termo de compromisso) with the accused;

providing compensation for loss – BSM analyzes and adjudicates complaints presented to the Investor Compensation Mechanism (MRP), which awards damages of up to R$120,000 to investors harmed by a B3 participant’s inappropriate activity; and

facilitating market development – BSM develops education initiatives, rule enhancements and institutional relationships with market participants, regulatory bodies and international organizations.

APIMEC

APIMEC is a private self-regulatory association authorized by CVM to perform the certification and self-regulation of securities analysts (both individuals and legal entities), establishing rules, procedures and best practices that must be complied with by them in the performance of their activities.

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Other Rules

Corporate Capital and Limits of Exposure

Financial Institutions

Financial institutions are subject to an extensive set of rules issued by CMN and the Central Bank of Brazil related to corporate capital, exposure limits and other solvency requirements that follow principles recommended by the Basel Committee, especially in view of the systemic risks associated with the relationship and activity of financial institutions. As such, CMN and the Central Bank of Brazil sought to guarantee the solvency of the National Financial System and mitigate systemic risks.

With this aim, CMN Resolution No. 2,099 of August 17, 1994, as amended, or “CMN Resolution No. 2,099,” established minimum corporate capital and net equity requirements for various types of financial institutions. For instance, the CMN set a minimum capital amount and net equity amount of R$1.5 million for a DTVM and for a CTVM, in the manner operated by Nu DTVM and NuInvest, and R$7.0 million for credit, financing and investment institutions, such as Nu Financeira. In connection with its licensing process, Nu Financeira has undertaken the commitment before the Central Bank of Brazil to operate with a Basel Committee minimum capital adequacy ratio of 14.0% until 2022, which is a higher capital ratio than those applicable to most other financial institutions operating in Brazil.

In accordance with the Basel Committee principles, other relevant prudential rules applicable financial institutions are CMN Resolution No. 4,192, as amended, and CMN Resolution No. 4,193, as amended, both of March 1, 2013 which set out the methodology for calculating the reference capital and the ascertainment of the minimum requirements for the reference capital, the main capital and additional capital. Such resolutions are complemented by various rules enacted by the Central Bank of Brazil, among which is Central Bank of Brazil Circular No. 3,644 of March 4, 2013.

CMN Resolution No. 4,557 of February 23, 2017, or “CMN Resolution No. 4,557,” unifies and expands Brazilian regulation on risk and capital management for financial institutions and other institutions licensed to operate by the Central Bank of Brazil. The rule is also an effort to incorporate recommendations from the Basel Committee on Banking Supervision into Brazilian regulation. The rule states that risk management must be conducted through a unified effort by the relevant entity (i.e., not only must risks be analyzed on an individual basis, but financial institutions and other institutions licensed to operate by the Central Bank of Brazil must also control and mitigate adverse effects caused by the interaction of different risks). It also strengthened the rules and requirements related to risk management governance and expanded on the competence requirements and duties of the risk management officer.

The rule sets out different structures for risk and capital management, which are applicable for different risk profiles set out in the applicable regulation. Consequently, less sophisticated financial institutions can have a simpler risk management structure, while institutions with more complexity must follow stricter protocols.

Payment Institutions

As per Central Bank of Brazil Resolution No. 80, of March 25, 2021, licensed payment institutions are required to comply with minimum paid-in capital of R$2.0 million per category in which they act (in the case of issuers of post-paid payment instruments, issuers of electronic currency and acquirers); with regard to the PISP category, the required amount is reduced to R$1.0 million. In addition, payment institutions that participate exclusively in closed payment schemes as issuers of electronic currency and issuers of post-paid payment instruments must comply with a minimum paid-in capital of R$3.0 million.

Moreover, according to Central Bank of Brazil Circular No. 3,681, of November 4, 2013, as amended, or “Circular No. 3,681/13,” licensed payment institutions also have to comply with the following minimum net equity requirement: (1) for issuers of post-paid payment instruments or acquirers, 2% of the average monthly value of payment transactions carried out by the payment institution over the last 12 months; (2) for issuers of electronic currency, the higher value between 2% of the average monthly value of payment transactions carried out by the payment institution over the last 12 months or the balance of electronic currencies issued by it, as ascertained on a daily basis; and (3) for a PISP, 1% (from November 3, 2020 to December 31, 2022), 1.25% (from January 1, 2023 to

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December 31, 2024) and 1.5% (as of January 1, 2025) of the average monthly value of payment transactions initiated by the payment institution over the last 12 months.

Compliance and internal controls

All Brazilian financial and payment institutions shall maintain internal guidelines and procedures to control their financial, operational and managerial information systems and shall comply with all the applicable legislation. CMN Resolution No. 4,595 of August 28, 2017, states that Brazilian financial institutions shall implement and maintain a compliance policy compatible with the nature, size, complexity, structure, risk profile and business model of the institution. Central Bank of Brazil Resolution No. 65 of January 26, 2021 sets forth similar rules for the Brazilian payment institutions.

According to CMN Resolution No. 2,554 of September 24, 1998, the executive officers of financial and payment institutions in Brazil are responsible for implementing an efficient structure of internal controls, by defining responsibilities and control procedures and establishing corresponding objectives and procedures throughout all levels of the institution, among other requirements. The executive officers are also responsible for verifying compliance with all internal procedures.

Insolvency Regimes

Brazilian financial and payment institutions authorized by the Central Bank of Brazil are subject to the resolution regimes that the Central Bank of Brazil may apply, which are set forth in: (1) Brazilian Federal Law No. 6,024/74, which provides for intervention and extrajudicial liquidation; (2) Decree-Law No. 2,321/87, which provides for the temporary special administration regime (regime de administração especial temporária, or “RAET”); and (3) Brazilian Federal Law No. 9,447/97, which provides for the joint and several liability of controlling shareholders and the freezing of their assets, as well as for the liability of independent auditors. The provisions applicable to bankruptcy, set forth in Brazilian Federal Law No. 11,101/05, apply secondarily to the extrajudicial liquidation regime.

The Central Bank of Brazil is responsible for the establishment and monitoring of resolution regimes, also acting on the administrative level in appeals filed against decisions of the board, intervenor or liquidator, or in the authorization of specific acts set forth by law. The Central Bank of Brazil is required to initiate an investigation to find the causes that resulted in the application of the special resolution regime and the liability of management, controlling shareholders, members of the fiscal council and independent auditors.

Intervention

Pursuant to Brazilian Federal Law No. 6,024/74, the Central Bank of Brazil has the power to appoint an intervener to intervene in the operations of or to liquidate any financial or payment institution other than public financial institutions controlled by the Brazilian federal government. An intervention may be ordered at the discretion of the Central Bank of Brazil if any of the following is detected:

due to mismanagement, the institution has suffered losses leaving creditors at risk;

the institution has consistently violated Brazilian banking laws or regulations; and

such intervention constitutes a viable alternative to the liquidation of the institution.

Intervention may also be ordered upon the request of a financial or payment institution’s management, if its respective bylaws so authorize - with an indication of the causes of the request, without prejudice to civil and criminal liability in which the same administrators incur, by the false or malicious indication.

As of the date on which it is ordered, the intervention will automatically: (1) suspend the enforceability of payable obligations; (2) suspend maturity of any previously contracted obligations; and (3) freeze deposits existing on the date on which the intervention is ordered. The intervention period should not exceed six months, which may be extended only once for up to six additional months by the Central Bank of Brazil.

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The intervention ceases: (1) if interested parties undertake to continue the economic activities of the institution, by presenting the necessary guarantees, as determined by the Central Bank of Brazil, (2) when the situation of the institution is normalized, as determined by the Central Bank of Brazil, or (3) when extra-judicial liquidation or bankruptcy of the entity is ordered.

Extrajudicial Liquidation

The purpose of the extrajudicial liquidation is to withdraw the relevant institution from the Brazilian financial and payment system, primarily in case of irrecoverable insolvency. The extrajudicial liquidation may also apply in cases of severe infractions, among other events pursuant to applicable law.

Under the extrajudicial liquidation regime, the institution’s activities are interrupted, and all obligations are deemed due. Lenders are then submitted to a classification process based on the order of preference set forth by Brazilian Federal Law No. 11,101/05. This regime seeks the liquidation of existing assets to pay lenders.

The liquidator appointed by the Central Bank of Brazil has ample administration and liquidation powers, especially regarding the assessment and rating of credit. The liquidator may appoint and dismiss employees, determine their compensation, grant and terminate powers-of-attorney, propose actions and represent the institution in court or out of court. Under specific circumstances set forth by law, certain acts performed by the liquidator require the authorization of the Central Bank of Brazil, including to complete pending business, pledge or sell assets and file for bankruptcy.

The extrajudicial liquidation ceases: (1) if the interested parties, presenting the required guarantees, proceed with the economic activities of the institution; (2) upon conversion into an ordinary liquidation, conducted by the institution itself, pursuant to private law, without the participation of the Central Bank of Brazil; (3) upon the approval of the final accounts of the liquidator and relevant write-off in the competent public registry; or (4) in case of adjudication of bankruptcy of the institution. Only the liquidator can file for bankruptcy, subject to the authorization of the Central Bank of Brazil. Bankruptcy may be granted if the assets of the institution are not sufficient to cover at least half of the unsecured credit, or in case of grounded evidence of bankruptcy crimes.

Temporary Special Administration Regime (RAET)

The Temporary Special Administration Regime, or “RAET,” is a resolution regime that does not interrupt or suspend the usual activities of institutions. RAET’s main effects include the removal of members of management from office and their replacement by a board or legal entity specialized in the area, with ample management powers.

The Central Bank of Brazil determines the duration of the RAET. Depending on the circumstances of each case, the RAET ceases: (1) if the Brazilian government takes over the control of the institution due to social interest; (2) in the event of conversion, merger, consolidation, spin-off or transfer of the institution’s control; (3) once the institution resumes its usual activities; or (4) upon the adjudication of extrajudicial liquidation of the institution.

The foregoing list of laws and regulations to which we are subject is not exhaustive and the regulatory framework governing our operations changes continuously. Although we do not believe that compliance with future laws and regulations related to the payment processing industry and our business will have a material adverse effect on our business, financial condition or results of operations, the enactment of new laws and regulations may increasingly affect the operation of our business, directly and indirectly, which could result in substantial regulatory compliance costs, litigation expense, adverse publicity, the loss of revenue and decreased profitability.

Repayment of Creditors in a Liquidation or Bankruptcy

Pursuant to the provisions of the Brazilian Federal Law No. 11,101/05, in the event of extrajudicial liquidation or bankruptcy of a financial or payment institution, creditors are paid pursuant to a system of priorities. Pre-petition claims are paid on a pro-rata basis in the following order:

labor claims, capped at an amount equal to 150 times the minimum wages per employee, and claims relating to labor accidents;

secured claims up to the encumbered asset value;

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tax claims, regardless of their nature and commencement of time, except tax penalties;

claims with special privileges;

claims with general privileges;

unsecured claims;

contractual fines and pecuniary penalties for breach of administrative or criminal laws, including those of a tax nature; and

subordinated claims.

Super-priority and post-petition claims (for example, costs related to the liquidation or bankruptcy procedure), as defined under the Brazilian Federal Law No. 11,101/05, are paid with preference over pre-petition claims.

Anti-Money Laundering

Law No. 9,613 of March 3, 1998, as amended by Law No. 12,683 of July 9, 2012, or the “Anti-Money Laundering Law,” plays a major regulatory role in the oversight of banking and payment activities in Brazil. The Anti-Money Laundering Law sets forth the rules and the penalties to be imposed upon persons engaging in activities that constitute “laundering” or the concealing of property, cash or assets acquired or resulting from any kind of criminal activity. Such regulation further prohibits individuals from using the financial and payment systems for the aforementioned illicit acts.

Pursuant to the Anti-Money Laundering Law, banks, financeiras, securities brokers, securities distributors, asset managers, leasing companies, payment institutions, insurance brokers, among others, must: (1) identify and maintain up-to-date records of their customers; (2) keep up-to-date records of all transactions involving securities, bonds, credit, financial instruments, metals or any asset that if converted into cash exceed the amount set forth by the competent authorities, and which shall be in accordance with the instruction issued by these authorities; (3) adopt AML internal control policies and procedures that are compatible with the size of the company; (4) register and maintain up-to-date records with the appropriate regulatory agency; (5) comply with COAF’s requests and obligations; (6) pay special attention to any transaction that, in light of the provisions set forth by competent authorities, may indicate the existence of a money laundering crime; (7) report all suspicious transactions to COAF; and (9) confirm to the applicable regulatory agency that no offending transactions have occurred.

The Brazilian AML law specifies the acts that may constitute a crime and the required measures to prevent such crimes. It also prohibits the concealment or dissimulation of the origin, location, availability, handling or ownership of assets, rights or financial resources directly or indirectly originated from crimes, and subjects the agents of these illegal practices to imprisonment, temporary disqualification from managing enterprises up to 10 years and monetary fines.

Central Bank of Brazil Circular No. 3,978, of January 23, 2020 (which came into force on October 1, 2020, or “Circular 3,978/20”), which amended and restated the provisions relating to the prevention and combat to money laundering, require financial and payment institutions to (1) identify customers; (2) record transactions; (3) monitor events and report them to the Financial Activities Control Council (Conselho de Controle de Atividades Financeiras, or “COAF”); (4) conduct business with politically exposed persons; (5) establish and maintain relationships with financial institutions and foreign correspondents; (6) train employees; and (7) appoint an officer responsible for the implementation and enforcement of these measures.

Circular 3,978/20 adopted a risk-based approach for dealing with money laundering and terrorist financing. The regulated institutions have the discretion to determine which procedures will be adopted for each customer, based on the internal risk assessment concerning the committing of crimes relating to money laundering and terrorism financing latent in their business.

Along the same lines, CVM Instruction No. 617 of May 12, 2019 establishes, among other obligations, that persons who engage in, on a permanent or occasional basis, as a main or ancillary activity, cumulatively or not, the custody, issuance, distribution, settlement, trade, intermediation, consultancy or management of bonds or securities,

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and independent audit within the scope of the stock exchange market must adopt rules, procedures and internal controls in accordance with previously and expressly established procedures to confirm the registration information of its customers, keep such information updated and monitor the transactions carried out thereby, so as to prevent the use of the account by third parties and identify the end beneficiaries of the transactions, such entities shall also identify and closely monitor the business relations maintained with politically exposed persons.

The COAF was created by the Anti-Money Laundering Law and was reviewed and changed in 2020 by Federal Law No. 13,974/2020. COAF’s purpose is to verify, examine, identify and apply administrative penalties to any suspicious or unlawful activities related to money laundering in Brazil, without prejudice to the jurisdiction of other bodies and entities, as well as report suspicious activities to the prosecutors and the police. COAF has a key role in the Brazilian AML and counter-terrorism financing system, and it is legally liable for the coordination of the mechanisms for international cooperation and information exchange.

Politically Exposed Persons

Pursuant to Circular 3,978/20 and CVM Instruction No. 617, payment and financial institutions and other institutions authorized to operate by the Central Bank of Brazil or the CVM are required to obtain sufficient information from their customers to identify any Politically Exposed Persons from their customer base and monitor their transactions accordingly.

In general terms, Circular 3,978/20 and CVM Instruction No. 617 define Politically Exposed Persons as any government agent, who in the last five years, have held or is holding, in Brazil or in foreign territories relevant government positions, jobs or public office, as well as their representatives, family members and other closely related persons.

Circular 3,978/20 and CVM Instruction No. 617 establish that the internal procedures developed and implemented by the payment and financial institutions subject to such regulation must be structured to enable the identification of Politically Exposed Persons and the origin of the funds for such customers’ transactions.

Transactions with Affiliates

The Banking Law (paragraph 4, article 34), as amended by Law No. 13,506 of November 13, 2017, or “Law No. 13,506,” restricts financial institutions from conducting credit transactions with related parties. Pursuant to CMN Resolution No. 4,693 of October 29, 2018, or “CMN Resolution No. 4,693,” the following persons are considered related parties of a financial institution for the purpose of such restriction:

(1)

its controlling shareholders (individuals or legal entities), pursuant to Article 116 of Law No. 6,404/76;

(2)

its officers and members of statutory or contractual bodies;

(3)

spouses, partners and blood relatives up to the second degree of individuals specified in items (a) and (b);

(4)

its individual shareholders with stakes equal to or greater than 15% in its capital; and

(5)

its legal entities:

(i)

with stakes equal to or greater than 15% in the financial institutions’ corporate capital;

(ii)

in which capital, directly or indirectly, the financial institution holds stakes equal to or greater than 15%;

(iii)

in which the financial institution holds effective operational control or relevance in the deliberations, regardless of the equity interest held; and

(iv)

with a common officer or board member in relation to the financial institution.

Notwithstanding the general restrictions, the following credit transactions with related parties are allowed: (1) transactions carried out under market-compatible conditions, without additional benefits or privileges when compared to transactions executed with other clients of the same profile of the respective institutions; (2)

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transactions performed with companies controlled by the Federal Government, in the case of federal public financial institutions; (3) credit transactions whose counterparty is a financial institution that is part of the same prudential conglomerate, provided that they contain a contractual subordination clause, subject to the provisions of item V of art. 10 of the Banking Law, in the case of banking financial institutions; (4) interbank deposits; (5) obligations assumed between related parties as a result of liability imposed on clearinghouse participants or providers of clearing and settlement services authorized by the Central Bank of Brazil or by the CVM; and (6) other cases authorized by CMN Resolution No. 4,693.

According to CMN Resolution No. 4,693, as of April 1, 2019, all financial institutions must adopt internal policies regulating transactions with related parties.

Brazilian Law No. 7,492 enacted on June 16, 1986, which regulates crimes against the Brazilian National Financial System, criminalized the extension of credit by a financial institution to related parties in the cases not allowed by the Banking Law and CMN Resolution No. 4,693.

Punitive Sanctions

Legal violations under Brazilian payments, banking and/or securities laws may lead to administrative, civil and criminal liability. Offenders may be prosecuted under all three legal theories separately, before different courts and regulatory authorities, and face different sanctions with respect to the same legal offense.

Law No. 13,506, Central Bank of Brazil Circular No. 3,857 of November 14, 2017, and CVM Instruction No. 607 of June 18, 2019, regulate administrative sanctioning proceedings as well as the various penalties, consent orders, injunctive measures, fines and administrative settlements imposed by the Central Bank of Brazil and the CVM.

Law No. 13,506 is noteworthy, as it:

(1)

sets fines imposed by the Central Bank of Brazil of up to R$2 billion or 0.5% of the entity’s revenue, arising from services and financial products provided in the year prior to the violation;

(2)

limits fines imposed by the CVM to the greater of the following amounts: R$50 million, twice the value of the irregular transaction, three times the amount of the economic gain improperly obtained or loss improperly avoided, or twice the damage caused by the irregular conduct. Repeat offenders may be subject to treble the amounts above;

(3)

provides for the suspension, disqualification and prohibition from engaging in certain activities or transactions in the banking or securities market for a period of up to 20 years;

(4)

temporarily bans offending individuals from serving in any managerial capacity for financial institutions;

(5)

imposes coercive or precautionary fines of up to R$100,000 per day, subject to a maximum period of 30 days in punitive fines;

(6)

defines the scope of the Central Bank of Brazil’s regulatory authority;

(7)

prohibits the offending institutions themselves from participating in the markets;

(8)

provides for a penalty of “public admonition” in place of “warning”, imposed by the Central Bank of Brazil;

(9)

empowers the Central Bank of Brazil to enter into cease-and-desist commitments;

(10)

empowers the Central Bank of Brazil and the CVM to enter into administrative agreements;

(11)

provides the CVM with the authority to ban the accused from contracting with official Brazilian financial institutions and participating in public bidding processes for a period of up to five years; and

(12)

redefines related party transactions.

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Penalties may be aggregated, and are calculated based on the following factors:

(1)

gains obtained or attempted to be gained by the offender;

(2)

economic capability to comply;

(3)

severity of the offense;

(4)

actual losses;

(5)

any recurrence of the offense; and

(6)

the offender’s cooperativeness with the investigation.

Law No. 7,492 provides a legal framework to hold controlling shareholders, officers and managers of a financial institution criminally liable. The regime under Law No. 7,492 also covers interventionists, liquidators and real estate managers, in the context of interventions, extrajudicial liquidation or bankruptcy, respectively. Those found criminally liable under Law No. 7,492 will be subject to detention and/or pecuniary fines.

Law No. 6,385 also imposes imprisonment and/or fines for banking or securities infractions.

Internal Auditing

CMN Resolution No. 4,879 of December 23, 2020 (applicable to financial institutions) and Central Bank of Brazil Resolution No. 93, of May 6, 2021 (applicable to payment institutions) provide for rules governing internal audits at financial institutions and others authorized to operate by the Central Bank of Brazil. Pursuant to such rules, financial and payment institutions must implement and maintain internal audit functions compatible with the nature, size, complexity, structure, risk profile and business model of the respective institution. Such activity must be the responsibility of a specific department in the institution or institutions that are part of its financial conglomerate, directly subordinated to the board of directors or, if one does not exist, the board of executive officers; or (ii) an independent auditor provided that such independent auditor is not in charge of auditing the institution’s financial statements or any other activity that may create a conflict of interest.

Independent Auditors and Audit Committee

Pursuant to CMN Resolution No. 3,198 of May 27, 2004 as amended, or “CMN Resolution No. 3,198,” all financial institutions must be audited by independent auditors. The financial institutions may only hire independent auditors registered with the CVM and certified as experts in banking analysis by the Central Bank of Brazil. After such auditors have issued opinions auditing the financial statement of a certain financial institution for up to five consecutive fiscal years, the Auditor’s team including managers, supervisors or any members with managerial positions, must be replaced.

CMN Resolution No. 3,198 requires financial institutions and other institutions licensed to operate by the Central Bank of Brazil to implement an individual audit committee or an unified audit committee for its conglomerate, as the case may be, if they (1) have reference equity equal to, or greater than, R$1 billion; (2) manage third-party funds in amounts equal to, or greater than, R$1 billion; or (3) have deposits and funds under management in a total amount equal to, or greater than, R$5 billion.

Ombudsman

Pursuant to CMN Resolution No. 4,860 and Central Bank of Brazil Resolution No. 28, both issued on October 23, 2020, financial and payment institutions, respectively, must (i) create an ombudsman department (individually for the institution or unified for its conglomerate) compatible with the nature and complexity of the institutions’ products, services, activities, processes and systems to establish an independent communication channel with their clients; and (ii) appoint individuals as an ombudsman and an ombudsman officer (who can also be the ombudsman himself).

The following are the ombudsman department’s main responsibilities: (1) receiving, recording, instructing, analyzing and providing formal and adequate attention to claims from clients and users of the institution’s products

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and services; (2) providing clarification regarding the status of a claim and information as to when a response is expected to be given; (3) sending a final answer within the applicable deadline; (4) keeping the board of directors or, if one does not exist, the board of executive officers, informed of the problems and shortcomings detected in the performance of its duties and the results of the actions taken by the institution’s officers to resolve them; and (5) preparing and sending, to the internal audit department, to the audit committee (if one exists), and to the board of directors (or if one does not exist, to the board of executive officers), a semiannual quantitative and qualitative report on the ombudsman department’s activities and its performance.

Whistleblowing and Hotline

Pursuant to CMN Resolution No. 4,859, of October 23, 2020, financial institutions and other institutions licensed to operate by the Central Bank of Brazil are required to have a whistleblower hotline (canal de denúncias), through which their employees, clients, contractors, users and/or suppliers may anonymously report situations involving potential illicit activities of any nature related to the institution’s activities. Accordingly, financial institutions are required to appoint a responsible department for forwarding all reported events to the appropriate departments for further handling. This department is also required to prepare reports semi-annually detailing, at least, the following information relating to each reported event: (1) number of reported events and their nature; (2) the departments that handled them; and (3) the average timeframe and relevant measures adopted to solve them. Such reports must be (1) approved by the board of directors of the institution or, if one does not exist, the institution’s board of executive officers; and (2) made available to the Central Bank of Brazil for at least 5 years.

Foreign Investment in Brazilian Financial Institutions

According to Decree No. 10,029, of September 26, 2019, and Central Bank of Brazil Circular No. 3,977, of January 22, 2020, the execution of direct or indirect foreign investments in voting or non-voting equity interest in Brazilian financial institutions by any individual or legal entity, regardless of the nationality, requires prior approval of the Central Bank of Brazil. Until the enaction of such rules, the execution of such investments was subject to the enaction of a specific presidential decree on a case-by-case basis.

Corporate Interest Held by Financial Institutions in Other Legal Entities

Pursuant to CMN Resolution No. 2,723, of May 31, 2000, as amended, financial institutions may only, directly or indirectly, hold equity interest in other legal entities (incorporated locally or offshore) that supplement or subsidize their activities, provided that they obtain prior authorization from the Central Bank of Brazil and that the invested entity does not hold, directly or indirectly, equity of the referred financial institution. However, this requirement does not apply to (1) equity interests typically held in the investment portfolios of investment banks, development banks, development agencies (agências de fomento) and multiservice banks with investment or development portfolios; and (2) temporary equity interests not registered as permanent assets and not subject to consolidation by the financial institution.

Change of Corporate Control and Qualified Equity Interest

Pursuant to the provisions of CMN Resolution No. 4,122 (for financial institutions, such as Nu Financeira, Nu DTVM and NuInvest) and the provisions of Central Bank of Brazil Resolution No. 81, of March 24, 2021 (for payment institutions, such as Nu Pagamentos), the change, transfer or modification of the control of financial or payment institutions authorized by the Central Bank of Brazil must be submitted to the prior approval of the Central Bank of Brazil in accordance with the above mentioned regulations and such change, transfer or modification shall only be effected after such approval is duly obtained.

In addition, pursuant to the above mentioned rules, if an individual or legal entity acquires, directly or indirectly, a qualified equity interest (i.e., 15% or more of the total equity interest of a financial institution, or 15% or more of the voting equity interest or 10% or more of the total equity interest of a payment institution) or expands qualified equity interest previously acquired, such acquisitions shall be notified to the Central Bank of Brazil, which has the right to request documents and information, as well as order that the acquisition be regularized or undone in case of any irregularities.

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Open Banking

According to CMN and Central Bank of Brazil Joint Resolution No. 1, of May 4, 2020, Open Banking is the standardized sharing of data, products and services by financial institutions, payment institutions and other institutions licensed to operate by the Central Bank of Brazil, at their clients’ discretion, through the opening and integration of their systems. Therefore, Open Banking is considered by the Central Bank of Brazil as an important tool for innovation in the financial and payments markets, and is expected to make such sectors more efficient, inclusive and competitive.

Open Banking is under gradual legal, operational and technological development and implementation in Brazil, according to certain stages defined by the Central Bank of Brazil that are expected to last until September 2022. Consequently, some of the applicable requirements and standards that will need to be complied with by Open Banking participants are still under discussion and preparation by a self-regulatory body created specifically for this purpose, as well as by the Central Bank of Brazil itself.

Instant Payment System

In 2020, the Central Bank of Brazil launched PIX, a payment system that allows real-time payments and transfers. The main goals of the Central Bank of Brazil with PIX are to foster innovation and differentiated services that meet the needs of end-users, as well as expand and simplify the payment methods available, since less personal information is needed in order to materialize a payment. In this context, the PIX is an open ecosystem that various types of payment service providers can join.

On August 12, 2020, the Central Bank of Brazil published Resolution No. 1, which sets out implementation procedures and participation criteria for the Brazilian Instant Payments System (Sistema de Pagamentos Instantâneos, or “SPI”), and the Central Bank of Brazil’s instant payments arrangement. The arrangement requires that all financial and payment institutions authorized to operate by the Central Bank of Brazil and which have more than 500,000 active customer accounts (including checking, savings and payment accounts) will mandatorily participate in the SPI and in the Central Bank of Brazil’s instant payments arrangement.

E-Commerce, Data Protection and Taxes

In addition to regulations affecting digital payment schemes, we are also subject to laws relating to internet activities, e-commerce and data protection, as well as tax laws and other regulations applicable to Brazilian companies generally. Internet activities in Brazil are regulated by Brazilian Federal Law No. 12,965/14, as amended, known as the Brazilian Civil Rights Framework for the internet, which embodies a substantial set of rights of internet users, and obligations relating to internet service providers. This law exempts intermediary platforms from liability for user-generated content in certain cases. On the other hand, this law provides for penalties (including fines) in case of non-compliance.

The laws and regulations applicable to the Brazilian digital payments industry and to the offering of financial services are subject to ongoing interpretation and change, and our digital payments business may become subject to regulation by other authorities. For further information on the risks relating to the regulation of business, please see “Risk Factors—Risks Relating to Regulatory Matters and Litigation—We are subject to extensive regulation and regulatory and governmental oversight as a digital banking platform and as a payment institution. Compliance with or violation of present or future regulations could be costly, expose us to substantial liability and force us to change our business practices, any of which could harm our business and results of operations.”

Consumer Protection Laws

We are subject to several laws and regulations designed to protect consumer rights—most importantly, Brazilian Federal Law No. 8,078/90, as amended, known as the Consumer Protection Code (Código de Defesa do Consumidor), which sets forth the legal principles and requirements applicable to consumer relations in Brazil. This law regulates, among other things, commercial practices, product and service liability, strict liability of the supplier of products or services, reversal of the burden of proof to the benefit of consumers as the hypo sufficient party, the joint and several liability of all companies within the supply chain, abuse of rights in contractual clauses, advertising and information on products and services offered to the public. The Consumer Protection Code further establishes

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the consumers’ rights to access and modify personal information collected about them and stored in private databases. These consumer protection laws could result in substantial compliance costs.

Data Privacy and Protection

With regard to the compliance with data protection regulations, besides the Brazilian Federal Constitution, we are subject to the Brazilian Civil Rights Framework for the internet, the Consumer Protection Code, Bank Secrecy Law and the Brazilian Federal Law No. 13.709 of August 14, 2018, called the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados, or the “LGPD”). We are also subject to intellectual property rules, and to tax laws and related obligations such as the rules governing the sharing of customer information with tax and financial authorities. It is unclear whether the tax and regulatory authorities would seek to obtain information regarding our customers. Any such request could come into conflict with the data protection rules, which could create risks for our business.

The Brazilian Civil Rights Framework for the internet establishes principles, guarantees, rights and duties for the use of the internet in Brazil, including regulation about data privacy for internet users.

In September 2020, the LGPD came into effect, except for its administrative sanctions, which will become effective on August 1, 2021, under the Brazilian Federal Law No. 14,010/20, which delayed the applicability of certain provisions of the LGPD. The LGPD establishes detailed rules to be observed in the maintenance and processing of personal data and provides, among other measures, rights to the data subjects, cases in which the processing of personal data is allowed, obligations and requirements relating to security incidents involving personal data and the transfer and sharing of personal data.

The LGPD further establishes penalties for non-compliance with its provisions, ranging from a warning and exclusion of personal data processed in an irregular way to fines or the prohibition from processing personal data. The LGPD also authorizes the creation of the ANPD, an authority that oversees compliance with the rules on data protection. See “Risk Factors—Risks Relating to Intellectual Property, Privacy and Cybersecurity—Unauthorized disclosure of, improper access to, or destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise, or disruptions to our systems or services could expose us to liability, protracted and costly litigation and damage our reputation.”

Any additional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could harm our business, financial condition or results of operations.

Bank Secrecy

Brazilian financial and payment institutions are subject to bank secrecy rules, pursuant to Supplementary Law No. 105, of January 10, 2001, and CMN Resolution No. 4,282, of November 4, 2013. Such institutions are required to maintain the secrecy of their active and passive transactions and services provided, except for certain events, including, but not limited to: (1) disclosure of confidential information upon the express consent of the interested parties or when requested by judicial authorities; (2) exchange of information between financial institutions for recording purposes; (3) remittance of record information to credit protection agencies related to drawers of bad checks and borrowers in default; (4) communication of criminal or administrative offenses to competent authorities; and (5) if they are responsible for withholding and paying contributions, remittance of information to the Brazilian Federal Revenue Office required to identify taxpayers and global amounts involved in their transactions.

Cyber Security

Under CMN Resolution No. 4,893, of February 26, 2021, and Central Bank of Brazil Resolution No. 85, of April 8, 2021, financial and payment institutions, respectively, must comply with cybersecurity requirements set forth therein applicable to the engagement of data processing and storage, and cloud computing service providers in Brazil and offshore, as well as implement policies, and accident response and action plans.

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Public Hearing on ESG Reporting Standards

On April 26, 2021, the Central Bank of Brazil launched Public Hearing No. 86/2021, which includes a normative proposal that establishes rules for the disclosure of information on social, environmental and climatic risks by the institutions of the National Financial System, or the “SFN.”

The proposal, inspired by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), a task force created in 2015 by the Financial Stability Committee, or the “FSB,” is one of the regulatory deliverables agreed under the “Sustainability” pillar of Agenda BC # and will be implemented in Brazil in two phases.

In the first phase, covering qualitative aspects, the focus is on the dissemination of clear, consistent and comparable information on governance, strategies and management of social, environmental and climatic risks.

The second phase, scheduled for 2022, will establish the mandatory disclosure of quantitative information (goals and metrics). Institutions that use indicators in the management of social, environmental and climate risks will be able to opt for disclosure in this first phase, under the terms of the proposal in public consultation.

The information should be disclosed in a standardized report, or the “GRSAC Report,” obeying proportionality criteria based on the size and complexity of the institutions, which brings benefits in terms of consistency and comparability of information between different institutions.

Compared to the TCFD recommendations, whose only focus is the dissemination of information on climatic aspects, the scope of the proposal in public consultation was expanded to also encompass social and environmental issues, condensed in the acronym ESG (Environmental, Social and Governance), recognizing the importance of the theme for the country and for the National Financial System.

It is worth noting that the normative proposal complements Public Consultation No. 85/2021, by requiring the disclosure of information based on the new definitions and requirements established for the management of social, environmental and climatic risks.

Registration of BDRs with the CVM

The rules enacted by CMN, the Central Bank of Brazil and CVM require that the depositary file the relevant BDR program with the CVM and the Central Bank of Brazil for purposes of enabling remittances of funds to and from Brazil in connection with the offer and sale of BDRs in Brazil, the sale of the underlying shares offshore and the payment of dividends and other distributions to holders of the BDRs. These rules further require that any such remittances be registered with the Central Bank of Brazil by the engaged custodian on behalf of the depositary. The remittance of funds offshore in connection with the offer and sale of the BDRs in Brazil is limited to the proceeds from the sale of such BDRs in a Brazilian market regulated by the CVM, net of commissions and other related expenses.

As a general rule, the BDRs may be redeemed for the purposes of selling the underlying shares offshore. The proceeds from any such sale may not be used for other investments outside Brazil and must be repatriated within seven days from the date in which the BDRs are redeemed. Foreign investors purchasing BDRs pursuant to the provisions of CMN Resolution No. 4,373 are not subject to such a repatriation requirement, but must record any such redemption with the Central Bank of Brazil. Dividends and other distributions made to Brazilian residents in connection with the BDRs must be repatriated, but may be applied to the acquisition of additional underlying shares. Individuals domiciled in Brazil and non-financial institutions, investment funds and other investment companies incorporated in Brazil may purchase shares issued offshore by sponsors of BDR programs in Brazil for purposes of depositing such shares with the relevant custodian and request the issuance of BDRs in Brazil. The depositary is responsible for maintaining and updating the registration of the BDR program with the Central Bank of Brazil, including the flow of funds in connection with redemptions and payments of dividends and other distributions.

In connection with our registration as a publicly-held company and the listing of our BDRs in Brazil, we will have to comply with certain disclosure requirements. As a result, we are required to file with the CVM: (i) on an annual basis, a reference form (formulário de referência) in Portuguese by the fourth month of each year, which summarizes our financial, legal and operating information; (ii) quarterly financial information with 45 days after the

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end of each quarter; and (iii) on an ongoing basis, reports disclosing limited information on call notices and minutes of general meetings as well as material facts and notices to the market, as required by applicable rules.

Other Countries

Furthermore, on December 10, 2020, our subsidiary Nu Tecnologia entered into a purchase agreement for the acquisition of 100% of Akala, a Mexico-based financial cooperative association engaged in fundraising and financial services company, inoperative since 2018 but with a valid “SOFIPO” license. The main characteristic of a SOFIPO-type license is to enable institutions to take deposits from customers, while having fewer assets and lower capital requirements compared to banks. On December 18, 2020, we submitted a change of control request of Akala to the CNBV.

In Colombia, our credit card product is offered by a commercial entity that is subject to extensive regulation, including those governing consumer protection (namely Law No. 1,480 of 2011, Decree No. 1,074 of 2015 and the Sole Circular of the Industry and Trade Superintendence) and data protection (Law No. 1,581 of 2012). In addition, interest rates in Colombia are capped, as provided in the Colombian Commercial and Criminal Codes. Our activities in Colombia are subject to the supervision of the Industry and Trade Superintendence with regards to consumer relations, data protection and antitrust. Furthermore, the Colombian Financial Regulatory Unit, URF, has proposed various changes to financial regulations that may be implemented in the future and affect our Colombian operations.

In the EU, on account of our employees based in Germany, we are subject to the GDPR, as described in greater detail in “Risk Factors—Risks Relating to Regulatory Matters and Litigation—We are subject to costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to data privacy, security and protection. Developments in these and other laws and regulations could harm our business, financial condition or results of operations.” For more information, see “Risk Factors—Risks Relating to Regulatory Matters and Litigation.”

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Business

Overview

Our Mission and Vision

Welcome to Nu

Nu is the largest digital banking platform in the world, outside of Asia, and one of the leading technology companies in the world, with 36.9 million customers across Brazil, Mexico, and Colombia as of March 31, 2021. We built our business based on four core principles: (1) a highly curated customer-centric culture and approach that permeates everything we do; (2) the prioritization of human-centric design across all of our mobile-apps, products, services and interactions to create superior customer experiences; (3) the development of advanced proprietary technologies built from the ground up by some of the best talent from around the world; and (4) the utilization and optimization of powerful data science and proprietary models that support every aspect of our business. We combine these to create a self-reinforcing business model that we believe enables us to serve our ecosystem of customers and partners more effectively as we grow, and to generate significant and sustainable competitive advantages in the marketplace. Together, these have compounded since our founding to produce:

36.9 Million Customers – Leadership in Digital Banking – As of March 31, 2021, we had 36.9 million customers, including approximately 22% of the adult population of Brazil, which is nearly as big as the combined customer bases of the next three largest digital banking platforms in the United States, Europe and Latin America, according to a November 2020 report published by Autonomous Research. We were also ranked as the #1 Bank in Brazil by Forbes for each of the past three years, the #1 Digital Banking App in the World by Pymnts.com in 2021, and Latin America’s Best Digital Bank by Euromoney in 2021.

Most Loved Brand in Brazil – One of the Most Trusted Companies and Brands – By delighting our customers, we have created a powerful reputation and a valuable brand that is highly regarded in our markets and around the world. For example, we were listed in 2021 by TIME as one of the 100 Most Influential Companies in the world and by CNBC as one of the Top 50 Disruptors in the world. We were also ranked as the #1 Most Loved Brand in Brazil by eCGlobal in 2021.

A Powerful and Expanding Ecosystem of Solutions and Services Across the Five Financial Seasons – We have developed a growing suite of essential and high frequency financial solutions designed to create superior customer experiences across the Five Financial Seasons of a consumer or SME customer’s journey. These include (1) Spending with our credit and debit cards, QR code-based and PIX instant mobile payments solutions, WhatsApp Pay and traditional wire transfers; (2) Saving with our NuConta personal and business accounts; (3) Investing with our direct-to-consumer NuInvest digital investment platform; (4) Borrowing with our transparent, easy-to-manage credit cards and personal loans with limits that grow over time as users build their credit histories with us; and (5) Protecting with our NuSeguros insurance solutions. We have also broadened our ecosystem by adding products and services from marketplace partners to our platform, such as insurance, and foreign remittances, all under the Nu brand and with the

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same customer experience as with our proprietary products. We believe the scale of our marketplace makes it unique and extremely valuable to potential partners seeking access to our rapidly growing customer base.

90 Net Promoter Score – A Highly Engaged and Loyal Customer Base – We have built a strong reputation with our customers for being fair, transparent, trustworthy and high-quality. In addition, we have developed a strategy to cultivate our customer relationships to foster new customer referrals and higher deposit and spending rates. As a result, we (1) acquired approximately 86% of our customers organically in 2020, either through word-of-mouth or a direct unpaid referral from an existing customer without incurring direct marketing expenses; (2) received a Net Promoter Score, or “NPS,” of 90 in Brazil, which far exceeds incumbent banks and all other major local financial technology companies; and (3) have become the primary bank for over 40% of our customers who had been with us for more than 12 months based on the month ended March 31, 2021. We consider ourselves the primary bank for those of our customers who had at least 50% of their post-tax monthly income move in or out of their NuConta account in any given month.

Compounding Growth at Scale – We have grown our customer base and our revenue at high annual growth rates. As of March 31, 2021, we had 36.9 million customers, which represents an increase of approximately 10x from 3.7 million as of March 31, 2018. Of these 36.9 million customers, approximately 70% were active as of March 31, 2021, defined as customers that generated revenue in the preceding 30-day period. In the three months ended March 31, 2021, we added an average of 1.3 million new customers per month across Brazil, Mexico and Colombia.

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Total Customers (in Millions, % YoY Growth)

Our Attractive Opportunity

Within Latin America, we currently serve Brazil, Mexico and Colombia, which countries together accounted for over 60% of the population and 61% of the gross domestic product, or “GDP,” in the region in 2020 according to the World Bank, and provide a fertile opportunity for our services due to several attractive attributes and market characteristics, including:

Meaningful Pain Points in the Market – Financial services in our markets suffer from real pain points, which gives us a significant opportunity to provide a solution. Incumbent banks in Brazil, Mexico and Colombia, which on average hold between 70% and 90% of all loans and deposits, charge very high fees, and generate outsized profitability levels, based on data from the respective Central Banks. In Brazil, approximately 29% of incumbent banks’ operating income was derived from fees, compared to 16% in the United Kingdom, according to the Oliver Wyman Report.

Powerful Secular Trends – The Latin American region is benefitting from several positive secular trends that are highly complementary to our business. For example, there is a strong technology adoption trend in the region as illustrated by the 80% smartphone adoption rate projected in 2025 according to the Global System for Mobile Communications, or “GSMA.” A growing middle class and increasingly younger

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population is fueling this trend and driving some of the highest mobile app usage rates in the world. Based on publicly available information, Brazil has the second highest app usage rate in the world for WhatsApp, the second highest for Netflix, and the fourth highest for Facebook, as well as the fifth highest smartphone usage globally. In addition, regulators across the region have been promoting policies designed to foster innovation, instill access and increase competition in the financial services sector. We believe this represents a significant opportunity to disrupt legacy providers through innovative business models and mobile app-based solutions.

Significant Penetration Opportunities – Financial services in Latin America still offer a significant penetration opportunity ahead as the electronic payments and consumer credit segments continue to deepen across the region and approach current levels in the United States and the United Kingdom based on data gathered from the World Bank and the International Monetary Fund (or IMF). For example, in Brazil, Mexico and Colombia there is: (1) a large unbanked population consisting of 134 million adults in aggregate; (2) limited credit card adoption of 27.0%, 13.9% and 9.5%, respectively, compared to 65.6% in the United States and 65.4% in the United Kingdom and (3) limited household debt as a percentage of GDP, at 30.5%, 16.2% and 27.6% in Brazil, Mexico and Colombia, respectively, compared to 55% to 85% in developed markets (consisting of United Kingdom, United States, Spain, Japan and France), according to data from IMF. This suggests a 2x-to-3x penetration opportunity for financial products in Latin America over the coming decades.

Our Go-to-Market Approach

We serve a broad customer base of 36.3 million consumers and over 600,000 SMEs as of March 31, 2021. Our customer base is diversified across various demographic measures, such as income and age, and relatively in line with the overall segmentation of our markets. Based on our analysis of publicly available data and the general composition of the customers in our industry per the Oliver Wyman Report, we believe we serve a larger proportion of younger consumers than incumbent banks. We also believe this scenario creates more opportunities to grow with our customers as they accumulate wealth and reach life milestones that expand their financial needs.

We go to market, serve and support our customers through an all-digital, cloud-based model that is low-cost and highly efficient without the need for expensive real estate and bank branches. We market and sell our solutions and services online by (1) prioritizing high-quality customer experiences to drive organic word-of-mouth advertising and customer referrals, (2) fostering our social media presence and developing digital content to drive awareness, education and engagement, and (3) making selected investments in marketing and promotional campaigns when returns are attractive to further accelerate customer adoption.

We operate with significant advantages that have helped us grow exponentially and operate with high gross profit margins. For example, we have (1) increased our revenue per active customer by growing our share of wallet and driving the adoption of multiple products, (2) increased our customer retention through our focus on strong customer engagement and satisfaction, and (3) increased our position as the primary bank account for our customers. As a result, we have increased the lifetime value of our customer relationships. Our model has also enabled us to generate operating efficiencies, including: (1) a low cost to acquire new customers, (2) a low cost to serve our customers, (3) a low cost of risk, and (4) a low cost of funding.

We earn revenue from two main sources: (1) fees, which include fees on credit and debit card transactions, payments, loyalty programs, prepaid mobile phone top ups and distribution of certain financial products and services, such as investments, insurance and remittance products, and (2) interest payments, which are related to interest charged on revolving and refinanced credit card balances and personal loans, as well as interest earned on deposits, government bonds and other interest-earning instruments. For the three months ended March 31, 2021, 48.0% of our revenue was earned through fee and commission income, which comes mostly from interchange fees and is not directly charged to the customer.

For the three months ended March 31, 2021, we had US$245.1 million in revenue, which represents an increase of 360% and a compounded annual growth rate, or “CAGR,” of 54% from US$67.3 million in the three months ended March 31, 2018, or approximately 600% and a CAGR of 84% from US$39.2 million in the three months ended March 31, 2018 when computed on an FX Neutral basis. A reconciliation of our FX Neutral revenue to the

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IFRS measure of this metric can be found under “Summary Consolidated Financial and Other Data—Non-IFRS Financial Measures and Reconciliations.”

Revenue (in US$ millions, % YoY Growth)

In 2020, we reported US$737.1 million in revenue, and US$326.9 million in gross profit, representing a year-over-year increase of 20% and 32%, respectively, versus 2019, or a year-over-year increase of 60% and 75%, respectively, versus 2019, when computed on an FX Neutral basis. In the three months ended March 31, 2021, we reported US$245.1 million in revenue, and US$115.7 million in gross profit, representing a year-over-year increase of 13% and 32%, respectively, versus the three months ended March 31, 2020, or a year-over-year increase of 36% and 57%, respectively, versus the three months ended March 31,2020, when computed on an FX Neutral basis. A reconciliation of our FX Neutral revenue and gross profit to the IFRS measures of these metrics can be found under “Summary Consolidated Financial and Other Data—Non-IFRS Financial Measures and Reconciliations.”

Our Unique Approach

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Core Principle

Description

Customer-Centric Culture

We Are Obsessed with Serving Our Customers

Since our company was founded, we have intentionally and consistently cultivated a customer-centric culture that is obsessed with delighting our customers. This culture is central to achieving our mission and we remain vigilant in preserving and nurturing it. The core values of our culture are:

· We Want Our Customers to Love Us Fanatically – We design products and deliver experiences that delight customers, empowering them to take control of their financial lives. We tailor customer interactions and communication across all touchpoints from our brand to create an emotional bond with lasting relationships.

· We Think and Act Like Owners, Not Renters – We want all our employees to think like owners and treat the business and our customers like their own, which we believe is essential to creating long-term shareholder value, with approximately 80% of our employees owning Nu shares or holding share-based incentive awards as of March 31, 2021.

· We Are Hungry and Challenge The Status Quo – We have a culture of non-conformism that seeks to challenge and improve on the status quo, initially focused on reinventing traditional financial services. This is the principle that drives our team not to rest on our laurels and to keep pushing for more innovation and growth.

· We Pursue Smart Efficiency – We aim to minimize waste in all of its forms to benefit our customers. We believe in using technology to build proprietary systems that give us scalability while making sure we optimize the use of all the constrained resources we have as a company: our people, our time, our attention and our capital, among others. As we gain efficiency, we are able to pass those gains to our customers, continuously working to provide lower and lower prices.

· We Build Strong and Diverse Teams – We believe that true creativity is bred in diversity in all of its forms, and have assembled a team of exceptional talent from around the world, who contribute their diverse experiences, preferences and perspectives to serve local markets. We appreciate diversity and value the importance of creating an inclusive workplace comparable to the community we serve, which we believe is a key driver of innovation.

Extraordinary Customer Experiences

We Focus on Creating Superior Customer Engagement and Experiences

We design everything we do to create a customer experience that exceeds expectations and delights our customers. This is driven by:

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Core Principle

Description

· Mobile and Digital First – We focus on developing cloud-based mobile applications that provide our customers with a modern digital experience at their fingertips on any device.

· Product Simplicity – We offer digital financial services products that are simple, transparent, accessible and easy to use.

· Human-Centered Design – We design our solutions around the human perspective and seek to create a high-quality experience that is intuitive for our customers in everything we do.

· Seamlessly Integrated – We create a seamless experience by using our Nu mobile app to provide our customers with easy and integrated access to all of our products and services.

· Xpeers – We employ a highly trained support team of Xpeers, who focus on continuously improving the customer experience by leveraging customer interactions to enhance everything we do.

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Core Principle	Description
Advanced Technology We Lead Everything with Technology	We use the latest technologies and modern tools to deliver a superior experience for our customers in a hyper-scalable and secure environment. We prioritize building our own technology and investing in engineering talent. The key components of our technology include: · NuCore Technology Platform – All of our products, services and operations are powered by NuCore, our proprietary, cloud-based core banking platform that we designed and built from the ground up. NuCore enables us to centrally manage several key functions, including transaction authorization and processing, core banking, regulatory reporting, business operations, customer services, credit underwriting and fraud prevention. This provides us with greater speed and control to optimize our products and address the needs of the markets in which we operate. It also allows us to innovate on core product features that won’t be immediately accessible to competitors that leverage platforms that are standard in the market today. · Microservices Approach – We use a versatile, decentralized technology architecture to manage and deploy over 500 modular microservices that we have developed. This advanced technology strategy enables us to scale, launch new products, enter new markets, and maintain and evolve our codebase incrementally with decentralized ownership. · *Immutable Architecture* – We have created an advanced, immutable ledger, utilizing the Datomic database technology we developed. This provides us with a highly reliable audit trail and transaction history that we believe provides better accuracy, control, reliability and transparency versus traditional database architectures. As a result, we are able to develop new code more aggressively with over 1,000 deployments per week. We believe we are one of the largest companies in the world to utilize an immutable database and this advanced methodology. · World-Class Software Engineers – We have attracted excellent software engineers from around the world who are drawn to our advanced technology strategies and want to code at a cutting-edge level using Clojure, the advanced programming language that we sponsor following our acquisition of Cognitect, a U.S.-based software consultancy whose founders created the language. We have over 700 developers and engineers organized across 75 agile development squads in six global technology hubs in Brazil, Mexico, Germany, the United States, Argentina and Colombia.

Proprietary Data Science Everything We Do is Driven by Data Science	We acquire, store and analyze an enormous amount of data that we use to inform our decision making, reduce risks and improve the customer experience. Our data science strategy consists of: · *Proprietary Data* – On average, from January 1, 2021 through July 28, 2021, we collected more than 5,000 data points on each active customer, which we use to better understand their behavior, risks and financial needs to better serve them across their lifecycle with Nu. · *Powerful Credit Engine* – Our in-house, proprietary credit underwriting engine learns from customer behavior, enabling us to develop curated credit strategies to offer customers the best product for their specific financial situation. For example,

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Core Principle

Description

we utilize these capabilities to offer customers with limited credit histories a small credit line to start, which can grow as we learn more about their behavior.

· Artificial Intelligence and Machine Learning – We utilize a combination of proprietary and best-of-breed machine learning algorithms and artificial intelligence tools to continuously improve our underwriting, customer experience, risk management and operations.

· Self-Driving Ecosystem – We integrate all data in our Nu Ecosystem to develop a holistic profile of our customers, enabling us to algorithmically recommend products in real time that may meet specific customer needs throughout their financial journey.

Our Self-Reinforcing Model

Our self-reinforcing business model, illustrated below, includes seven key elements that we combine to serve our customers more effectively, generate competitive advantages, nurture and grow our ecosystem and create shareholder value.

The seven elements of our model include:

More Engagement – Our customers increase their engagement and usage of our high frequency and essential solutions or adopt new solutions. This leads to:

More Data – We gather a tremendous amount of data from each customer and each transaction. This data compounds in value as we grow and drives our artificial intelligence and machine learning algorithms to improve everything we do. This leads to:

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Lower Costs – We use our growing data sets to make smarter underwriting decisions, continuously improve customer segmentation and optimize business operations, which can create efficiencies and enable us to invest more into our business. This leads to:

Attractive Fees and Rates – We use our greater insights, efficiencies and cost savings to offer customers products with attractive fees and rates as we understand their total risk profile better and optimize our own operations. This leads to:

Better Products and Experiences – We can also use our greater insights and efficiencies to improve our product design, optimize the customer experience and develop new features. This leads to:

More Customers – Our biggest source of marketing is word-of-mouth recommendations from existing customers, which has resulted in viral organic customer acquisition and very high retention. This leads to:

A Growing Nu Ecosystem – Our ecosystem includes our 36.9 million customers, composed of consumers and SMEs, and a growing number of marketplace partners who we partner with to offer attractive solutions beyond our core capabilities.

Stakeholder Impact

Our Market

Overview

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services if compared to developed economies, as demonstrated by the large number of adults that remain unbanked, the relatively low level of household debt and the relatively low adoption of credit cards.

Over time we aim to expand our presence to additional relevant markets in Latin America, as consumers and SMEs have for too long faced a banking system with substantial challenges that create market inefficiencies and opportunities for disruption. These include (1) a highly concentrated banking system, (2) legacy technologies and heavy infrastructure, (3) expensive products and services, which exclude all but a narrow income bracket, and (4) poor customer service offered by incumbent banks in general.

Our Market Opportunity in Latin America

The serviceable addressable market, or “SAM,” includes the business lines we currently operate in Brazil, including revenue from retail credit (defined as the interest income net of funding costs and credit charges), investments, payments and insurance brokerage. The revenue potential of the retail financial services amounted to US$101 billion in 2020 and is projected to grow at a 5% CAGR to US$129 billion by 2025, according to the Oliver Wyman Report. Our revenue of US$737 million in 2020 accounted for less than 1% of this SAM, demonstrating the massive opportunity ahead.

The Near-Term SAM, or “NTSAM,” in addition to Brazil, also considers Mexico and Colombia, countries into which we have very recently entered and where we expect to mature and gain scale rapidly. The retail financial services NTSAM amounted to US$128 billion in 2020 and is projected to grow at a 7% CAGR to US$180 billion by 2025, according to the Oliver Wyman Report.

Lastly, the total addressable market, or “TAM,” represents the total potential opportunity across all of Latin America, including marketplace revenue, defined as take rate fees derived from e-commerce marketplace gross merchandise volume. The retail financial services and marketplace revenue opportunity amounted to US$186 billion in 2020 and is projected to grow at a CAGR of 8% to US$274 billion by 2025, according to the Oliver Wyman Report.

According to the Oliver Wyman Report, retail credit for individuals and SME credit accounted for approximately 75% of the revenue pool for retail financial services in 2020. This is the segment where we believe we have strong competitive advantages as result of our superior underwriting capabilities, lower customer acquisition costs and ample funding. The fee portion of this revenue pool, composed of cards, investments, insurance brokerage and marketplace, accounts for 25% and is projected to have a CAGR of 11% from 2020 to 2025.

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Total Addressable Market (in US$ billions)

A Market that is Ripe for Disruption

Consumers and SMEs in Latin America have long faced a banking system with substantial challenges that create attractive opportunities for disruptors, including:

Highly Concentrated Banking Sector – The banking sector in Latin America is highly concentrated, controlled by a small number of incumbent financial institutions in each country. According to the respective Central Banks, the five largest banks in each of Brazil, Mexico and Colombia control between 70% and 90% of all loans, deposits and overall banking revenue in their respective markets, a share that is significantly higher than those of most developed markets.

Lack of Competition – Given its highly concentrated nature, the Latin American banking sector has long-suffered from a lack of competition. We believe this has resulted in less innovation, a more limited selection of products and services, and higher fees than in the more open and competitive markets of the United States and Europe. While this concentration has enabled the large incumbent banks to maintain their status quo, we believe it also creates a very fertile environment for disruption from new entrants who can use advanced technology, data and customer service to level the playing field.

High Cost-to-Serve – The incumbent banks in Brazil have large and expensive branch distribution networks supported by large workforces and antiquated legacy systems. Each of the five incumbents are reported to have between 3,000 and 5,000 branches and around 80,000 employees each. We believe this antiquated legacy infrastructure has translated into a higher cost-to-serve, providing incumbents with an incentive to sell high-margin products to customers that are not always in their best interests while excluding a large segment of the population from the financial system. We estimate that in Brazil, our cost to serve per customer is more than 90% lower than those of incumbents, based on their publicly available financial statements. According to the Oliver Wyman Report, fees for Brazilian incumbents accounted for 29% of their operating income in 2020, compared to 16% in the United Kingdom.

Poor Customer Service – We believe that incumbent financial service providers in Latin America have historically provided poor customer service to consumers, given a lack of market competition and alternative choices. Alternatively, our obsession with customer-centricity aimed at delighting customers enabled us to achieve and scale with NPS levels of 90 in the countries in which we operate, which far exceeds not only that of incumbent banks, but also of all other major local financial technology companies. We have also been recognized for fewer complaints and superior customer service when compared to both incumbents and disruptors.

Lack of Trust in Incumbents – The high concentration of the banking sector, historic lack of competition and high cost-to-serve that characterize financial services industry in Latin America have led to a pattern of behavior that has engendered a lack of trust from customers. We believe that repeated negative interactions with banks providing poor customer service, high and hidden fees and restricted access to credit have led customers to believe that banks are primarily and exclusively focused on their own profits and servicing more affluent customers.

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Addressable Market Opportunities

As we serve our customers through the Five Financial Seasons of spending, saving, investing, borrowing and protecting, we believe we will benefit from and continue to be a catalyst for:

Deepening of Financial Services – The Latin American banking sector remains significantly underpenetrated. In Brazil, 30.0% of the 169 million people aged 15 and above did not have a bank account as of 2017, according to the World Bank. In Colombia and Mexico, the unbanked population in 2017 stood at 55.1% and 64.6% of the 40 million and 96 million people aged 15 and above, respectively, according to the World Bank. Together, these three countries account for 134 million unbanked adults, according to the World Bank. Aggregate household debt in Latin American economies averaged between 5% and 30% of GDP in 2019 according to the Oliver Wyman Report, compared to between 55% and 80% in the developed economies of the United States, Western Europe and Japan. Lastly, credit card penetration in Brazil, Colombia and Mexico stood at 27.0%, 13.9% and 9.5% of the population aged 15 and above, respectively, compared to 65.6% in the United States and 65.4% in the United Kingdom, according to World Bank data for 2017. Among the main reasons for such low levels of financial inclusion are the prohibitively high costs for financial services. According to a study from the Inter-American Development Bank, or the “IDB,” one of the most cited reasons for not having a bank account is that opening and maintaining accounts are too expensive. We believe financial technology companies such as ourselves have the potential to completely change this landscape in Latin America by offering both low-cost and high-quality financial services to large portions of the adult population of the region, materially increasing the overall social-economic development and the addressable market of financial services in the region.

Shift Away from Incumbents Towards Digital Banking Platforms – We believe that the significant challenges and trends seen in the Latin American markets have already begun to encourage a shift away from incumbent banks and towards digital banking platforms. For example, according to the Oliver Wyman Report, between December 2017 and December 2020, the share of total outstanding retail credit attributable to digital banks and FinTechs in Brazil more than doubled from 2.0% to 4.6%, and is projected to rise to 13.0% by 2025.

Total Outstanding Balance of Retail Credit

Technological Innovation and Growing Volumes in Payments – We believe that technological innovation, including the launch of instant payment solutions such as PIX in Brazil and CoDi in Mexico, will translate to sustained growth in electronic payments volumes. Latin America is expected to have an 80% smartphone adoption rate in 2025 according to GSMA, further facilitating technology inclusion. According to the Oliver Wyman Report, purchase volumes on credit, debit and prepaid cards in Brazil are projected to grow from R$2.0 trillion in 2020 to R$3.6 trillion in 2025, representing a CAGR of 13%.

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Shift from Savings to Higher-Yield Investments – We believe that improving levels of financial education combined with middle class expansion and lower interest rates are driving Brazilian retail investors away from the inefficient savings products promoted by incumbents towards higher-yield investments such as equities. According to the Oliver Wyman Report, between 2018 and 2020, the share of retail investment assets controlled by banks decreased from 93% to 81%. We believe that the superior customer experiences and low-cost, open platform distribution models employed by independent brokers that are direct-to-consumer will continue to drive asset migration away from incumbents that rely on human agents. As financial technology adoption grows in the rest of the Latin America, we believe the trend in asset migration in Brazil will be replicated throughout the region.

Favorable Regulatory Environment – Regulators in Latin America are promoting several initiatives to foster financial technology disruption to increase competition and financial inclusion. For example, in 2020, the Central Bank of Brazil rolled out its plan to enable open banking while launching PIX, an instant payment tool. In Mexico, the 2018 Financial Technology Law established the basis for the development of FinTech companies, providing an environment that encourages competition with the large, incumbent banks. We believe that these regulatory changes will, together, increase efficiency, competition and innovation in the Latin American financial services market while increasing access to financial services.

Our Competitive Strengths and Advantages

We Have Significant Market and Leadership Advantages

#1 Digital Banking Platform – We have built the largest digital banking platform globally, with 36.9 million customers across Brazil, Mexico and Colombia as of March 31, 2021. Our customer base is nearly as big as the combined customer bases of the next three largest digital banking platforms in the United States, Europe and Latin America, according to a November 2020 report published by Autonomous Research. Our growth within Brazil and the scale we have achieved has enabled us to expand geographically into other Latin American markets that are ripe for disruption, such as Mexico and Colombia, and positioned us favorably for future expansion.

First Mover Advantage – We were the first digital-native banking platform in Brazil and a pioneer in digital financial services globally. We have leveraged this first-mover position to capture significant market share and create a deep competitive moat of loyal customers, proprietary data, technology development and domain expertise that we believe will be difficult for competitors to replicate.

World-Class Talent – We have attracted highly talented employees from some of the leading technology and financial services companies around the world who have brought deep expertise and new ideas in technology development, data science, product design, marketing, credit underwriting, business management, corporate strategy and human resources. Our employees are highly aligned with our mission and have an ownership mentality, with approximately 80% of our employees owning Nu shares or holding share-based incentive awards as of March 31, 2021.

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We Have Significant Operating and Financial Advantages

Our all-digital and data driven business model provides us with significant advantages, which have enabled us to scale and operate in a highly efficient manner. These operating advantages include:

Extraordinary Customer Experiences – Our modern and intuitive products provide customers with extraordinary experiences which we believe are superior to both incumbent banks and other digital disruptors. We have NPS levels of 90 in the countries in which we operate, which exceeds those of many of the strongest consumer brands in the world. We believe our reputation for exceptional customer experiences fuels our brand recognition, organic and word-of-mouth-driven growth and strong customer retention.

Proprietary Control and Capabilities from Our Technology Platform – We designed and made a significant investment to build our own cloud-based core banking platform, unlike many other FinTech companies or banks that typically are dependent on third-party core bank systems and credit card processors. Our NuCore platform enables us to centrally manage key functions, including our credit card transaction authorization and processing and core bank account processing, which has enabled us to operate efficiently, roll out new products or features with speed and agility, and expand into and scale in new markets faster and more effectively, facilitating our ramp up in Mexico and Colombia.

Low Operating Costs – We operate with a low-cost model across four key areas of our business:

Low Cost to Acquire – Given our focus on creating strong customer experiences, we have been able to acquire customers primarily through viral word-of-mouth and direct customer referrals, which has enabled us to add customers efficiently without expensive marketing campaigns or incentives.

Low Cost to Serve – By operating in a fully digital environment without the need for branches, and by consistently eliminating and simplifying processes, we have been able to serve our customers quickly and efficiently, creating scale efficiencies that we can pass along to customers and investors.

Low Cost of Risk – By leveraging our advanced technology and proprietary data science to better assess and reduce credit risk, we have been able to operate and scale efficiently and offer more competitive pricing to our customers.

Low Cost of Funding – Our large and growing base of local currency deposits, originated 100% organically, has enabled us to cover more than our funding needs and extend increasing amounts of credit to our customers, creating a highly resilient, diversified and low-cost funding model that we can scale efficiently.

Increasing Revenue per Customer – Our cohorts show that we have increased our revenue per customer over time, by (1) converting our strong customer experiences and low-and-grow credit underwriting approach into larger volumes and a greater wallet share of our customers’ financial lives, and (2) successfully cross-selling additional products to our customers.

High Customer Engagement – We believe that our continuous investments in technology and customer service combined with the compounding effects of our business model have (1) resulted in engagement rates closer to those of social networks than digital banking platforms; and (2) helped us increase customer engagement over time. This has resulted in an activity rate of approximately 70% in March

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2021, defined as the percentage of our customers generating revenue in the preceding 30-day period, which demonstrates the high frequency engagement and utility-like capabilities of our solutions.

Low Customer Churn – We believe that this high level of customer engagement has contributed to our low customer churn. In 2020, we had an average monthly (1) voluntary churn of 0.26%, which we measured as customers who chose to leave our platform; and (2) involuntary churn of 0.25%, which we measured as active customers who we removed from our platform due to risk or fraud concerns. We expect that voluntary churn will remain low as we continue to (1) deliver an extraordinary experience, (2) become the primary banking account for our customers, and (3) cross-sell to our existing customers to embed ourselves more deeply in their financial lives.

Effective Underwriting and Pricing – By using our unique data and advanced Nu^X Credit Engine, we underwrite customers and manage credit risk more effectively than incumbent banks who have been lending to consumers in our markets for over 100 years. As a result, we had a 90-day credit card delinquency rate of 2.7% for the 90 days ended March 31, 2021, which is approximately 31% lower than the industry average of 3.9%, according to a report issued by the Central Bank of Brazil, enabling us to price our products more competitively while still generating advantaged unit economics.

We Have Significant Strategic Advantages

Our self-reinforcing model also provides us with key strategic advantages that help us differentiate, grow and compete more effectively. These strategic advantages include:

Powerful Self-Reinforcing Network Effects – As we grow our business, we believe our model demonstrates distinct self-reinforcing network effects that help compound our growth. For example, as we expand our ecosystem of customers and partners, we generate more data, which enables us to improve our products and services and customer experience. As more existing customers are delighted with their experience, they refer new customers which, in turn, increases the size of our ecosystem.

Highly Defensible Business Model – We have built a disruptive business with a differentiated model that we believe has a strong competitive position in the market. We believe it is highly defensible and difficult to replicate given the significant time, expertise and investments required to build our capabilities across multiple countries. We have distinguished ourselves in the market due to the combination of our (1) large ecosystem with 36.9 million customers as of March 31, 2021 who are already engaged and becoming increasingly familiar with our growing suite of offerings, (2) highly trusted brand that is being recognized even beyond our markets, which enables us to reinforce and build new customer relationships, (3) large amounts of unique customer data that compounds in value as we grow, (4) proprietary technology platform, built from the ground up, that enables us to control our own destiny without relying on commoditized third-party vendor solutions, (5) advantaged unit economics that enable us to prioritize and monetize resources efficiently, and (6) unique, innovative and low-cost business model that enables us to reach customers throughout Brazil and other markets across Latin America in a quick and efficient manner.

Our Growth Strategies

Despite our success to date in building the largest digital banking platform in the world, we believe we are in the very early stages of capturing a very large market opportunity to simplify the daily lives of hundreds of millions of consumers and SMEs. We intend to leverage the competitive strengths and advantages of our self-reinforcing model to grow and expand our business and create value for customers and shareholders. Our primary growth vectors are:

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1. Grow Our Nu Ecosystem

Nurturing Our Customer Acquisition Engine – We continue to build our customer acquisition engine by:

Growing Our Base of Highly Loyal Customers – Who we believe will continue to refer customers to us. We will continue to create innovative, superior products that tap into latent demand, and to offer extraordinary financial solutions to consumers and SMEs who are unserved or underserved by incumbent banks, and foster green-field markets to accelerate customer acquisition.

Increasing Our Share of Customers’ Financial Lives – We believe we will continue to increase our share of customers’ financial lives by:

Cross-Selling New Products and Upselling to Higher-Value Products – As we accumulate more data and learn more about our customers, we can suggest new products to fit their needs and optimize their credit limits, increasing our wallet share across their Five Financial Seasons and growing the revenue and profits we generate from each customer. We have also sold customers multiple products at progressively faster rates. For example, our January 2021 customer cohort took approximately three months to reach an average of 3.5 products per customer, compared to over 12 months for the January 2020 customer cohort. Additionally, we have millions of customers who received access to a NuConta account but have not been approved to receive our credit products. As we continue to collect information on these customers and enhance our customer segmentation and credit models, we believe we will increase our approval rates and extend our full product suite to a significant share of these clients, at no marginal customer acquisition cost.

Utilizing Partners to Grow Our Marketplace of Offerings – As we identify new areas to address, we may also partner with best-of-breed providers to expand our product offerings in areas where we don’t currently have a core product or service. We believe this represents an important growth channel and will enable us to participate in more areas of our customers’ daily lives quickly and efficiently, strengthening our position as their primary financial relationship. For example, we have announced partnerships with (1) Chubb to provide a life insurance product and (2) Remessa Online to provide international remittance solutions, each of which can be originated and managed seamlessly through our Nu mobile app.

2. Enhance Our Nu Platform

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instant payment functionality, which initially included PIX, the new real-time payment system in Brazil, and, in May 2021, we launched WhatsApp Pay capabilities.

Innovating and Developing New Solutions – We are also developing new capabilities and solutions. For example, in July 2021, we launched a new credit card product called Ultraviolet which is a premium metal credit card offering with new features and a new rewards program to incentivize spending for our more affluent users.

Our Acquisition of Easynvest (Brazil) – In September 2020, we announced the acquisition of online broker Easynvest, which we believe is the largest digital-only retail investments platform in Brazil, with over 1.5 million customers. This acquisition enabled us to enter the online investing sector quickly and at scale. We received final regulatory approvals for the deal in May 2021 and closed the transaction in June 2021. Since then, we have rebranded the business as NuInvest and begun the process of integration with our business.

Our Acquisition of Cognitect (U.S.) – In July 2020, we announced the acquisition of a U.S.-based consultancy that developed the Clojure programming language and Datomic database, which we leverage for our efficient codebase and immutable database.

Our Acquisition of Juntos (U.S.) – In August 2021, we announced the acquisition of a conversational account management platform for two-way messaging customer interaction through mobile interfaces (WhatsApp, SMS and in app-chat), further strengthening our capabilities to foster strong customer engagement and product cross-sell in a hyper-scalable manner.

Making Strategic Minority Investments – We will selectively make strategic minority investments in companies where we have negotiated a commercial agreement or a partnership and want to create strong alignment. We believe these investments can provide us with access to third-party products and capabilities at a faster pace and in a highly capital efficient manner, particularly as we build our marketplace of offerings.

Our Investment in Jupiter (India) – In August 2021, we announced a venture investment in Jupiter, an emerging digital banking platform in India with several innovative solutions in development. India is one of the largest emerging markets in the world, and, together with Brazil, has pioneered the broad adoption of a central-bank led QR code-based real-time payments system expected to promote profound changes to how financial services are consumed and distributed.

3. Expand into New Markets

We believe our Nu Model also provides us with the capability to expand into new markets and scale quickly and efficiently. For example, we may consider expanding into:

New Geographies – We believe that we are in the early stages of our international expansion. We have leveraged our technology, data science and credit approach to expand efficiently into new markets. For example, we launched in Mexico in late 2019, and for the three months ended March 31, 2021, we were already among the top three credit card issuers in terms of number of credit cards issued in the period based on data for other card issuers as reported by the Central Bank of Mexico. In the future, we may also seek to grow our business by selectively expanding into new international markets where we can provide services to millions of consumers while disrupting the legacy models of traditional financial institutions.

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New Customer Segments – By implementing our core strategy of simplifying the daily lives of millions of consumers and businesses globally, we have been able to acquire customers across all socioeconomic backgrounds. For example, in 2021 we expanded into more mass affluent customer segments with the launch of our premium Ultraviolet credit card product and our entry into the online investing sector.

Our Products and Services

We offer a wide range of products and services for our customers. In Brazil, we offer customers products across the Five Financial Seasons: (1) spending, (2) saving, (3) investing, (4) borrowing, and (5) protecting. All our products are fully digital solutions to help us provide simple, convenient and low-cost services with a great user experience to our customers.

Spending Solutions

Our spending solutions are designed to help customers pay for goods and services in their everyday lives with a customized credit line or instantly through a mobile phone, while collecting loyalty points and rewards on applicable transactions. These include:

Solution

Description

Nu
Credit and Debit Card

Our core Nu Credit and Debit Card was our first product, launched in 2014. It is a Mastercard-branded international card that is 100% digital-enabled and acts as both a credit and a debit card.

Features and benefits include:

· No fees or annuity charges

· WhatsApp Pay, Android Pay and Apple Pay enabled

· Accepted by more than 30 million merchants all over the world

· Complete digital experience with broad control over mobile apps such as blocking and unblocking cards, managing credit limits and due dates for bill payments

· Discounts for early installment payments

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Solution	Description

Ultraviolet Credit and Debit Card	Our premium Ultraviolet Credit and Debit Card was launched in 2021 for our more affluent customers with higher transaction volume and NuInvest balances, or customers willing to pay a fee of R$49 per month. Features and benefits include: · Metal design · 1% cashback that yields 200% of the Brazilian interbank deposit rate, which may be exchanged for miles, invested or transferred to NuConta · Full benefits of Mastercard Black, including insurance on selected purchases and VIP airport lounge access · Access to exclusive NuInvest products
Mobile Payments	Instant payments for NuConta customers to make and receive transfers, pay bills and make everyday purchases any time through their mobile phone. Features and benefits include: · Real-time transfers through PIX, WhatsApp Pay or NuConta · Easy and secure payments using ‘PIX keys instead of lengthy bank information · Pay using traditional payment types such as an express wire transfer, or “TED,” and a credit transfer document, or “DOC” · No fees · Instant settlement · Available 24/7

Saving Solutions

Our savings solutions are designed to help our customers deposit, manage and save their money in a demand deposit account with a complementary debit card offering. These include:

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Solution

Description

NuConta
Personal
Accounts

NuConta is our fully digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings.

Features and benefits include:

· No annual or maintenance fees

· Access to all account details anytime through the app

· Auto-invest feature that automatically invests any existing balances in time deposits or government bonds, providing a yield equal to the Brazilian interbank deposit rate and instant liquidity

· Complementary contactless debit card

· Unlimited free transfers and payments

· Pay credit card with account balance for instant limit availability

· Real-time digital notifications for all activities

· Reserve account to store funds or lock them as time deposits for enhanced yields

· Ability to save set amounts on monthly basis for better spending control

· Access to cash withdrawals in more than 25,000 locations

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Solution	Description

NuConta Business Accounts	Our business accounts are similar to NuConta, but designed specifically for our entrepreneur customers and their businesses. This allows our customers to separate their business and personal transactions. Features and benefits include: · No annual or maintenance fees · Business debit card for easy purchases and withdrawals · Real-time access to account details · Unlimited transfers to and from the account · Set up regular expense payments · Receive payments from customers

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Investing Solutions

Our investing solutions are designed to help our customers invest their money easily and conveniently with access to a growing number of investment products and services. These include:

Solution

Description

NuInvest Investment Accounts

NuInvest is our investment product offered direct-to-consumer without the need for third-party brokers. We provide equity, fixed-income, options and ETF products as well as multimarket funds with curated asset allocations based on the customer’s risk profile and financial position in a trustworthy account.

Features and benefits include:

· Ability to invest as little as US$1

· Clear information in easy-to-understand language

· Transparent fee pricing

· Wide portfolio of investment choices

Protecting Solutions

Our NuSeguros protecting solutions are designed to help our customers secure life insurance and funeral benefits easily and at a low cost. These include:

Solution

Description

NuVida Insurance Policies

NuVida is our complete life insurance product, underwritten by Chubb, that can be customized by our customers based on their needs and budget.

Features and benefits include:

· Premiums as low as US$2

· Fast, simple, and clear application process

· Transparent and disruptive fee structure

· Fully customized packages to customers’ circumstances

· Easy claims process

· 24/7 customer service

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Borrowing Solutions

Our borrowing solutions are designed to provide our customers with unsecured loans that are easy to receive, manage and pay. These include:

Solution

Description

Personal Unsecured Loans

Easy-to-use fully digital loan enabled for our credit card and digital account customers. Our customers are in control from the pre-loan simulation through loan management.

Features and benefits include:

· Instantaneous and fully digital approval process, with borrowed funds deposited in NuConta

· Fair interest rates that are lower than the market average

· Transparent loan terms

· Better terms for customers with direct deposit into their NuConta account

· Easy simulation with control over the installments and principal payments in the mobile app

· Functionality for installment anticipation and renegotiation within the mobile app

Our Marketing and Distribution

We have created a member-get-member marketing strategy that leverages our high-quality products and services to delight customers, who may then refer us to their family, friends and peers. Over time, this strategy has enabled us to grow virally and acquire 86% of our customers organically in 2020, either through word-of-mouth or direct referral, without the need for significant marketing expenses. We believe this low-cost approach allows us to focus resources on improving the customer experience, which further enhances the virtuous cycle of our member-get-member strategy.

We employ various social and digital media initiatives to drive greater awareness and support across our ecosystem, foster the development of our online NuCommunity portal and promote our member-get-member strategy. These include:

Influencer Partnerships

We have partnered with Brazilian pop star and influencer Anitta, who is one of the largest and most recognizable musical artists and influencers in Brazil. She has secured five nominations for Latin Grammy awards and over 54 million followers on Instagram as of June 2021. Anitta will advise us on the rollout of selected new products, including our Ultraviolet card for more affluent consumers. Anitta also joined our board of directors in June 2021, where we expect she will leverage her deep understanding of consumer behavior and broad influence to support our growth.

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Proprietary Financial Education Content

We create proprietary educational content that we believe is a highly differentiated and powerful tool to (1) strengthen our brand and awareness, (2) attract new customers, and (3) improve engagement with existing customers. Our diverse content is distributed through multiple digital and social channels, including InvestNews, our proprietary content channel that offers daily coverage of news and educational content on economics, investments, finance and politics. As of March 31, 2021, the InvestNews channel on YouTube had 248,000 subscribers. Since its inception the channel has produced more than 1,200 videos and has accumulated 20.3 million in total views. Additionally, we distribute content through our blog, which has become a powerful search engine optimization benchmark in Brazil, covering over 200 thousand keywords, from branded topics, such as our products, to financial education, and amassed nearly 50 million unique visitors in 2020. In addition, as of March 31, 2021, we had a loyal following of 1.7 million monthly subscribers who receive a financial education newsletter.

Social Media

We maintain a strong social media presence across major platforms where we have attracted approximately 9 million followers and 24 million impressions across all social channels as of March 31, 2021. Our presence spans across Instagram, Facebook, Twitter, LinkedIn, YouTube, TikTok and our own NuCommunity portal, as illustrated in the table below. We have a leading social media position, with more followers across several social media platforms when compared to both incumbent banks and digital banks, including LinkedIn, Instagram and TikTok, based on our internal analysis of publicly available information.

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LinkedIn
3.4 million followers

Facebook
2.3 million followers

Instagram
2.2 million followers

YouTube
830,000 subscribers

Twitter
484,000 followers

TikTok
85,000 followers

Spotify
1,700 subscribers

NuCommunity
300,000 subscribers

Our Proprietary Technology and Data Platform

We use the latest cloud-based technologies and data science tools to deliver a superior experience for our customers in a hyper-scalable and secure environment. We prioritize building our own technology and investing in extraordinary engineering talent to operate and enhance a proprietary technology platform that was purpose-built for our mission. The key components of our technology include:

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NuCore Technology Platform – All of our products, services and operations are powered by NuCore, our proprietary, cloud-based core banking platform that we designed and built from the ground up. NuCore enables us to centrally manage several key functions of the business, which provides us with greater speed and control to optimize our products and address the needs of the markets in which we operate. The key functions of NuCore include:

Transaction Authorization and Processing – which allows us to efficiently monitor transactions across our ecosystem.

Core Banking – which allows us to manage all banking applications and data across our ecosystem.

Regulatory Reporting – which allows us to manage regulatory requirements and generate reports for regulators in an automated environment.

Business Operations – which automates significant parts of the operations across our business.

Credit Underwriting – which supports our proprietary data analytics and credit scoring algorithms necessary to differentiate our credit services from those of the incumbents in the industry.

Fraud Prevention – powered by our data analytics, artificial intelligence and proprietary algorithms, which enhances fraud prevention proactively and automatically.

Experimentation Platform – We leverage an experimentation platform that allows us to quickly test, measure and validate all applications and data models before we deploy in a live environment, which helps us improve decision making and agility when launching new technology.

Microservices Approach – We use a versatile, decentralized technology architecture to manage and deploy over 500 modular microservices that we have developed. This advanced technology strategy enables us to: (1) scale, (2) launch new products, (3) enter new markets, and (4) update our codebase in a fast and highly efficient manner.

Product Platformization – We designed our technology platform to enable product development and new capability deployment to occur seamlessly across our applications. Our platformization approach enables faster product and market launches.

Immutable Database – We have created an advanced, immutable ledger, utilizing the Datomic database technology we own, which provides us with a highly reliable audit trail and transaction history that we believe provides better accuracy, control, reliability and transparency when compared to traditional database architectures.

Cloud-Based Architecture – We employ an architecture and infrastructure that is designed for scalability, efficiency and security. We operate in a fully cloud-based environment, leveraging the latest technologies to optimize our performance and increase capacity as needed, which enables us to manage our growth efficiently and cost effectively. We have partnered with AWS to be our primary third-party cloud infrastructure provider.

Machine Learning and Artificial Intelligence – Through the utilization of our data analytics and customer insight, we are able to utilize artificial intelligence and machine learning algorithms to enhance our customer experience and product offerings. As a result of our available customer data, our systems power a self-driving experience where we provide customers with real-time recommendations on products that meet their specific needs throughout their financial journey.

Operate at Low Marginal Costs – The architecture and various operating advantages of the NuCore Technology Platform enable us to run our business efficiently and with low incremental costs as we scale our business.

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Our Customer Service and Support

We service and support our customers with convenient, caring and high-quality customer service and support teams. We also leverage technology tools to streamline the customer support experience, empowering our customer service agents. Together this combination of human-centric and technologically advanced support has enabled us to achieve an industry-leading NPS. Our customer service and support functions, processes and tools were designed from the bottom-up to embody our strong customer-centric culture, strengthen our relationship with customers and create fanatical customers who will refer Nu to their peers. These teams, technologies and programs include:

Xpeers – We have assembled a team of highly trained and passionate customer service agents with a human-focused mentality who we call our Xpeers. Our Xpeers are trained to be subject-matter experts empowered to solve customer questions at first contact, which can be made by chat, email or phone. We utilize our data analytics and artificial intelligence insights to direct customers to the best-suited Xpeer team-member, improving resolution times and, we believe, customer satisfaction. We employ a strategy of using internal and external resources for customer support that provides us with the ability to maintain the highest customer service quality alongside our hyper-growth. In the three months ended March 31, 2021, over 90% of the calls received were answered in less than 45 seconds and the customer satisfaction rate for the calls exceeded 92. We measure the customer satisfaction rate as the percentage of customers who rate our customer service as a 4 or a 5 on a scale of 1 to 5.

WoW Approach – We have developed an approach for our Xpeers that builds stronger human connections and delights our customers with excellent customer service. We call this our WoW Approach. We have a team of over 100 customer excellence professionals to train and manage the WoW Approach across our customer service team. Additionally, we encourage Xpeers to send a gift of their choosing to customers when they build a real human connection during a positive customer experience. In the first three months of 2021, we sent more than 16,000 gifts to customers across Brazil. There are many instances where customers post their positive experiences on social media, which continues to fuel our referral and word-of-mouth customer acquisitions strategy.

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Shuffle – We have developed a technology platform to support our Xpeers and simplify customer service that we call Shuffle. This platform provides our Xpeers with a robust interface that features a single go-to application for up-to-date information on the customer, interaction history and insights into the likely problem the customer is facing, which enables our Xpeers to address the issue quickly and efficiently. On the backend, Shuffle connects to another proprietary platform called Proximo!, which intelligently tags each customer inquiry with a “reason” and routes these inquiries to the agent with the greatest level of expertise in this area, allowing them to tackle the next most important task in line. This ecosystem helps to maximize first contact resolution and minimize transfers and friction for the customers. We employ a dedicated team of 30 engineers to build and maintain technology tools for our Xpeers.

Our Approach to Risk Management

Our approach to risk management is core to our business model and has been designed to reduce friction, onboard unbanked or underbanked customers and drive credit delinquencies below the industry average. We are continuously improving our risk management functions by using data and technology to reduce the risk in our business and improve our credit underwriting engine. There are three components to our risk management approach:

Enterprise Risk Management – We have developed a robust enterprise risk management and governance program that allows us to minimize risks while also delivering customers a frictionless experience. We do this by combining modern risk management systems employed by some of the most sophisticated financial services companies in the world with the latest in data science and machine learning models.

Low-and-Grow Approach – We employ a low-and-grow credit strategy, in which we typically begin customers that have no or little available credit information with a very small credit line and slowly extend this credit line over time as we learn more about their behavior and better understand credit risks. This approach allows us to quickly separate the good borrowers from the bad by tracking customer behavior over time. As we collect more data and better understand their financial habits, we extend the credit lines. This is an iterative approach which has enabled us to effectively underwrite and onboard customers with little to no credit history.

Nu^X Credit Engine – We use an internally developed credit engine, called Nu^X, which leverages proprietary and alternative data sources to underwrite and monitor our credit products more effectively. Our Nu^X Credit Engine, supported by a dedicated team, is self-learning and benefits from increasing scale as we ingest, test, monitor and enhance our credit algorithms over time to manage the risks of our credit portfolio. Our model is robust enough to allow us to underwrite to a large set of customers while maintaining a 90-day

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delinquency rate of 2.7% for our credit card customers in Brazil as of March 31, 2021, compared with an industry average 90-day delinquency rate of 3.9% as of the same date. We have successfully operated with a low-risk credit portfolio through some of the most volatile macroeconomic events, including Brazil’s worst recession on record occurring between 2016 and 2018. We believe Nu^X is portable to new markets by leveraging our ability to ingest, analyze and react to credit data in a specific market. For example, through the fast collection of proprietary data and the progressive improvements of new credit models in Mexico, from March 2020 to March 2021, we have been able to nearly double our approval rates, while reducing our probability of default, or “PD,” by more than 50% compared to our initial credit models.

Liquidity Risk Management – Our liquidity risk framework leverages data to capture all contractual cash flows, and over those we apply a stress scenario coherent with the credit models we use in our business, but more severe. In addition, we apply a shock designed to cover operational risk events that may impact our liquidity. The combination of both shocks produces a very severe yet plausible scenario that helps ensure resilience from a liquidity management perspective.

Our Information Security Initiatives

Our well-trained and dedicated team of cybersecurity professionals hold various global industry certifications, including SysAdmin, Audit, Network, and Security, or “SANS,” National Institute of Standards and Technology, or “NIST,” International Council of E-Commerce Consultants, or “EC-Council,” and Information Systems Audit and Control Association, or “ISACA,” and monitor our systems and transactions around the clock and work to keep our data and environment secure. This team monitors and upholds stringent security and compliance policies in line with global best practices, including the ISO27000 standards, NIST standards, MITRE ATT&CK framework, payment card industry, or “PCI,” standards and Open Web Application Security Project, or “OWASP,” best practices. Our security team monitors all employees and third parties who access our platforms and manage tight authentication controls and physical authorization technologies in all our operating environments. We also have adopted safe coding and development practices.

At the heart of this strategic imperative is our commitment to providing secure and protected products and services to our customers. We have invested heavily in building internal capabilities to help ensure that our control system meets the demands of our hyper-growth plan. We leverage our unique technology stack and engineering capabilities to continuously enhance our security layers. For instance:

Code to Minimize Vulnerabilities – We utilize a less common code language, Clojure, which allows us to operate efficiently, but also minimizes our exposure to common security vulnerabilities and to complement further, we have developed Clojure secure code analysis tools. We also update our code frequently, resulting in a constantly evolving environment, which we believe makes our code less vulnerable to exploitation. In the three months ended March 31, 2021, we pushed 100+ code deployments per day, on average.

Continuous Security Testing – We believe in building assurance in our security through practical, continuous and independent testing. We have a public responsible disclosure program and private bug bounty program with HackerOne, an industry leader in crowdsourced security testing. We conducted penetration tests with a variety of external security partners, and we conducted ethical hacking using our highly skilled in-house offensive security team to further secure our critical internet-facing infrastructure and mobile application.

In-Depth Vendor Security and Onboarding – We run in-depth security due diligence and continuously assess vendors and suppliers we bring onboard to help ensure that our security standards are being met. We continuously real-time scan our suppliers to identify vulnerabilities in their public-facing infrastructure that may put us at risk, and we work with them to fix gaps.

Cybersecurity Intelligence – We have a highly capable in-house threat intelligence team working to track and disrupt cyber criminals before they can launch attacks on us and our customers. We compliment this capability with threat intelligence partners who are embedded in the hacker community to identify indicators of risk.

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We complement our multitude of internal controls with additional intelligence from our industry-leading security partners to help ensure we maintain defense-in-depth control design. They provide us with additional support and protection on controls, operations and around-the-clock incident response and recovery.

Legal Proceedings

We are, and may be, from time to time, involved in disputes that arise in the ordinary course of our business. Any claims against us, whether meritorious or not, can be time consuming, result in costly litigation, require significant management time and result in the diversion of significant operational resources.

We are subject to a number of judicial and administrative proceedings, including civil, labor and tax law and social security claims and other proceedings, which we believe are common and incidental to business operations in general. We recognize provisions for legal proceedings in our financial statements, when we are advised by independent outside counsel that (1) it is probable that an outflow of resources will be required to settle the obligation; and (2) a reliable estimate can be made of the amount of the obligation. The assessment of the likelihood of loss includes analysis by outside counsel of available evidence, the hierarchy of laws, available case law, recent court rulings and their relevance in the legal system. Our provisions for probable losses arising from these matters are estimated and periodically adjusted by management. In making these adjustments our management relies on the opinions of our external legal advisors.

As of March 31, 2021, we have provisions recorded in our unaudited condensed consolidated interim financial statements in connection with legal proceedings for which we believe a loss is probable in accordance with accounting rules, in an aggregate amount of US$15.5 million and have made judicial deposits in an aggregate amount of US$15.1 million. However, legal proceedings are inherently unpredictable and subject to significant uncertainties. If one or more cases were to result in a judgment against us in any reporting period for amounts that exceeded our management’s expectations, the impact on our results of operations or financial condition for that reporting period could be material. See “Risk Factors—Risks Relating to Regulatory Matters and Litigation—Litigation, proceedings or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial condition and results of operations.”

For further information, see note 20 to our audited consolidated financial statements and note 19 to our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus.

Intellectual Property

We rely on a combination of trademark, domain names and trade secret laws, as well as employee and third-party non-disclosure, confidentiality and other types of contractual arrangements to establish, maintain and enforce our intellectual property rights, including with respect to our proprietary rights related to our products and services. In addition, we license technology from third parties.

As of March 31, 2021, we did not own any Brazil-issued patents or copyrights. However, we filed a patent application on May 10, 2021 before the United States Patent and Trademark Office and the Patent Cooperation Treaty system, which is under analysis. We own a number of trademarks including Nu, NUBANK and its variations, and other valuable trademarks and designs covering various brands, products and services, including the credit card, the account, insurance and other services provided by Nu. We also own a number of domain names registered in Brazil, including “nubank.com.br” and “nu.com.br”, and abroad such as “nu.com.mx” and “nu.com.co”.

As of the date of this prospectus, our application to register the trademark “Nu” in the United States is pending approval by the relevant authority. We have already obtained registration in class 36 in the United States for the trademark “NUBANK”.

Properties

Our operational headquarters are located in the city of São Paulo, state of São Paulo, Brazil, which includes the majority of our product development, sales, marketing, and business operations. Our principal executive offices consist of approximately 8,508.0 square feet of space under a lease that expires in October 2023. We also have offices in several other locations, including offshore in Mexico, Colombia, Argentina and Germany, and believe our facilities are sufficient for our current needs.

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As of March 31, 2021, we had a services agreement with a data center service provider for the provision of data services to us from its data centers in São Paulo, Brazil, and different locations in the United States. We believe that our facilities are suitable and adequate for our business as presently conducted, however, we periodically review our facility requirements and may acquire new space to meet the needs of our business or consolidate and dispose of facilities that are no longer required.

Our Competitive Landscape

We believe that we are changing the consumption patterns for financial products and services and growing the market, but will continue to face competition from other firms including large legacy financial institutions, large technology companies, and smaller, new financial technology entrants.

We believe that the key competitive factors in our market include:

our culture of customer-centricity;

product features, quality and functionality;

operating efficiency;

engineering, data science and product talent;

brand recognition;

security and trust;

product and technology platform; and

regulatory licenses.

We believe that our ability to innovate quickly further differentiates our platform from our competition. We believe we compete favorably across all key competitive factors and that we have developed a business model that is difficult to replicate.

Human Capital Resources

As of March 31, 2021 and as of December 31, 2020, 2019 and 2018, we had 2,899, 2,608, 2,326 and 1,210 employees, respectively. As of March 31, 2021, all of our employees were based in our offices in Brazil, Mexico, Colombia, Argentina, the United States and Germany.

The table below breaks down our full-time personnel by function as of March 31, 2021:

Function	Number of Employees		% of Total
Management		429		14.8
Technology		742		25.6
Sales and Marketing		128		4.4
Customer Support		831		28.7
General and Administrative		769		26.5
Total		2,899		100.0

Our employees in Brazil are affiliated with the unions of independent sales agents and of consulting, information, research and accounting firms for the geographic area in which they render services. We believe we have a constructive relationship with these unions, as we have never experienced strikes, work stoppages or disputes leading to any form of downtime.

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Additional Information

We are a Cayman Islands exempted company incorporated with limited liability. We were incorporated as Nu Holdings Ltd. on February 26, 2016. Our principal executive offices are located at the offices of Campbells Corporate Services Limited, Floor 4, Willow House, Cricket Square, KY1-9010 Grand Cayman, Cayman Islands. Our telephone number at our principal executive offices is +1 345 949 2648. Our principal website is www.nubank.com.br. The information that appears on our website is not part of, and is not incorporated into, this prospectus.

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Management

We are managed by our board of directors and by our senior management, pursuant to our Memorandum and Articles of Association and the Cayman Islands Companies Act (as revised).

Board of Directors

As of the date of this prospectus, our board of directors is composed of eight members. Each director is appointed for a one-year term, unless they resign or their office is vacated earlier, provided, however, that such term shall be extended beyond one year in the event that no successor has been appointed (in which case such term shall be extended to the date on which such successor has been appointed). Directors appointed by the board of directors hold office until the next annual general meeting. None of our board members have contracts that provide for benefits upon termination of employment.

Our Memorandum and Articles of Association that will be in effect upon the closing of this of offering will provide that from and after the date on which David Vélez Osorno (together with his affiliates), or our founding shareholder, no longer beneficially owns more than 50% of the aggregate voting power of all of our issued shares having the right to receive notice of and vote at our annual general meetings, or the classifying date, the directors shall be divided into three classes designated Class I, Class II, and Class III. Each director shall serve for a term ending on the date of the third annual general shareholders meeting following the annual general shareholders meeting at which such director was elected, provided that directors initially designated as Class I directors will serve for a term ending on the date of the first annual general shareholders meeting following the classifying date, directors initially designated as Class II directors shall serve for a term ending on the second annual general shareholders meeting following the classifying date, and directors initially designated as Class III directors shall serve for a term ending on the date of the third annual general shareholders meeting following the classifying date. The directors nominated by our founding shareholder shall be allocated to the longest duration classes unless otherwise determined by our founding shareholder. The members of our board of directors to be in place upon consummation of this offering will hold office until our next annual general meeting.

Our directors do not have a retirement age requirement under our Memorandum and Articles of Association.

The following table presents the names of the current members of our board of directors.

Name	Age		Position(s)
David Vélez Osorno		39	Chairman and Chief Executive Officer(3)
Doug Leone		64	Director(2)*
Anita Sands		45	Director(1)*
Daniel Krepel Goldberg		45	Director(3)*
Luis Alberto Moreno Mejía		68	Director(2)(3)*
Jacqueline Dawn Reses		51	Director(1)(2)*
Larissa de Macedo Machado (Anitta)		28	Director(3)
Rogério Paulo Calderón Peres		59	Director(1)*

(1)

Member of the Audit and Risk Committee.

(2)

Member of the Leadership Development, Diversity and Compensation Committee.

(3)

Member of the Stakeholders Committee.

Independent Director

The following is a brief summary of the business experience of our directors. Unless otherwise indicated, the current business address for our directors is Rua Capote Valente, 39 - Pinheiros, São Paulo, Brazil.

David Vélez Osorno is our founding shareholder, the chairman of our board of directors and our chief executive officer. He has also been a member of our Stakeholders Committee since July 2021. Before founding Nu in 2013, David was a partner at Sequoia Capital between January 2011 and March 2013, in charge of the firm’s Latin American investments group. Before Sequoia, David worked in investment banking and growth equity at Goldman

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Sachs, Morgan Stanley and General Atlantic. He holds a Bachelor’s of Science in Management Science and Engineering and a Master’s in Business Administration, both from Stanford University.

Doug Leone is a member of our board of directors, a position he has held since 2016. He has also been a member of our Leadership Development, Diversity and Compensation Committee since July 2021. As Managing Partner of Sequoia Capital since 1996 and Global Managing Partner since 2012, Doug has partnered with companies including RingCentral and ServiceNow. He began his career in tech at Sun Microsystems, Hewlett-Packard, and Prime Computer, before joining Sequoia Capital in 1988. He holds a Bachelor’s of Science in Mechanical Engineering from Cornell University, a Master’s of Science in Industrial Engineering from Columbia University, and a Master’s of Science in Management from the Massachusetts Institute of Technology.

Anita Sands is a member of our board of directors, a position she has held since October 2020. She has also been a member of our Audit and Risk Committee since June 2021. Dr. Sands has served on the board of directors of ServiceNow, Inc. since July 2014 and on the board of directors of Pure Storage, Inc. since July 2015. She has also served on the board of directors of SVF Investment Corp. since January 2021 and Khosla Ventures SPAC Sponsor II LLC since February 2021. From April 2012 to September 2013, Dr. Sands served as group managing director, head of change leadership and a member of the wealth management americas executive committee of UBS Financial Services, a global financial services firm. Prior to that, from April 2010 to April 2012, Dr. Sands was group managing director and chief operating officer of UBS Wealth Management Americas at UBS Financial Services, and from October 2009 to April 2010, Dr. Sands was a transformation consultant at UBS Wealth Management Americas. Prior to joining UBS Financial Services, Dr. Sands was managing director, head of transformation management at Citigroup N.A.’s global operations and technology organization. Dr. Sands also held several leadership positions with RBC Financial Group and the Canadian Imperial Bank of Commerce (CIBC). Dr. Sands holds a Bachelor’s of Science in Physics and Applied Mathematics and a Doctoral Degree in Atomic and Molecular Physics, both from The Queen’s University of Belfast, Northern Ireland, and a Master’s of Science in Public Policy and Management from Carnegie Mellon University. She is currently the James Wei Visiting Professor in Entrepreneurship at Princeton University.

Daniel Krepel Goldberg is a member of our board of directors, a position he has held since April 2021. He has also been a member of our Stakeholders Committee since July 2021. He is currently a partner and head of Latin America at Farallon Capital Management, positions he has held since August 2011. He was the president of Morgan Stanley in Brazil from April 2010 to August 2011. Between January 2003 and December 2006, he headed the Economic Law Secretariat of the Ministry of Justice, a former body of the Brazilian antitrust and consumer protection system. He holds a Bachelor’s Degree and a Doctoral Degree in Law from the University of São Paulo. In addition, he received a Master’s of Laws from Harvard Law School.

Luis Alberto Moreno Mejía is a member of our board of directors, a position he has held since April 2021. He has also been a member of our Leadership Development, Diversity and Compensation Committee and of our Stakeholders Committee since July 2021. He joined us after his 15-year tenure as the President of the Inter-American Development Bank Group from October 2005 to September 2020, and has served as a Managing Director at Allen & Co. since February 2021. He has also served as Colombia’s Ambassador to the United States for seven years from October 1998 to June 2005. He had a distinguished career in business and government. As Minister of Economic Development between July 1992 and January 1994, and was head of the Instituto de Fomento Industrial, Colombia’s public sector holding company. In the private sector he was the executive producer of TV Hoy. He holds a Degree in Business Administration and Economics from Florida Atlantic University and a Master’s in Business Administration from the Thunderbird School of Global Management. In 1990, Harvard University awarded him a Neiman Fellowship for his achievements in the field of journalism.

Jacqueline Dawn Reses is a member of our board of directors, a position she has held since March 2021. She has also been the Chair of our Leadership Development, Diversity and Compensation Committee since July 2021 and a member of our Audit and Risk Committee since June 2021. She is the chief executive officer of Post House Capital and most recently served as executive chair of Square Financial Services LLC and capital lead at Square, Inc., a publicly traded financial services company which provides services to small businesses and consumers, from October 2015 to October 2020. From February 2016 to July 2018, she also served as people lead at Square, Inc. From September 2012 to October 2015, she served as chief development officer of Yahoo! Inc. Prior to Yahoo, she led the U.S. media group as a partner at Apax Partners Worldwide LLP, a global private equity firm, which she joined in 2001. As of 2020, she serves on the boards of National Public Radio and the Wharton School of the

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University of Pennsylvania. She has also served on the board of directors of Affirm, Context Logic and Pershing Square Tontine Holdings, Ltd. since July 2020 and has been the chairperson of the Economic Advisory Council of the Federal Reserve Bank of San Francisco since 2015. She previously served on the board of directors of Alibaba Group Holding Limited, Social Capital Hedosophia Holding Corp. and Social Capital Hedosophia Holding Corp III. She holds a Bachelor’s of Science in Economics with honors from the Wharton School of the University of Pennsylvania.

Larissa de Macedo Machado (Anitta) is a member of our board of directors, a position she has held since June 2021. She has also been a member of our Stakeholders Committee since July 2021. She has been a well-known contemporary pop artist since 2012 and is currently the Brazilian woman with the most followers on Instagram (over 54 million), and maintains an active social media presence, having been ranked as one of the most influential celebrities by Billboard and one of the 100 most influential and creative people in the world by VOGUE. Since 2013, she is a five-time winner of the Best Brazilian Act on the MTV Europe Music Awards, and was the first Brazilian artist to win the Best Latin American Act award. In 2017, she was ranked as one of the most influential celebrities in social media according to Billboard. As a businesswoman, she manages her own career and production company and gathers numerous advertising contracts and partnerships with international brands. She holds a degree in pre-college administration from Instituto Superior de Educação do Rio de Janeiro (ISERJ/FAETEC). Since 2019, she continues to release additional musical partnerships and participates in collaborations with other artists.

Rogério Paulo Calderón Peres is a member of our board of directors and also the chairman of our Audit and Risk Committee, positions he has held since June 2021 and July 2021, respectively. As a financial expert, he served in PricewaterhouseCoopers Brazil as audit partner for nearly ten years until 2003 and then served as senior executive and chief financial officer at Bunge Brasil S.A. from 2003 to 2007, Unibanco S.A., Itaú Unibanco Holdings S.A. between 2010 and 2014 and HSBC Brasil S.A. (HSBC Latam) between 2014 and 2016. He has also served as a board member in Alupar Investimentos S.A. since December 2016 and Via Varejo S.A. (Via S.A.) since September 2019, both listed companies in Brazil. He has been the chairman of the audit committee and designated financial expert at B3 S.A. - Brasil, Bolsa, Balcão since April 2018 and a member of the compensation committee of Qualicorp Consultoria e Corretora de Seguros S.A. since 2019. He holds a Bachelor’s in Business Administration from Fundação Getulio Vargas and a Bachelor’s in Accounting from Fundação FAPEI, both in Brazil. He also holds a Brazilian registered accountant certification (Brazilian CPA) and has also attended several extension programs in strategy, finance, human resources and governance at Harvard University, Princeton University, University of Western Ontario, Fundação Getulio Vargas and Fundação Dom Cabral.

Executive Officers

Our executive officers are responsible for the management and representation of our company.

The following table lists our current executive officers:

Name	Age		Position(s)
David Vélez Osorno		39	Chief Executive Officer(1)
Guilherme Marques do Lago		42	Chief Financial Officer
Cristina Helena Zingaretti Junqueira		38	Co-Founder & Brazil CEO(1)
Youssef Lahrech		47	Chief Operating Officer
Jagpreet Singh Duggal		47	Chief Product Officer
Henrique Camossa Saldanha Fragelli		44	Chief Risk Officer
Renee Grace Mauldin Atwood		42	Chief People Officer
Matt Swann		51	Chief Technology Officer
Vitor Guarino Olivier		32	Vice-President of Operations and Platforms

(1)

Member of the Stakeholders Committee.

The following is a brief summary of the business experience of our executive officers. Unless otherwise indicated, the current business address for our executive officers is Rua Capote Valente, 39 - Pinheiros, São Paulo, Brazil.

David Vélez Osorno. See “—Board of Directors.”

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Guilherme Marques do Lago is our Chief Financial Officer, a position he has held since February 2021 and served as our vice president of finance from March 2019 to February 2021. From April 2006 to March 2019, he served in various positions at the Credit Suisse Group AG, including as managing director in its investment banking group. He also previously worked at McKinsey & Company from 2005 to 2006. He holds a Bachelor’s of Science in Industrial Engineering from Escola Politécnica da Universidade de São Paulo and a Master’s in Business Administration from the Harvard Business School.

Cristina Helena Zingaretti Junqueira is our Co-Founder & Brazil CEO, a position she has held since February 2021. She has also been the chair of our Stakeholders Committee since July 2021. As one of our co-founders, she has already held several functions and currently has a global role leading functions like marketing, communications, ESG, legal and public policy. Cristina began her career in strategic consulting, working at BCG (Boston Consulting Group) and before founding Nu in 2013, worked for several years at Itaú Unibanco S.A. with products and marketing in consumer credit and cards. In 2017, Cristina was named one of the 40 most powerful women in Brazil according to Forbes magazine and also received the Cláudia Award, which is the largest women’s award in Latin America, in the Business category. She has a Bachelor’s and a Master’s in Industrial Engineering from Escola Politécnica da Universidade de São Paulo and a Master’s in Business Administration from the Kellogg School of Management at Northwestern University.

Youssef Lahrech is our Chief Operating Officer, a position he has held since 2020. He runs our credit card, lending, and investments businesses in Brazil, as well as our international businesses in Mexico and Colombia. In addition, he is responsible for operations, analytics, credit, and data science. Before joining us in 2020, he spent nineteen years at Capital One helping build and grow businesses in Canada and the United States, playing a number of roles involving product, analytics, risk, and technology. He holds a degree in Mathematics from the Ecole Polytechnique and a degree in Engineering from the École des Ponts ParisTech, both in France as well as a Master’s in Engineering from the Massachusetts Institute of Technology.

Jagpreet Singh Duggal is our Chief Product Officer, a position he has held since 2020. Prior to joining us, he worked at several companies, including as a director of product management at Facebook from May 2018 to January 2020, senior vice president at Quantcast Corporation from June 2011 to March 2018 and head of strategy at Google Inc. from 2006 to 2011. He holds a Bachelor’s in Mechanical Engineering from Yale University.

Henrique Camossa Saldanha Fragelli is our Chief Risk Officer, a position he has held since 2018. He is responsible for our risk analysis and compliance. He is in charge of all our risk and compliance related activities, including credit risk, market and liquidity risk, stress testing, model risk, operational and IT risk, regulatory compliance, ethics, and anti-money laundering teams. Before joining us in 2018, he was the global head of traded portfolio analytics at HSBC Bank PLC, based in London, from August 2015 to June 2018 and the head of traded risk analytics for Latin America at HSBC Brasil S.A. from July 2013 to August 2015. He also worked at WestLB as a risk director, based in London, from April 2012 to July 2013 and for LCH.Clearnet from October 2007 to April 2012. He holds a Bachelor of Arts in Economics from Universidade de São Paulo and a Master of Business Administration in Finance from the École des Hautes Études Commerciales de Paris (HEC Paris).

Renee Grace Mauldin Atwood is our Chief People Officer, a position she has held since 2018. She leads our People & Culture team and is responsible for ensuring the wellbeing and development of all our employees in their entire journey since they apply for a position. Talent acquisition, people growth, D&I, internal communications and employee experience, people operations, compensation and benefits, people analytics, global mobility and human resources business partner are among her responsibilities. Prior to joining us, she worked in talent acquisition, human resources, and worldwide corporate facilities and led the human resources area in big-tech companies like Google, Inc. from May 2010 to February 2014, Uber Technologies, Inc. from February 2014 to July 2016, Twitter, Inc. from August 2016 to February 2017, and Peeps Solutions from February 2017 to August 2018. She holds a Bachelor’s of Arts in Psychology from the University of Texas.

Matt Swann is our Chief Technology Officer, a position he has held since April 2021. From November 2018 to March 2021, he served as chief technology officer of Booking.com B.V. (Booking.com). From September 2017 to November 2018, he served as the chief technology officer of Stubhub, Inc. (Stubhub.com). From February 2015 to September 2017, he served as the chief information officer of the consumer division at Citibank N.A. From February 2006 to February 2015, he served as the vice president of global payments at Amazon.com, Inc. He currently serves on the board of directors at Payfare Inc. He holds a Bachelor’s of Science in Computer and Information Sciences from Arizona State University.

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Vitor Guarino Olivier is our Vice-President of Operations and Platforms, a position he has held since December 2019. From March 2019 to March 2020, he served as our vice president of consumers. From August 2016 to March 2019, he served as the general manager of our digital account products. From April 2014 to August 2016, he led our core financial services engineering team. Prior to joining us, he held positions in wealth management, credit, and foreign exchange at Banco BTG Pactual S.A. from August 2011 to March 2014. He holds a degree in Computer Science and Economics from Duke University.

Family Relationships

There are no family relationships among any of our executive officers or directors.

Foreign Private Issuer Status

Nasdaq/NYSE listing rules include certain accommodations in the corporate governance requirements that allow foreign private issuers, such as us, to follow “home country” corporate governance practices in lieu of the otherwise applicable corporate governance standards of Nasdaq/NYSE, except that we are required (a) to have an audit committee or audit board that meets certain requirements, pursuant to an exemption available to foreign private issuers (subject to the phase-in rules described under “—Committees of the Board of Directors—Audit and Risk Committee”); (b) to provide prompt certification by our chief executive officer of any material noncompliance with any corporate governance rules; and (c) to provide a brief description of the significant differences between our corporate governance practices and the Nasdaq/NYSE corporate governance practice required to be followed by U.S. listed companies.

We currently follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of Nasdaq/NYSE in respect of the following:

the majority independent director requirement under Section of the Nasdaq/NYSE listing rules;

the requirement under Section of the Nasdaq/NYSE listing rules that a compensation committee comprised solely of independent directors governed by a compensation committee charter oversee executive compensation;

the requirement under Section of the Nasdaq/NYSE listing rules that director nominees be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors;

the requirement under Section of the Nasdaq/NYSE listing rules that a listed issuer obtain stockholder approval when it establishes or materially amends a stock option or purchase plan or other arrangement pursuant to which stock may be acquired by officers, directors, employees or consultants;

the requirement under Section of the Nasdaq/NYSE listing rules that a listed issuer obtain stockholder approval prior to issuing or selling securities (or securities convertible into or exercisable for common stock) that equal 20% or more of the issuer’s outstanding common stock or voting power prior to such issuance or sale; and

the requirement under Section of the Nasdaq/NYSE listing rules that the independent directors have regularly scheduled meetings with only the independent directors present.

Cayman Islands law does not impose a requirement that the board consist of a majority of independent directors or that such independent directors meet regularly without other members present. Nor does Cayman Islands law impose specific requirements on the establishment of a compensation committee or nominating committee or nominating process.

Committees of the Board of Directors

Our board of directors has established an Audit and Risk Committee, a Leadership Development, Diversity and Compensation Committee and a Stakeholder Committee. The composition and responsibilities of each of the

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committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.

Audit and Risk Committee

Our audit and risk committee consists of Rogério Paulo Calderón Peres, Anita Sands and Jacqueline Dawn Reses, with Rogério Paulo Calderón Peres serving as chairperson, and Oscar Rodriguez Herrero acting as an observer. Our board of directors has determined that Rogério Paulo Calderón Peres, Anita Sands and Jacqueline Dawn Reses meet the requirements for independence under the listing standards of the Nasdaq/NYSE and SEC rules and regulations. Each member of our audit and risk committee also meets the financial literacy and sophistication requirements of the listing standards of the Nasdaq/NYSE. In addition, our board of directors has determined that Rogério Paulo Calderón Peres is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act. Following the completion of this offering, our audit and risk committee will, among other things:

select a qualified firm to serve as the independent registered public accounting firm to audit our financial statements, and overseeing the compensation of such firm;

help to ensure the independence and performance of the independent registered public accounting firm;

discuss the scope and results of the audit with the independent registered public accounting firm, and review, with management and the independent registered public accounting firm, our interim and year-end results of operation;

resolve any disagreements between management and the independent registered public accounting firm;

oversee our internal audit function;

develop procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

review our policies on risk assessment and risk management;

review related party transactions; and

approve or, as required, pre-approve, all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.

Our audit and risk committee operates under a written charter, that satisfies the applicable rules and regulations of the SEC and the listing standards of the Nasdaq/NYSE.

Leadership Development, Diversity and Compensation Committee

Our leadership development, diversity and compensation committee consists of Jacqueline Dawn Reses, Doug Leone and Luis Alberto Moreno Mejía, with Jacqueline Dawn Reses serving as chairperson. Our leadership development, diversity and compensation committee will, among other things:

review, approve, and determine, or make recommendations to our board of directors regarding, the compensation of our executive officers;

review, approve, and determine compensation of the members of our board of directors;

administer our equity compensation plans;

review and approve and make recommendations to our board of directors regarding incentive compensation and equity compensation plans;

establish and review general policies relating to compensation and benefits of our employees;

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review the programs and practices related to human capital management metrics, including hiring and turnover practices, employee development and engagement metrics;

review the leadership development process for senior management, including the recruitment, performance management, engagement, incentive and other programs to promote talent development and senior management selection in accordance with management succession planning; and

review and assess workforce inclusion and diversity and the administration of compensation programs in a non-discriminatory manner, including any policies or procedures related to the implementation of diversity and inclusion initiatives and programs, reports of progress against any established goals and metrics and public statements related to the Company’s commitment to diversity.

Our leadership development, diversity and compensation committee operates under a written charter which satisfies the applicable rules and regulations of the SEC and the listing standards of the Nasdaq/NYSE, subject to certain exemptions under the rules thereof for foreign private issuers and controlled companies.

Stakeholder Committee

Our stakeholder committee consists of Cristina Helena Zingaretti Junqueira, David Vélez Osorno, Daniel Krepel Goldberg, Larissa de Macedo Machado and Luis Alberto Moreno Mejía, with Cristina Helena Zingaretti Junqueira, one of our executive officers, serving as chairperson. The stakeholder committee takes into consideration and monitors our key stakeholders’ interests and provides insights and recommendations to our board of directors, with a view to create long-term value to stakeholders and society, among other things:

oversee our relationship and notable interactions with key stakeholders, as identified and modified by our board or directors from time to time;

engage with our senior management with regards to the stakeholder principles: we want customers to love us fanatically, we build strong and diverse teams, we make long-term strategic decisions, we ensure that all interactions with public officials are guided by an ethical and transparent relationship, and we want to fight bureaucracy, empowering our customers in respect to their financial lives;

review our progress and metrics with respect to the stakeholder principles, main initiatives and metrics, which include environmental, social and governance, or “ESG,” criteria; and

advise our board of directors and senior management in respect to initiatives that may address key stakeholders’ interest, considering our stakeholder principles.

Controlled Company Exception

Immediately after the completion of this offering, David Vélez Osorno will beneficially own % of our Class B ordinary shares, representing % of the voting power of our outstanding share capital (or % if the underwriters exercise their option to purchase additional Class A ordinary shares in full, including in the form of BDRs). As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the Nasdaq/NYSE corporate governance rules. Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.

As a “controlled company,” we may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our board of directors consist of independent directors; and (2) that our board of directors have a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. For so long as we qualify as a controlled company, we may take advantage of these exemptions. Accordingly, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements. In the event that we cease to be a “controlled company” and our ordinary shares continue to be listed on the Nasdaq/NYSE, we will be required to comply with the corporate governance standards within the applicable transition periods.

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Code of Business Conduct and Ethics

Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our code of business conduct and ethics will be posted on the investor relations page on our website. We intend to disclose any amendments to our code of business conduct and ethics, or waivers of its requirements, on our website or in public filings under the Exchange Act. The information on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be a part of this prospectus.

Compensation of Directors and Officers

Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere.

Our executive officers, directors and management receive fixed and variable compensation. They also receive benefits in line with market practice in Brazil and the countries in which we operate. The fixed component of their compensation is set on market terms and adjusted annually.

The variable component consists primarily of awards of shares, which are awarded under our share options long-term incentive program, as discussed below. For a description of our aggregate compensation expenses and the equity incentive plans available to senior management, see “Executive Compensation.”

Employment Agreements

Certain of our executive officers have entered into employment agreements with the Company, certain of which provide for notice of termination periods and include restrictive covenants.

Directors’ and Officers’ Insurance

In connection with this offering, we intend to obtain civil liability insurance coverage for acts carried out by our directors and executive officers in the course of their duties.

Share Ownership

The shares and any outstanding beneficially owned by our directors and officers and/or entities affiliated with these individuals are disclosed in the section entitled “Principal and Selling Shareholders.”

Shareholder’s Agreement

In connection with this offering, we will enter into a shareholder’s agreement, or the “Shareholder’s Agreement,” with our founding shareholder.

Among other things, the Shareholder’s Agreement will provide our founding shareholder with the right to nominate a certain number of directors based on the aggregate voting power of the issued share capital held by our founding shareholder and his affiliates, so long as our founding shareholder and his affiliates beneficially own shares accounting for at least 5% of the voting power of our issued share capital. The Shareholder’s Agreement will provide that, subject to compliance with applicable law and Nasdaq/NYSE rules, for so long as our founding shareholder and his affiliates beneficially own shares accounting for at least 40% of the voting power of our issued share capital, our founding shareholder shall be entitled to designate up to five nominees to our board of directors (or if the size of our board of directors is increased, a majority of the members of our board of directors); for so long as our founding shareholder and his affiliates beneficially own at least 25% of the voting power of our issued share capital, our founding shareholder shall be entitled to designate up to three nominees to our board of directors (or if the size of our board of directors is increased, one-third of the members of our board of directors); and for so long as our founding shareholder and his affiliates beneficially own at least 5% of the voting power of our issued share capital, our founding shareholder shall be entitled to designate one nominee to our board of directors (or if the size of our board of directors is increased, 10% of the members of our board of directors).

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In addition, the Shareholder’s Agreement will provide that for so long as our founding shareholder and his affiliates beneficially own at least 5% of the voting power of our issued share capital, our founding shareholder will have the right to designate its pro rata share of the total number of members of the Audit and Risk Committee and the Leadership Development, Diversity and Compensation Committee of our board of directors that is equal to the proportion that the number of directors designated by our founding shareholder bears to the total number of directors on our board, except to the extent that such membership would violate applicable law or Nasdaq/NYSE rules. The rights granted to our founding shareholder to designate directors pursuant to the Shareholder’s Agreement are additive to and not intended to limit in any way the rights that our founding shareholder or any of their affiliates may have to nominate, elect or remove our directors under our Memorandum and Articles of Association or laws of the Cayman Islands.

The Shareholder’s Agreement will also provide that for so long as founding shareholder and his affiliates beneficially own shares accounting for at least 10% of the voting power of our issued share capital, we will agree not to take, or permit our subsidiaries to take, certain actions without the prior written approval of David Vélez Osorno, including incurring indebtedness in excess of our net equity value on a consolidated basis, entering into transactions with our officers, directors or other affiliates (excluding our founding shareholder), making material changes to the strategic direction or scope of our business, adopting a shareholders’ rights plan, paying or declaring any dividend or distribution on our shares, entering into a merger, consolidation, reorganization or other business combination or a transaction or series of transactions that would result in a change of control, any liquidation, dissolution, receivership, commencement of bankruptcy, insolvency or similar proceeding, authorizing or issuing any share capital or any security convertible, exchangeable or exercisable for any share capital (subject to specified exceptions), acquiring or disposing of assets the aggregate consideration or fair value or which exceeds 20% of our net equity value on the date of the transaction, or determining the annual compensation of any of our officers and directors (excluding our founding shareholder).

The Shareholder’s Agreement will also provide our founding shareholder with access to our books and records and financial and operating data with respect to our business, and affords our founding shareholder certain consultation rights with our senior management with respect to our business and financial results, so long as our founding shareholder and his affiliates beneficially own shares accounting for at least 5% of the voting power of our issued share capital.

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Executive Compensation

Directors and Key Management Compensation

We currently do not set aside any amounts related to pension, retirement or other similar benefits. The aggregate compensation of our directors and other key management personnel for the years ended December 31, 2020, 2019 and 2018 were R$45.0 million, R$19.7 million and R$0.0 million, respectively.

However, certain executive officers and members of our board of directors hold executive positions in companies controlled by us, and are directly compensated by such companies, according to the activities they perform.

Compensation Objectives

Our executive compensation program is designed to achieve the following objectives:

Attract and retain the most talented and dedicated executive officers whose knowledge, and skillset are critical to the successful execution of our business strategy;

Ensure our executive officers are compensated in a manner consistent with market competitive practices of other fast-growing companies of a similar size and stage of development;

Reward our executive officers for their performance and motivate them to achieve our long-term strategic goals in a manner that is aligned with the interests of our shareholders; and

Reinforce our leadership principles and cultural values, which promote empowering and having our customers come first, pursuing the highest performance, taking responsibility for our commitments and growing efficiently.

Compensation Composition

The total compensation package for our executive officers consists of a mix of fixed compensation and share-based compensation. We believe such a structure is well-placed for maximizing shareholder value while, at the same time, attracting, motivating and retaining high-quality executive officers.

Fixed Compensation. Our executive officers receive a fixed base salary, which is paid based on the services provided, as set forth in their respective employment contract.

Share-Based Compensation. We maintain a long-term incentive plan, which provides for awards of stock options and restricted share units, or “RSUs.” We believe it is important for the majority of our executive officers’ compensation to be delivered in the form of share-based compensation, creating greater alignment of the interests of key employees with those of shareholders and allowing us and our subsidiaries to attract and retain key employees. These share-based payments are classified as share-based payment transactions.

Salaries and benefits provided are established in accordance with our compensation strategy. This fixed portion of compensation seeks to recognize the value of each of the executive officer positions and contribute to the retention of our management team, which provides greater stability and quality in our activities.

In addition, we believe that our share-based compensation drives further retention of key executives and ensures alignment between their interests and those of our shareholders. Share-based compensation is also defined based on market research and on the compensation strategy adopted. For more information on the ownership of our shares by our directors and officers, see “Principal and Selling Shareholders.”

In the payment of variable compensation to our executives, we consider the following: (i) individual performance; (ii) the performance of the business unit; (iii) our performance as a whole; (iv) the importance of certain performance to our long-term goals and objectives. Our management team members are evaluated based on the achievement of our goals, consisting of specific objectives and indicators, in accordance with our current strategy.

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There is currently no compensation or benefits linked to the occurrence of a particular corporate transaction.

Board of Directors

In fiscal years ending December 31, 2018 and 2019, the members of our board of directors did not receive any compensation due to the director’s service as director, either because they are representatives of investors, or because they exercise executive functions in companies controlled by us and, therefore, receive their compensation by the companies controlled by us.

Starting in fiscal year 2020, we started engaging paid independent board members who receive compensation made up of a mix of cash and share-based compensation. We did not proportion compensation for our directors in any specific ratio between cash and equity, but note that all paid directors received compensation that was primarily weighted towards equity compensation as a means of creating greater alignment to our long-term goals and the interests of our shareholders.

For fiscal year ending December 31, 2020, the proportion of each element in the total compensation was as follows:

Board of Directors (1)	2020
Fixed compensation		6	%
Share-based compensation		94	%
Total		100	%

(1)

This disclosure only relates to one of our directors.

The maximum, minimum and average compensation of members of our board of directors and our executive officers for 2020, 2019 and 2018 are presented below:

	Executive Officers						Board of Directors
	For the year ended December 31,						For the year ended December 31,
	2020		2019		2018		2020		2019		2018
		(in R$ million)						(in R$ million)
Maximum		43.0		19.7		—		2.0		—		—
Minimum		43.0		19.7		—		2.0		—		—
Average		43.0		19.7		—		2.0		—		—

In connection with this offering, we intend to adopt a director compensation policy, which will govern compensation paid to our existing non-employee directors and to any newly appointed directors as of the closing of this offering, as follows:

A fixed board membership annual equity retainer; and

Each non-employee director that serves as either the chairperson or a member of one of our board committees is expected to receive an additional amount in connection with such committee participation or chair position.

Employee Benefit and Share Plans

Bonus or Profit-Sharing Plan

We currently do not provide benefits under any bonus or profit-sharing plan.

Nu Holdings Ltd. 2020 Omnibus Incentive Plan and Nu Holdings Ltd. Share Option Plan

Our board of directors, at a meeting held on January 30, 2020, approved the Nu Holdings Ltd. 2020 Omnibus Incentive Plan, or the “Omnibus Incentive Plan,” as amended on January 27, 2021, which establishes the general rules and conditions for granting stock options and restricted share units, or “RSUs.”

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Purpose. The Omnibus Incentive Plan aims to increase our capacity to attract and retain employees, consultants and management, and to motivate such individuals to serve us and to expend maximum effort to improve our commercial results and earnings by providing these individuals with an opportunity to acquire and increase their equity interest in us.

Eligibility. Any of our or any of our affiliates’ employees, officers, non-employee directors or consultants is eligible to receive awards under the Omnibus Incentive Plan.

Administration. Without limitation, our board of directors will have full and final authority, subject to the other terms and conditions of the Omnibus Incentive Plan, to (1) designate participants, (2) determine the type or types of awards to be made to a participant, (3) determine the number of shares to be subject to an award, (4) establish the terms and conditions of each award (including the option price, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer or forfeiture of an award, (5) prescribe the form of each award agreement and (6) amend, modify or supplement the terms and conditions of any outstanding award, including the authority to effectuate the purposes of the Omnibus Incentive Plan, to modify awards to foreign nationals or individuals who are employed outside of Brazil or the United States or to recognize differences in local law, tax policy or custom. Our board of directors delegated to our chief executive officer all of their authority under the Omnibus Incentive Plan, including, without limitation, their authority to make awards under such plan. The shares issuable pursuant to such awards may not exceed one percent (1%) of our then outstanding fully diluted capital shares per grantee, subject to the maximum number of shares issuable under our Omnibus Incentive Plan.

Authorized Shares. The total number of shares available for issuance under our equity incentive plans (including the Omnibus Incentive Plan and the SOP, as defined below) is . As of the date of this prospectus, were available for issuance, and there were options and RSUs granted and outstanding, vested and unvested, under the Omnibus Incentive Plan and the SOP. Prior to this offering, we intend to increase the share pool under the Omnibus Incentive Plan by approximately 5% of the total number of outstanding shares (including both ordinary shares and preferred shares).

Awards: The Omnibus Incentive Plan provides for the grant of options and RSUs.

Options:

Price — The exercise price of each option is set by the board of directors (or our chief executive officer as applicable) and stated in each award agreement. The exercise price of each option (except with respect to substitute awards) will be at least the fair market value of the shares on the grant date, or any price established by shareholders, which in no case can be less than the par value of a share.

Term — The options expire after a maximum period of ten (10) years from the grant date, or on the date on which the board of directors establishes in the respective award agreement.

Vesting — Each option will become exercisable as the board of directors (or our chief executive officer as applicable) determines and as set forth in the applicable award agreement.

Exercise Method — The options are exercised by their holders through delivery of an exercise notice to us establishing the number of options with respect to which the option is being exercised, accompanied by full payment of the option price.

Rights of Holders of the Options — Except as otherwise stated in an award agreement, option holders will not have any shareholder rights (e.g., the right to receive cash payments, dividends or distributions attributable to the shares underlying the option or voting rights to shares underlying the option) until the options have been exercised and the respective shares delivered.

RSUs:

Restrictions — At the time of grant, our board of directors (or our chief executive officer as applicable) may establish a period of restriction or any other additional restrictions, including the satisfaction of performance goals applicable to RSUs. RSUs cannot and may not be sold, transferred, assigned, pledged or

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otherwise encumbered or disposed of during the restricted period or before the satisfaction of any other applicable restrictions.

Settlement of RSUs — The RSUs may be settled in cash or shares, as determined and specified in the award agreement.

Voting Rights and Dividends — Unless otherwise specified in the award agreement, the holders of RSUs do not have rights as shareholders, including any voting rights or rights to dividends or dividend equivalents, until the RSUs have been settled and the respective shares delivered.

Creditor’s Rights — Holders of RSUs will have no other rights beyond those of a general creditor of ours or our affiliates.

Delivery of Shares — Shares will be delivered to holders of RSUs after the end of the restricted period and after any other terms and conditions set forth in the award agreement have been satisfied.

Termination of Service. In the event of a termination of service, any RSUs that are not vested are automatically cancelled, without payment of consideration and any unvested options will be automatically forfeited.

Change in Control. In the event of a change in control, the awards shall be treated in accordance with the transaction agreement and, if not specified, the board of directors has the discretion to continue, assume, substitute, cancel, suspend exercise (in order to allow the transaction to close) or accelerate, in whole or in part, the awards.

Term. The Omnibus Incentive Plan shall be in full force and effect for a period of ten (10) years and shall automatically terminate thereafter.

Adjustments. If (1) the number of outstanding shares is increased or decreased or the shares are changed into or exchanged for a different number or kind of our shares or other securities on account of any recapitalization, reclassification, share split, reverse split, combination of shares, exchange of shares, share dividend or other distribution payable in ordinary shares or other increase or decrease in such shares effected without receipt of consideration by us or (2) there occurs any spin-off, split-up, extraordinary cash dividend or other distribution of assets by us, (i) the number and kinds of shares for which grants of awards may be made, (ii) the number and kinds of shares for which outstanding awards may be exercised or settled and (iii) the performance goals relating to outstanding awards will be equitably adjusted by us; provided that any such adjustment will comply with Section 409A of the Internal Revenue Code. In addition, in the event of any such increase or decrease in the number of outstanding shares or other transaction described in clause (2) above, the number and kind of shares for which awards are outstanding and the option price per share of outstanding options will be equitably adjusted.

Company Rights. Shares acquired through the exercise of options are subject to a right of first refusal for our benefit, repurchase rights for our benefit, a tag-along right, and a drag-along right.

Amendment; Termination. The board of directors may, at any time and from time to time, amend, suspend or terminate the Omnibus Incentive Plan as to any awards that have not been made. An amendment to the Omnibus Incentive Plan will be contingent on shareholder approval to the extent stated by the board of directors, required by applicable law or required by applicable securities exchange listing requirements. No amendment, suspension or termination of the Omnibus Incentive Plan may materially impair the rights or obligations of a participant without the participant’s consent. The repricing of awards is expressly prohibited without shareholder approval.

Nu Holdings Ltd. Share Option Plan

The Nu Holdings Ltd. Share Option Plan, or the “SOP,” was originally adopted by our board of directors and shareholders in October 2016 and was most recently amended on January 27, 2021.

Purpose. The purpose of the SOP is to encourage the our key executives, professionals and other persons or legal entities performing bona fide services for us or any of our direct or indirect subsidiaries to invest in us, to promote their commitment to our results and the expansion of its business in the long term, by providing such individuals with the opportunity to acquire our shares.

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Administration. The SOP is administered by our board of directors, provided that our chief executive officer has authority to manage grants constituting one percent (1%) or less of our then outstanding share capital. Our board of directors (or our chief executive officer, as applicable) will have full authority to take all necessary and adequate measures for the administration of the SOP.

Authorized Shares. There are shares authorized for issuance under our equity incentive plans (including the Omnibus Incentive Plan and the SOP). While there are awards outstanding under the SOP, we do not intend to make future awards under the SOP. Any outstanding awards under the SOP that expire or are cancelled shall again be available for issuance under the Omnibus Incentive Plan.

Eligibility: Our key executives, professionals and other persons or legal entities performing bona fide services for us or any of our direct or indirect subsidiaries are eligible to receive awards under the 2016 Plan.

Awards. The SOP provides for the grant of options.

Options. Options allow the participant to subscribe for a certain number of our shares. Unless otherwise set forth in an award agreement, the options will have a vesting period of five (5) years with (i) 20% of the award vesting after the first anniversary of the grant date and (ii) the remaining 80% vesting in equal monthly installments over forty-eight (48) months. In certain cases, the vesting period shall be four (4) years with (i) 25% of the award vesting after the first anniversary of the grant date and (ii) the remaining 75% vesting in equal monthly installments over thirty-six (36) months. Options may be exercised within ten (10) years after grant. The price per share shall be the price determined by the board of directors.

Lock-Up. In connection with any underwritten public offering of our shares, a participant may not directly or indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any awards for a maximum of 180 days following the offering without consent of the underwriter. This restriction shall terminate two years after our initial public offering.

Termination of Employment. If the participant is terminated, such participant has 180 days to exercise his or her options. If the participant is terminated due to death or disability, he or she has six (6) months and twelve (12) months to exercise the participant’s options, respectively.

Amendment. Any amendment to the SOP is subject to the approval of our board of directors, who may amend the SOP Plan at any time and for any reason.

Term. The SOP shall be in force and effect for a period of twenty (20) years.

Company Rights. The options will be subject to a right of first refusal for our benefit, a tag-along right, and a drag-along right.

Nu Holdings Ltd. 2021 ESPP

In connection with this offering, we intend to adopt the Nu Holdings Ltd. 2021 Employee Stock Purchase Plan, or the “2021 ESPP.” The aggregate number of our shares of that will initially be reserved for issuance under our 2021 ESPP will be equal to % of the number of shares outstanding on the effective date of this offering.

Contingent Share Awards

On July 5, 2021, our board of directors approved the issuance to Rua California Ltd., an entity holding more than 10% of our share capital and that is controlled by our founding shareholder and chief executive officer David Vélez Osorno, under the previously-granted contingent share awards, or the “Contingent Share Awards,” which provided for the following: (i) a number of Class A Ordinary Shares equal to 0.5% of the total number of Ordinary Shares in issue (on an as-converted, fully diluted basis) immediately following (x) a primary issuance, secondary sale or liquidation event in which the aggregate value of the consideration to be paid is at least US$100,000,000 and at least one participant is neither us nor an affiliate of Rua California Ltd. or David Vélez Osorno, or the “Award

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Applicable Transaction,” and (y) the issuance of such shares, upon the closing of such Award Applicable Transaction, so long as such Award Applicable Transaction involves a pre-money valuation of us of equal to or greater than US$20,000,000,000 but less than US$30,000,000,000, or the “Award First Milestone,” and (ii) a number of Class A Ordinary Shares such that the total number of Class A Ordinary Shares issued pursuant to clauses (i) and (ii) would equal 1% of the total number of Ordinary Shares in issue (on an as-converted, fully diluted basis) immediately following (x) the closing of an Award Applicable Transaction and (y) the issuance of such shares, upon the closing of such Award Applicable Transaction, so long as such Award Applicable Transaction involved a pre-money valuation of us of equal to or greater than US$30,000,000,000, or the “Award Second Milestone.” The Award First Milestone was achieved upon the closing of our Series G preferred financing round, and the Award Second Milestone was achieved upon the closing of our Series G-1 preferred financing round. Accordingly, we issued Class A ordinary shares on July 5, 2021, as a result of the achievement of the Award First Milestone and the Award Second Milestone under the Contingent Share Awards.

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Certain Relationships and Related Party Transactions

Equity Financings

Series G-1 Convertible Preferred Share Financing

On June 11, 2021, we sold an aggregate of 10,002,809 Series G-1 preferred shares (without giving effect to the Share Split) at a purchase price of US$ 39.988768 per share, for an aggregate purchase price of US$400,000,008.54. The following table summarizes purchases of our Series G-1 preferred shares by related persons:

Shareholder	Shares of Series G-1 Preferred Shares(6)		Total Purchase Price
Sands Point Consulting LLC(1)		6,669	US$	266,645.11
Luis Alberto Moreno Mejía(2)		6,668	US$	266,645.11
Post House Capital LLC(3)		33,343	US$	1,333,345.50
Alejandro Moreno Mejía(4)		6,668	US$	266,645.11
Oscar Rodriguez Herrero(5)		6,669	US$	266,645.11

(1)

Sands Point Consulting, LLC is controlled by Anita Sands, a member of our board of directors.

(2)

Luis Alberto Moreno Mejía is a member of our board of directors.

(3)

Post House Capital LLC is controlled by Jacqueline Dawn Reses, a member of our board of directors.

(4)

Alejandro Moreno Mejía is a family member of Luis Alberto Moreno Mejía, a member of our board of directors.

(5)

Oscar Rodriguez Herrero is an observer of our Audit and Risk Committee.

(6)

Does not reflect the Share Split.

Series G Convertible Preferred Share Financing

On January 27, 2021, we sold an aggregate of 11,758,704 Series G preferred shares at a purchase price of US$39.988768 per share, for an aggregate purchase price of US$399,999,973. Our 1,022,496 Series G-1 preferred shares were purchased by SCGE Fund, LP for the total purchase price of US$34,782,606.35. The number of shares in this paragraph does not reflect the Share Split.

Series F Preferred Share Financing

On July 17, 2019, we sold an aggregate of 1,074,934 shares of our Series F preferred shares (without giving effect to the Share Split) at a purchase price of US$372.1169 per share, for an aggregate purchase price of US$400,001,107.79. The following table summarizes purchases of our Series F preferred shares by related persons:

Shareholder	Shares of Series F Preferred Shares(1)		Total Purchase Price
SC USV XIV DE Investments, L.L.C.		2,686	US$	999,505.99
SC USG VI DE Investments, LLC		8,062	US$	3,000,006.45
DST-NB Investments VI Limited		80,620	US$	30,000,064.48

(1)

Does not reflect the Share Split.

Series E Preferred Share Financing

On February 15, 2018, we sold an aggregate of 1,724,695 shares of our Series E preferred shares (without giving effect to the Share Split) at a purchase price of US$87.5897 per share, for an aggregate purchase price of US$151,065,517.64. The following table summarizes purchases of our Series E preferred shares by related persons:

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Shareholder	Shares of Series E Preferred Shares(1)		Total Purchase Price
DST-NB Investments Limited		519,177	US$	45,474,557.68
DST-NB Investments XVIII, L.P.		215,909	US$	18,911,404.54
DST Co-Invest-NB Investment Limited		111,056	US$	9,727,361.72

(1)

Does not reflect the Share Split.

Investors’ Rights Agreement

We are party to an eighth amended and restated investors’ rights agreement, dated as of June 11, 2021, or the “IRA,” which provides, among other things, that certain holders of our share capital have the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. In connection with this offering, we intend to amend and restated the IRA, which, as amended, we refer to as our Registration Rights Agreement, or the “RRA.” The RRA will include substantially identical rights with respect to registration as are currently contained in the IRA. We and the holders of our management shares, preferred shares and ordinary shares who are parties to our IRA will be parties to the RRA. See “Description of Share Capital—Registration Rights” for additional information regarding these registration rights.

Right of First Refusal

Pursuant to certain of our equity compensation plans and an eight amended and restated shareholders agreement, dated as of June 11, 2021, we and certain holders of our share capital have a right of first refusal to purchase our shares which certain shareholders propose to sell to other parties. This right will terminate upon completion of this offering.

Contingent Share Awards

See “Executive Compensation—Contingent Share Awards” for more information.

Limitation of Liability and Indemnification of Officers and Directors

Our Memorandum and Articles of Association, which will become effective immediately prior to the completion of this offering, contains provisions that limit the liability of our directors, agents and officers for monetary damages for any liability incurred by them as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur (i) arising from their own fraud, willful default or dishonesty, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which such person derived any improper benefit.

Any repeal or modification of the foregoing provisions of our Memorandum and Articles of Association by our shareholders shall not adversely affect any right or protection of any of our directors, agents or officers existing at the time of, or increase the liability of any such director, agent or officer with respect to any acts or omissions of such director, agent or officer occurring prior to, such repeal or modification.

In addition, our Memorandum and Articles of Association, which will become effective immediately prior to the completion of this offering, contains provisions that indemnify each of our directors, agents or officers out of our assets against any liability incurred by them as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur (i) arising from their own fraud, willful default or dishonesty, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which such person derived any improper benefit.

Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.

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The limitation of liability and indemnification provisions that are expected to be included in our Memorandum and Articles of Association and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage shareholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other shareholders. Further, a shareholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

In connection with this offering, we intend to obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.

Certain of our non-employee directors may, through their relationships with their employers, be insured or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement will provide for indemnification by the international underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Related Party Transactions Policy

Prior to the completion of this offering, we intend to enter into a new related party transaction policy. We expect that this related party transaction policy will require certain related party transactions to be approved by our board of directors or a designated committee thereof, which may include our audit and risk committee, once implemented.

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Principal and Selling Shareholders

The following table and accompanying footnotes present information relating to the beneficial ownership of our Class A ordinary shares, including in the form of BDRs, and Class B ordinary shares (1) immediately prior to the completion of this offering (after giving effect to the Share Capital Conversion); (2) following the sale of Class A ordinary shares in this offering, including in the form of BDRs, assuming no exercise of the underwriters’ option to purchase additional ordinary shares or BDRs; and (3) following the sale of Class A ordinary shares in this offering, including in the form of BDRs, assuming the underwriters’ option to purchase additional ordinary shares or BDRs is exercised in full, by:

each person, or group of affiliated persons, known by us to own beneficially 5% or more of each class of our outstanding voting shares;

each of our directors and executive officers, individually;

all directors and executive officers as a group; and

the selling shareholders, which consist of the entities shown as having shares listed in the column “Shares to be Sold in the Offering.”

The number of ordinary shares beneficially owned by each entity, person, executive officer or director is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days through the exercise of any option, warrant or other right. Except as otherwise indicated, and subject to applicable community property laws, we believe that each shareholder identified in the table below possesses sole voting and investment power over all the Class A ordinary shares or Class B ordinary shares shown as beneficially owned by the shareholder in the table.

The percentages of beneficial ownership in the table below are calculated on the basis of the following numbers of shares outstanding and the number of Class A ordinary shares includes Class A ordinary shares in the form of BDRs:

Immediately prior to the completion of this offering: Class A ordinary shares and Class B ordinary shares;

following the sale of Class A ordinary shares in this offering, including in the form of BDRs, assuming no exercise of the underwriters’ option to purchase additional ordinary shares (the Class B ordinary shares sold in this offering by the selling shareholders would convert from Class B ordinary shares into Class A ordinary shares upon such sale): Class A ordinary shares and Class B ordinary shares; and

following the sale of Class A ordinary shares in this offering, including in the form of BDRs, assuming exercise in full of the underwriters’ option to purchase additional Class A ordinary shares (the Class B ordinary shares sold in this offering by the selling shareholders would convert from Class B ordinary shares into Class A ordinary shares upon such sale): Class A ordinary shares and Class B ordinary shares.

At the closing of this offering, all of the Class B ordinary shares to be sold by the selling shareholders will be converted from Class B ordinary shares into Class A ordinary shares. The table below does not reflect any purchases of our Class A ordinary shares in this offering, including in the form of BDRs, by the shareholders set forth below.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Nu Holdings Ltd., Floor 4, Willow House, Cricket Square, Grand Cayman, KY1-9010, Cayman Islands.

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Shares Beneficially Owned Prior to
Offering

% of
Total
Voting
Power
Before
Offering(1)

Ordinary Shares To Be Sold In Offering

Shares Beneficially Owned After
Offering Without Exercise of
Underwriters’ Option

% of Total
Voting Power
After Offering
Without
Exercise of
Underwriters’
Option(1)

Additional Ordinary Shares To Be Sold In Offering With Full Exercise of Underwriters’ Option

Shares Beneficially Owned After
Offering With Full Exercise of
Underwriters’ Option

% of Total
Voting Power
After Offering
With Full
Exercise of
Underwriters’
Option(1)

Shareholders

Class A

Class B

Class A

Class B

Class A

Class B

Shares

Named Executive Officers and Directors:

David Vélez Osorno(1)

Doug Leone

Anita Sands

Daniel Krepel Goldberg

Luis Alberto Moreno Mejía

Jacqueline Dawn Reses

Larissa de Macedo Machado (Anitta)

Rogério Paulo Calderón Peres

Cristina Helena Zingaretti Junqueira

Guilherme Marques do Lago

Youssef Lahrech

Jagpreet Singh Duggal

Henrique Camossa Saldanha Fragelli

Renee Grace Mauldin Atwood

Matt Swann

Vitor Guarino Olivier

5% Shareholders:

Rua California Ltd.(2)

Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our ordinary shares.

(1)

Percentage of total voting power represents voting power with respect to all of our Class A ordinary shares and Class B ordinary shares, as a single class. Holders of our Class B ordinary shares are entitled to 20 votes per share, whereas holders of our Class A ordinary shares are entitled to one vote per share. For more information about the voting rights of our Class A ordinary shares and Class B ordinary shares, see “Description of Share Capital.”

(2)

Consists of shares held of record by Rua California Ltd. David Vélez Osorno may be deemed to have voting and dispositive power over the shares held by Rua California Ltd.

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The holders of our Class A ordinary shares and Class B ordinary shares have identical rights, except that (1) holders of Class B ordinary shares are entitled to 20 votes per share, whereas holders of our Class A ordinary shares are entitled to one vote per share; (2) holders of Class B ordinary shares have certain conversion rights; (3) holders of Class B ordinary shares are entitled to preemptive rights in the event that there is an increase in our share capital or additional ordinary shares are issued in order to maintain their proportional ownership; and (4) holders of Class B ordinary shares have certain consent rights. For more information see “Description of Share Capital.”

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Description of Share Capital

General

The following description summarizes certain important terms of our share capital, as they are expected to be in effect immediately prior to the completion of this offering. We expect to adopt our Memorandum and Articles of Association that will become effective immediately prior to the completion of this offering, and this description summarizes the provisions that are expected to be included in such documents. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters set forth in this section titled “Description of Share Capital,” you should refer to our Memorandum and Articles of Association, the Shareholder’s Agreement and amended and restated investors’ rights agreement, which are included as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of Cayman Islands law.

The following is a summary of the material provisions of our authorized share capital and our Memorandum and Articles of Association.

Share Capital

Our Memorandum and Articles of Association authorize two classes of ordinary shares: Class A ordinary shares, which are entitled to one vote per share and Class B ordinary shares, which are entitled to 20 votes per share and to maintain a proportional ownership interest in the event that additional Class A ordinary shares are issued. Any holder of Class B ordinary shares may convert his or her shares at any time into Class A ordinary shares on a share-for-share basis. The rights of the two classes of ordinary shares are otherwise identical, except as described below. See “—Anti-Takeover Provisions in our Memorandum and Articles of Association—Two Classes of Ordinary Shares.”

Immediately following the completion of this offering, our authorized share capital will be US$ , consisting of shares of par value US$ each, of which:

shares are designated as Class A ordinary shares; and

shares are designated as Class B ordinary shares.

The remaining authorized but unissued shares are presently undesignated and may be issued by our board of directors as ordinary shares of any class or as shares with preferred, deferred or other special rights or restrictions.

Treasury Stock

At the date of this prospectus, we have no shares in treasury.

Issuance of Shares

Except as expressly provided in our Memorandum and Articles of Association, our board of directors has general and unconditional authority to allot, grant options over, offer or otherwise deal with or dispose of any unissued shares in the company’s capital without the approval of our shareholders (whether forming part of the original or any increased share capital), either at a premium or at par, with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, on such terms and conditions, and at such times as the directors may decide, but so that no share shall be issued at a discount, except in accordance with the provisions of the Companies Act.

Our Memorandum and Articles of Association provides that at any time that there are Class A ordinary shares in issue, additional Class B ordinary shares may only be issued pursuant to (1) a share split, subdivision of shares or similar transaction or where a dividend or other distribution is paid by the issue of shares or rights to acquire shares or following capitalization of profits; (2) a merger, consolidation, or other business combination involving the issuance of Class B ordinary shares as full or partial consideration; or (3) an issuance of Class A ordinary shares, whereby holders of the Class B ordinary shares are entitled to purchase a number of Class B ordinary shares that would allow them to maintain their proportional ownership in the company (following an offer by us to each holder

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of Class B ordinary shares to issue to such holder, upon the same economic terms, such number of Class B ordinary shares as would allow such holder to maintain its proportional ownership in the company pursuant to our Memorandum and Articles of Association). In light of: (a) the above provisions; and (b) the 20-to-1 voting ratio between our Class B ordinary shares and Class A ordinary shares, holders of our Class B ordinary shares will in many situations continue to maintain control of all matters requiring shareholder approval. This concentration of ownership and voting power will limit or preclude your ability to influence corporate matters for the foreseeable future. For more information see “—Ordinary Shares—Preemptive or Similar Rights.”

Ordinary Shares

Dividend Rights

Subject to preferences that may apply to any preferred shares outstanding at the time, the holders of our ordinary shares are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts legally available therefor that our board of directors may determine. See “Dividend and Dividend Policy” for additional information.

Voting Rights

The holder of a Class B ordinary share is entitled, in respect of such share, to 20 votes per share, whereas the holder of a Class A ordinary share is entitled, in respect of such share, to one vote per share. The holders of Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders, except as provided below and as otherwise required by law.

Our Memorandum and Articles of Association provide as follows regarding the respective rights of holders of Class A ordinary shares and Class B ordinary shares:

(1)

class consents from the holders of Class A ordinary shares and Class B ordinary shares, as applicable, shall be required for any variation to the rights attached to their respective class of shares, however, the directors may treat the two classes of shares as forming one class if they consider that both such classes would be affected in the same way by the proposal;

(2)

the rights conferred on holders of Class A ordinary shares shall not be deemed to be varied by the creation or issue of further Class B ordinary shares and vice versa; and

(3)

the rights attaching to the Class A ordinary shares and the Class B ordinary shares shall not be deemed to be varied by the creation or issue of shares with preferred or other rights, including, without limitation, shares with enhanced or weighted voting rights.

As set forth in our Memorandum and Articles of Association, the holders of Class A ordinary shares and Class B ordinary shares, respectively, do not have the right to vote separately if the number of authorized shares of such class is increased or decreased. Rather, the number of authorized Class A ordinary shares and Class B ordinary shares may be increased or decreased (but not below the number of shares of such class then outstanding) by both classes voting together by way of an “ordinary resolution,” which is defined in the our Memorandum and Articles of Association as being a resolution (1) of a duly constituted general meeting passed by a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote present in person or by proxy and voting at the meeting; or (2) approved in writing by all of the shareholders entitled to vote at a general meeting in one or more instruments each signed by one or more of the shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed.

We have not provided for cumulative voting for the election of directors in our Memorandum and Articles of Association.

Conversion Rights

Each outstanding Class B ordinary share is convertible at any time at the option of the holder into one Class A ordinary share. In addition, each Class B ordinary share will convert automatically into one Class A ordinary share upon any transfer, whether or not for value, except for certain transfers described in our Memorandum and Articles

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of Association, including transfers to affiliates of a holder, one or more trustees of a trust established for the benefit of a holder or their affiliates, partnerships, corporations and other entities owned or controlled by a holder or their affiliates, and an organization that is exempt from taxation under Section 501(3)(c) of the Code or to an organization that is exempt from taxation in Brazil under Sections 184, 377 or 378 of the 2018 Internal Tax Regulations and that is controlled, directly or indirectly through one or more intermediaries, by a holder. Furthermore, each Class B ordinary share will convert automatically into one Class A ordinary share and no Class B ordinary shares will be issued thereafter if, on the record date for any shareholders meeting, the aggregate voting power of Class B ordinary shares then outstanding is less than 10% of the aggregate voting power of Class A ordinary shares and Class B ordinary shares outstanding.

Preemptive or Similar Rights

Our Class A ordinary shares are not entitled to preemptive rights, and are not subject to conversion, redemption or sinking fund provisions.

The Class B ordinary shares are entitled to maintain a proportional ownership interest in the event that additional Class A ordinary shares are issued. As such, except for certain exceptions, including the issuance of Class A ordinary shares in furtherance of this offering, if we issue Class A ordinary shares, we must first make an offer to each holder of Class B ordinary shares to issue to such holder on the same economic terms such number of Class B ordinary shares as would allow such holder to maintain its proportional ownership in the company. This right to maintain a proportional ownership may be waived by the holders of a majority of the Class B ordinary shares.

Right to Receive Liquidation Distributions

If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our shareholders would be distributable ratably among the holders of our ordinary shares and any participating preferred shares outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred shares.

Preferred Shares

After the completion of this offering, no preferred shares will be outstanding. Pursuant to our Memorandum and Articles of Association that will become effective immediately prior to the completion of this offering, our board of directors will have the authority, subject to limitations prescribed by Cayman Islands law, to issue preferred shares in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by our shareholders. Our board of directors can also increase or decrease the number of shares of any series of preferred shares, but not below the number of shares of that series then outstanding, without any further vote or action by our shareholders. Our board of directors may authorize the issuance of preferred shares with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our Class A ordinary shares. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of our Class A ordinary shares and the voting and other rights of the holders of our Class A ordinary shares. We have no current plan to issue any preferred shares.

Equal Status

Except as expressly provided in our Memorandum and Articles of Association, Class A ordinary shares and Class B ordinary shares have the same rights and privileges and rank equally, share proportionally and are identical in all respects as to all matters. In the event of any statutory amalgamation, merger, consolidation, arrangement or other reorganization involving us and requiring the approval of our shareholders entitled to vote thereon, as well as a short-form merger or consolidation that does not require a resolution of our shareholders, the holders of Class A ordinary shares shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders of Class B ordinary shares, and the holders of Class A ordinary shares shall have the right to receive, or the right to elect to receive, at least the same amount of consideration on a per share basis as the holders of Class B ordinary shares, in each case solely with respect to economic rights. In the event of any (1) tender or exchange offer

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to acquire any Class A ordinary shares or Class B ordinary shares by any third-party pursuant to an agreement to which we are a party, or (2) any tender or exchange offer by us to acquire any Class A ordinary shares or Class B ordinary shares, the holders of Class A ordinary shares shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders of Class B ordinary shares, and the holders of Class A ordinary shares shall have the right to receive, or the right to elect to receive, at least the same amount of consideration on a per share basis as the holders of Class B ordinary shares, in each case solely with respect to economic rights.

Options

As of March 31, 2021, we had outstanding options to purchase an aggregate of shares of our Class A ordinary shares, with a weighted-average exercise price of approximately US$ per share, under our equity compensation plans. As of March 31, 2021, we also had shares contingent shares issuable as described in “Capitalization” and “Executive Compensation—Contingent Share Awards.”

RSUs

As of March 31, 2021, we had outstanding shares of our Class A ordinary shares subject to RSUs under our 2020 Plan. Our outstanding RSUs will generally vest upon the satisfaction of a time-based condition. For the majority of our outstanding RSUs under our 2020 Plan, the time-based condition will be satisfied upon completion of 3 years from the vesting commencement date, and the balance will vest in 12 successive equal quarterly installments, subject to continued service through each such vesting date. Grants issued to new employees have a cliff period of 1 year, which requires them to stay at least for one year if they want to exercise any options.

Registration Rights

After the completion of this offering, certain holders of our Class A ordinary shares will be entitled to rights with respect to the registration of their shares under the Securities Act. These registration rights will be contained in our RRA. We and the holders of our management shares, preferred shares and ordinary shares who are parties to our IRA will be parties to the RRA. The registration rights set forth in the RRA will expire on the earlier of (i) five years following the completion of this offering, or, with respect to any particular shareholder, (ii) when such shareholder holds 1% or less of our outstanding ordinary shares and is able to sell all of its registrable securities pursuant to Rule 144 of the Securities Act during any 90-day period and (iii) immediately prior to a liquidation event. We will pay the registration expenses (other than underwriting discounts and commissions) of the holders of the shares registered pursuant to the registrations described below. See “Class A Ordinary Shares Eligible for Future Sale—Lock-Up and Market Standoff Agreements” for additional information regarding such restrictions.

Demand Registration Rights

After the completion of this offering, the holders of up to shares of our Class A ordinary shares will be entitled to certain demand registration rights. At any time beginning six months after the effective date of this offering, the holders of at least a majority of these shares then outstanding can request that we register the offer and sale of their shares. Such request for registration must cover securities, the anticipated aggregate public offering price of which is at least US$50,000,000. In an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include. We are obligated to effect only two such registrations. If we determine that it would be seriously detrimental to us and our shareholders to effect such a demand registration, we have the right to defer such registration, not more than once in any 12-month period, for a period of up to 90 days.

Piggyback Registration Rights

After the completion of this offering, if we propose to register the offer and sale of Class A ordinary shares under the Securities Act, in connection with the public offering of such Class A ordinary shares the holders of up to Class A ordinary shares will be entitled to certain “piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to (i) a registration in which the only Class A ordinary shares being registered are Class A ordinary shares issuable upon conversion of debt securities that are also being registered; (ii) a registration related to any employee benefit plan or a corporate reorganization or other transaction covered by Rule 145 promulgated under the Securities Act; or (iii) a registration

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on any registration form which does not include substantially the same information as would be required to be included in a registration statement covering the public offering of our Class A ordinary shares, the holders of these shares are entitled to notice of the registration and have the right, subject to certain limitations, to include their shares in the registration.

F-3 Registration Rights

After the completion of this offering, the holders of up to of the Class A ordinary shares will be entitled to certain Form F-3 registration rights. The holders of at least a majority of these shares then outstanding may make a written request that we register the offer and sale of their shares on a registration statement on Form F-3 if we are eligible to file a registration statement on Form F-3 so long as the request covers securities the anticipated aggregate public offering price of which, before payment of underwriting discounts and commissions, is at least US$5,000,000. These shareholders may make an unlimited number of requests for registration on Form F-3; however, we will not be required to effect a registration on Form F-3 if we have effected one such registrations within the 12-month period preceding the date of the request. Additionally, if we determine that it would be seriously detrimental to us and our shareholders to effect such a registration, we have the right to defer such registration, not more than once in any 12-month period, for a period of up to 90 days.

Record Dates

For the purpose of determining shareholders entitled to notice of, or to vote at any general meeting of shareholders or any adjournment thereof, or shareholders entitled to receive dividend or other distribution payments, or in order to make a determination of shareholders for any other purpose, our board of directors may set a record date which shall not exceed forty (40) clear days prior to the date where the determination will be made.

General Meetings of Shareholders

As a condition of admission to a shareholders’ meeting, a shareholder must be duly registered as a shareholder of Nu at the applicable record date for that meeting and, in order to vote, all calls or installments then payable by such shareholder to us in respect of the shares that such shareholder holds must have been paid.

Subject to any special rights or restrictions as to voting then attached to any shares, at any general meeting every shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative not being himself or herself a shareholder entitled to vote) shall have one vote per Class A ordinary share and 20 votes per Class B ordinary share.

As a Cayman Islands exempted company, we are not obliged by the Companies Act to call annual general meetings; however, our Memorandum and Articles of Association provide that in each year the company will hold an annual general meeting of shareholders, within the first four months following the end of its fiscal year, provided that our board of directors has the discretion whether or not to hold an annual general meeting in 2021. For the annual general meeting of shareholders the agenda will include, among other things, the presentation of the annual accounts and the report of the directors (if any). In addition, the agenda for an annual general meeting of shareholders will only include such items as have been included therein by the board of directors.

Also, we may, but are not required to (unless required by the laws of the Cayman Islands), hold other extraordinary general meetings during the year. General meetings of shareholders may be held where the directors so decide.

The Companies Act provides shareholders a limited right to request a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting in default of a company’s memorandum and articles of association. However, these rights may be provided in a company’s memorandum and articles of association. Our Memorandum and Articles of Association provide that for so long as our founding shareholder controls a majority of the voting power of the shares of the Company, a general meeting of shareholders may be convened on the requisition of the holders of a majority of the voting power of our shares. However, if our founding shareholder controls less than a majority of the voting power of our shares, no shareholder shall have the power to requisition a meeting of shareholders. Our Memorandum and Articles of Association provide no other right to put any proposals before annual general meetings or extraordinary general meetings.

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Subject to regulatory requirements, the annual general meeting and any extraordinary general meetings must be called by not less than eight (8) days’ notice prior to the relevant shareholders meeting and convened by a notice discussed below. Alternatively, upon the prior consent of all holders entitled to receive notice, with regards to the annual general meeting, and the holders of 95% in par value of the shares entitled to attend and vote at an extraordinary general meeting, that meeting may be convened by a shorter notice and in a manner deemed appropriate by those holders.

We will give notice of each general meeting of shareholders by publication on its website and in any other manner that it may be required to follow in order to comply with Cayman Islands law, Nasdaq/NYSE and SEC requirements. The holders of registered shares may be given notice of a shareholders’ meeting by means of letters sent to the addresses of those shareholders as registered in our shareholders’ register, or, subject to certain statutory requirements, by electronic means.

Holders whose shares are registered in the name of DTC or its nominee, which we expect will be the case for all holders of Class A ordinary shares, will not be a shareholder or member of the company and must rely on the procedures of DTC regarding notice of shareholders’ meetings and the exercise of rights of a holder of the Class A ordinary shares.

A quorum for a general meeting consists of any one or more persons holding or representing by proxy not less than a majority of the aggregate voting power of all shares in issue and entitled to vote upon the business to be transacted. If a quorum is not present within half an hour from the time appointed for the meeting to commence or if during such a meeting a quorum ceases to be present, a second meeting may be called with at least five days’ notice to shareholders specifying the place, the day and the hour of the second meeting, as the Directors may determine, and if at the second meeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the shareholders present shall be a quorum.

A resolution put to a vote at a general meeting shall be decided on a poll. Generally speaking, an ordinary resolution to be passed by the shareholders at a general meeting requires the affirmative vote of a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote, present in person or by proxy and voting at the meeting and a special resolution requires the affirmative vote on a poll of no less than two-thirds of the votes cast by the shareholders entitled to vote who are present in person or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all of our shareholders, as permitted by the Companies Act and our Memorandum and Articles of Association.

Pursuant to our Memorandum and Articles of Association, general meetings of shareholders are to be chaired by the chairman of our board of directors or in his absence the vice-chairman of the board of directors. If the chairman or vice-chairman of our board of directors is absent, the directors present at the meeting shall appoint one of them to be chairman of the general meeting. If neither the chairman nor another director is present at the general meeting within 15 minutes after the time appointed for holding the meeting, the shareholders present in person or by proxy and entitled to vote may elect any one of the shareholders to be chairman. The order of business at each meeting shall be determined by the chairman of the meeting, and he or she shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allotted to questions or comments on our affairs, restrictions on entry to such meeting after the time prescribed for the commencement thereof, and the opening and closing of the polls.

Changes to Capital

Pursuant to our Memorandum and Articles of Association, we may from time to time by ordinary resolution:

increase our share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe;

consolidate and divide all or any of our share capital into shares of a larger amount than its existing shares;

convert all or any of our paid-up shares into stock and reconvert that stock into paid up shares of any denomination;

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subdivide our existing shares or any of them into shares of a smaller amount, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; or

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

Our shareholders may by special resolution, subject to confirmation by the Grand Court of the Cayman Islands on an application by us for an order confirming such reduction, reduce its share capital or any capital redemption reserve in any manner permitted by law.

In addition, subject to the provisions of the Companies Act and our Memorandum and Articles of Association and the Shareholder’s Agreement, we may:

issue shares on terms that they are to be redeemed or are liable to be redeemed;

purchase its own shares (including any redeemable shares); and

make a payment in respect of the redemption or purchase of its own shares in any manner authorized by the Companies Act, including out of its own capital.

Transfer of Shares

Subject to any applicable restrictions set forth in the Memorandum and Articles of Association and the Shareholder’s Agreement, any shareholder of Nu may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or in the form prescribed by the Nasdaq/NYSE or any other form approved by our board of directors.

The Class A ordinary shares sold in this offering will be traded on the Nasdaq/NYSE in book-entry form and may be transferred in accordance with our Memorandum and Articles of Association and Nasdaq’s/NYSE’s rules and regulations.

However, our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is either not fully paid up to a person of whom it does not approve or is issued under any share incentive scheme for employees which contains a transfer restriction that is still applicable to such ordinary share. The board of directors may also decline to register any transfer of any ordinary share unless:

the instrument of transfer is lodged with us, accompanied by the certificate (if any) for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

the instrument of transfer is in respect of only one class of shares;

the instrument of transfer is properly stamped, if required;

the ordinary shares transferred are free of any lien in favor of us; and

in the case of a transfer to joint holders, the transfer is not to more than four joint holders.

If the directors refuse to register a transfer they are required, within two months after the date on which the instrument of transfer was lodged, to send to the transferee notice of such refusal.

Share Repurchase

The Companies Act and our Memorandum and Articles of Association permit us to purchase our own shares, subject to certain restrictions. Our board of directors may only exercise this power on behalf of Nu, subject to the Companies Act and our Memorandum and Articles of Association, the Shareholder’s Agreement and to any

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applicable requirements imposed from time to time by the SEC, the Nasdaq/NYSE, or by any recognized stock exchange on which our shares are listed.

Dividends and Capitalization of Profits

We have not adopted a dividend policy with respect to payments of any future dividends. Subject to the Companies Act and general principles of Cayman Islands law, our shareholders may, by ordinary resolution, declare dividends (including interim dividends) to be paid to shareholders but no dividend shall be declared in excess of the amount recommended by the board of directors. The board of directors may also declare dividends. Dividends may be declared and paid out of funds lawfully available to us. Except as otherwise provided by the rights attached to shares and our Memorandum and Articles of Association, all dividends shall be paid in proportion to the number of Class A ordinary shares or Class B ordinary shares a shareholder holds at the date the dividend is declared (or such other date as may be set as a record date); but, (1) if any share is issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly; and (2) where we have shares in issue which are not fully paid up (as to par value), we may pay dividends in proportion to the amounts paid up on each share.

The holders of Class A ordinary shares and Class B ordinary shares shall be entitled to share equally in any dividends that may be declared in respect of our ordinary shares from time to time. In the event that a dividend is paid in the form of Class A ordinary shares or Class B ordinary shares, or rights to acquire Class A ordinary shares or Class B ordinary shares, (1) the holders of Class A ordinary shares shall receive Class A ordinary shares, or rights to acquire Class A ordinary shares, as the case may be and (2) the holders of Class B ordinary shares shall receive Class B ordinary shares, or rights to acquire Class B ordinary shares, as the case may be.

Appointment, Disqualification and Removal of Directors

We are managed by our board of directors. Our Memorandum and Articles of Association provide that the board of directors will be composed of such number of directors as a majority of directors in office may determine, being up to nine directors on the date of adoption of our Memorandum and Articles of Association. There are no provisions relating to retirement of directors upon reaching any age limit. Our Memorandum and Articles of Association also provide that, while our shares are admitted to trading on Nasdaq/NYSE, our board of directors must always comply with the residency and citizenship requirements of the U.S. securities laws applicable to foreign private issuers.

Our Memorandum and Articles of Association provides that directors shall be elected by an ordinary resolution of our shareholders, which requires the affirmative vote of a simple majority of the votes cast on the resolution by the shareholders entitled to vote who are present, in person or by proxy, at a quorate general meeting of the Company. Notwithstanding the foregoing, for so long as our founding shareholder owns at least 5% of the voting power of our outstanding share capital, our founding shareholder shall be entitled to nominate a certain number of designees to the board for a specific term, as set out in our Memorandum and Articles of Association. In particular, our Memorandum and Articles of Association provide that, subject to compliance with applicable law and Nasdaq/NYSE rules, for so long as our founding shareholder and his affiliates beneficially own shares comprising at least 40% of the voting power of our outstanding share capital, the founding shareholder shall be entitled to designate up to five nominees to our board of directors (or if the size of the board of directors is increased, a majority of the members of the board of directors); for so long as our founding shareholder and its affiliates beneficially own at least 25% of the voting power of our outstanding share capital, the founding shareholder shall be entitled to designate up to three nominees to our board of directors (or if the size of the board of directors is increased, one-third of the members of the board of directors); and for so long as our founding shareholder and its affiliates beneficially own at least 5% of the voting power of our outstanding share capital, our founding shareholder shall be entitled to designate one nominee to our board of directors (or if the size of the board of directors is increased, 10% of the members of the board of directors).The founding shareholder may in like manner remove such director(s) appointed by him and appoint replacement director(s).

Each director shall be appointed for a one year term, unless they resign or their office is vacated earlier, provided, however, that such term shall be extended beyond one year in the event that no successor has been appointed (in which case such term shall be extended to the date on which such successor has been appointed).

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Our Memorandum and Articles of Association provide that from and after the date on which the founding shareholder (together with his affiliates) no longer beneficially owns more than 50% of our outstanding voting power, or the classifying date, the directors shall be divided into three classes designated Class I, Class II, and Class III. Each director shall serve for a term ending on the date of the third annual general shareholders meeting following the annual general shareholders meeting at which such director was elected as subject to the provisions of our Memorandum and Articles of Association. The founding directors shall be allocated to the longest duration classes unless otherwise determined by the founding shareholder.

Grounds for Removing a Director

A director may be removed with or without cause by ordinary resolution. The notice of general meeting must contain a statement of the intention to remove the director and must be served on the director not less than ten calendar days before the meeting. The director is entitled to attend the meeting and be heard on the motion for his removal.

The office of a director will be vacated automatically if he or she (1) becomes prohibited by law from being a director; (2) becomes bankrupt or makes an arrangement or composition with his creditors; (3) dies or is in the opinion of all his co-directors, incapable by reason of mental disorder of discharging his duties as director; (4) resigns his office by notice to us; or (5) has for more than six months been absent without permission of the directors from meetings of the board of directors held during that period, and the remaining directors resolve that his or her office be vacated.

Proceedings of the Board of Directors

Our Memorandum and Articles of Association provide that our business is to be managed and conducted by the board of directors. The quorum necessary for the board meeting shall be a simple majority of the directors then in office, and business at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall not have a casting vote.

Subject to the provisions of our Memorandum and Articles of Association, the board of directors may regulate its proceedings as they determine is appropriate. Board meetings shall be held at least once every calendar quarter and shall take place at such place as the directors may determine.

Subject to the provisions of our Memorandum and Articles of Association, to any directions given by ordinary resolution of the shareholders and the listing rules of the Nasdaq/NYSE, the board of directors may from time to time at its discretion exercise all powers of Nu, including, subject to the Companies Act, the power to issue debentures, bonds and other securities of the company, whether outright or as collateral security for any debt, liability or obligation of our company or of any third party.

Inspection of Books and Records

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or corporate records. However, the board of directors may determine from time to time whether and to what extent our accounting records and books shall be open to inspection by shareholders who are not members of the board of directors. Notwithstanding the above, our Memorandum and Articles of Association provide shareholders with the right to receive annual financial statements. Such right to receive annual financial statements may be satisfied by publishing the same on the company’s website or filing such annual reports as we are required to file with the SEC.

The Class A ordinary shares offered in this offering will be held through DTC, and DTC or Cede & Co., as nominee for DTC, will be recorded in the shareholders’ register as the holder of our Class A ordinary shares.

Under Cayman Islands law, we must keep a register of shareholders that includes:

the names and addresses of the shareholders, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member;

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the date on which the name of any person was entered on the register as a member; and

the date on which any person ceased to be a member.

Under Cayman Islands law, our register of shareholders is prima facie evidence of the matters set out therein (i.e., the register of shareholders will raise a presumption of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of shareholders is deemed as a matter of Cayman Islands law to have prima facie legal title to the shares as set against his or her name in the register of shareholders. Upon the completion of this offering, the register of shareholders will be immediately updated to record and give effect to the issuance of new Class A ordinary shares in this offering. Once the register of shareholders has been updated, the shareholders recorded in the register of shareholders should be deemed to have legal title to the shares set against their name.

If the name of any person is incorrectly entered in or omitted from the register of shareholders, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a shareholder of Nu, the person or member aggrieved (or any shareholder of ours, or Nu itself) may apply to the Cayman Islands Grand Court for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

Anti-Takeover Provisions in Our Memorandum and Articles of Association

Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable. In particular, our capital structure concentrates ownership of voting rights in the hands of our founding shareholder, as our controlling shareholder. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of our company to first negotiate with the board of directors. However, these provisions could also have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of the Class A ordinary shares that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that shareholders may otherwise deem to be in their best interests.

Two Classes of Ordinary Shares

Our Class B ordinary shares are entitled to 20 votes per share, while the Class A ordinary shares are entitled to one vote per share. Since our co-founders own all of the Class B ordinary shares, our co-founders currently have the ability to elect a majority of the directors and to determine the outcome of most matters submitted for a vote of shareholders, with our founding shareholder as the controlling shareholder. This concentrated voting control could discourage others from initiating any potential merger, takeover, or other change of control transaction that other shareholders may view as beneficial.

So long as our co-founders have the ability to determine the outcome of most matters submitted to a vote of shareholders as well as the overall management and direction of Nu, third parties may be deterred in their willingness to make an unsolicited merger, takeover, or other change of control proposal, or to engage in a proxy contest for the election of directors. As a result, the fact that we have two classes of ordinary shares may have the effect of depriving you as a holder of Class A ordinary shares of an opportunity to sell your Class A ordinary shares at a premium over prevailing market prices and make it more difficult to replace our directors and management.

Preferred Shares

Our Memorandum and Articles of Association provides our board of directors with wide powers to issue additional shares, and one or more classes or series of preferred shares, with or without preferred, deferred or other rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, at such times and on such other terms as the board of directors may determine, to the extent authorized but unissued. The issuance of additional shares may be used as an anti-takeover device without further action on the part of our shareholders. Such issuance may further dilute the voting power of existing holders of Class A ordinary shares.

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Despite the anti-takeover provisions described above, under Cayman Islands law, our board of directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association, for what they believe in good faith to be in our best interests.

Requisitioning General Meetings

Our Memorandum and Articles of Association provide that, for so long as our founding shareholder controls a majority of the voting power of our shares, a general meeting of shareholders may be convened on the requisition of the holders of a majority of the voting power of our shares. However, if our founding shareholder controls less than a majority of the voting power of our shares, no shareholder shall have the power to requisition a meeting of shareholders. Accordingly, our shareholders will have limited rights to requisition and convene general meetings of shareholders.

Consent Over a Change of Control

Our Memorandum and Articles of Association that will be in effect upon the completion of this offering will provide that for so long as David Vélez Osorno and his affiliates beneficially own shares accounting for at least 10% of the voting power of our issued share capital, we will not take, or permit our subsidiaries to take, certain actions without the prior written approval of a majority of the Class B ordinary shares in issue, including entering into a merger, consolidation, reorganization or other business combination or a transaction or series of transactions that would result in a change of control.

Staggered Board

Our Memorandum and Articles of Association that will be in effect upon the completion of this offering will provide that, from and after the date that David Vélez Osorno and his affiliates no longer beneficially own more than 50% of the voting power of our issued share capital, we shall cause our board of directors to be divided into three classes serving staggered three-year terms. This classification of our board of directors could have the effect of increasing the length of time necessary to change the composition of a majority of the board of directors. In general, at least two annual meetings of shareholders will be necessary for shareholders to effect a change in a majority of the members of the board of directors.

Exclusive Forum

Under our Memorandum and Articles of Association, unless we consent to a different forum, (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or any other person, (iii) any action or proceeding arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the Companies Act, our Memorandum and Articles of Association, or any other provision of applicable law, (iv) any action or proceeding seeking to interpret, apply, enforce or determine the validity of our Memorandum and Articles of Association or (v) any action or proceeding as to which the Companies Act confers jurisdiction on the Grand Court of the Cayman Islands may only be brought before the Grand Court of the Cayman Islands, in all cases subject to the court having jurisdiction over indispensable parties named as defendants. In addition, any complaint asserting a cause of action arising under the Securities Act may only be brought before the federal district courts of the United States. Nothing in our Memorandum and Articles of Association will preclude shareholders that assert claims under the Exchange Act from bringing such claims in any court, subject to applicable law.

Any person or entity purchasing or otherwise acquiring or holding any interest in our securities shall be deemed to have notice of and consented to these exclusive forum provisions. The enforceability of similar choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities laws or otherwise, a court could find the exclusive forum provision contained in our Memorandum and Articles of Association to be inapplicable or unenforceable.

Principal Differences between Cayman Islands and U.S. Corporate Law

The Companies Act was modelled originally on similar laws in England and Wales but does not follow subsequent statutory enactments in England and Wales. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

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Cayman Islands Company Law

We are a Cayman Islands exempted company incorporated with limited liability. We were incorporated as Nu Holdings Ltd. on February 26, 2016, subject to the Cayman Companies Act. Certain provisions of Cayman Islands company law are set out below but this section does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of the Cayman Companies Act and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar.

Protection of Non-controlling Shareholders and Shareholders’ Suits

The Grand Court of the Cayman Islands may, on the application of shareholders holding not less than one fifth of our shares in issue, appoint an inspector to examine our affairs and report thereon in a manner as the Grand Court shall direct.

Subject to the provisions of the Cayman Companies Act, any shareholder may petition the Grand Court which may make a winding-up order, if the court is of the opinion that this winding up is just and equitable.

Notwithstanding the U.S. securities laws and regulations that are applicable to us, general corporate claims against us by our shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by our Memorandum and Articles of Association.

The Cayman Islands courts ordinarily would be expected to follow English case law precedents, which permit a minority shareholder to commence a representative action against us, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority and the wrongdoers themselves control us, and (3) an irregularity in the passing of a resolution that requires a qualified (or special) majority.

Exempted Company

We are an exempted company with limited liability under the Cayman Companies Act. The Cayman Companies Act distinguishes between ordinary resident companies and exempted companies. Where the proposed activities of a company are to be carried out mainly outside of the Cayman Islands, the registrant can apply for registration as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:

an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;

an exempted company’s register of shareholders is not open to inspection;

an exempted company does not have to hold an annual general meeting;

an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

an exempted company may register as a limited duration company;

an exempted company may register as a segregated portfolio company; and

an exempted company may register as a special economic zone company.

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We are subject to reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers.

“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

Company Operations

An exempted company such as us must conduct its operations mainly outside the Cayman Islands. An exempted company is also required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorized share capital.

Share Capital

Under Cayman Companies Act, a Cayman Islands company may issue ordinary, preference or redeemable shares or any combination thereof. Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called the share premium account. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangements in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association, in such manner as the company may from time to time determine including, but without limitation, the following:

paying distributions or dividends to members;

paying up unissued shares of the company to be issued to members as fully paid bonus shares;

any manner provided in section 37 of the Cayman Companies Act;

writing-off the preliminary expenses of the company; and

writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

Notwithstanding the foregoing, no distribution or dividend may be paid to members out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if authorized to do so by its articles of association, by special resolution reduce its share capital in any way.

Financial Assistance to Purchase Shares of a Company or its Holding Company

There are no statutory prohibitions in the Cayman Islands on the granting of financial assistance by a company to another person for the purchase of, or subscription for, its own, its holding company’s or a subsidiary’s shares. Therefore, a company may provide financial assistance provided the directors of the company, when proposing to grant such financial assistance, discharge their duties of care and act in good faith, for a proper purpose and in the interests of the company. Such assistance should be on an arm’s-length basis.

Purchase of Shares and Warrants by a Company and its Subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a member and, for the avoidance of doubt, it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorized to do so by its

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articles of association, purchase its own shares, including any redeemable shares; an ordinary resolution of the company approving the manner and terms of the purchase will be required if the articles of association do not authorize the manner and terms of such purchase. A company may not redeem or purchase its shares unless they are fully paid. Furthermore, a company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. In addition, a payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless, immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

Shares that have been purchased or redeemed by a company or surrendered to the company shall not be treated as canceled but shall be classified as treasury shares if held in compliance with the requirements of Section 37A(1) of the Cayman Companies Act. Any such shares shall continue to be classified as treasury shares until such shares are either canceled or transferred pursuant to the Cayman Companies Act.

A Cayman Islands company may be able to purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. Thus there is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases. The directors of a company may under the general power contained in its memorandum of association be able to buy, sell and deal in personal property of all kinds.

A subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

Dividends and Distributions

Subject to a cash-flow solvency test, as prescribed in the Cayman Companies Act, and the provisions, if any, of the company’s memorandum and articles of association, a company may pay dividends and distributions out of its share premium account. In addition, based upon English case law which is likely to be persuasive in the Cayman Islands, dividends may be paid out of profits.

For so long as a company holds treasury shares, no dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made, in respect of a treasury share.

Disposal of assets

There are no specific restrictions on the power of directors to dispose of assets of a company, however, the directors are expected to exercise certain duties of care, diligence and skill to the standard that a reasonably prudent person would exercise in comparable circumstances, in addition to fiduciary duties to act in good faith, for proper purpose and in the best interests of the company under English common law (which the Cayman Islands courts will ordinarily follow).

Accounting and Auditing Requirements

A company must cause proper records of accounts to be kept with respect to: (i) all sums of money received and expended by it; (ii) all sales and purchases of goods by it; and (iii) its assets and liabilities.

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

If a company keeps its books of account at any place other than at its registered office or any other place within the Cayman Islands, it shall, upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law (Revised) of the Cayman Islands, make available, in electronic form or any other medium, at its registered office copies of its books of account, or any part or parts thereof, as are specified in such order or notice.

Exchange Control

There are no exchange control regulations or currency restrictions in effect in the Cayman Islands.

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Stamp Duty on Transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies save for those which hold interests in land in the Cayman Islands.

Inspection of Corporate Records

The members of a company have no general right to inspect or obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the company’s articles of association.

A Cayman Islands exempted company may maintain its principal register of members and any branch registers in any country or territory, whether within or outside the Cayman Islands, as the company may determine from time to time. There is no requirement for an exempted company to make any returns of members to the Registrar of Companies in the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of member, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act (As Revised) of the Cayman Islands.

Pursuant to the Cayman Companies Act, a company is required to maintain at its registered office a register of directors, alternate directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within 30 days of any change in such directors or officers, including a change of the name of such directors or officers.

Winding Up

A Cayman Islands company may be wound up by: (i) an order of the court; (ii) voluntarily by its members; or (iii) under the supervision of the court.

The court has authority to order winding up in a number of specified circumstances including where, in the opinion of the court, it is just and equitable that such company be so wound up.

A voluntary winding up of a company (other than a limited duration company, for which specific rules apply) occurs where the company resolves by special resolution that it be wound up voluntarily or where the company in general meeting resolves that it be wound up voluntarily because it is unable to pay its debt as they fall due. In the case of a voluntary winding up, the company is obliged to cease to carry on its business from the commencement of its winding up except so far as it may be beneficial for its winding up. Upon appointment of a voluntary liquidator, all the powers of the directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.

In the case of a members’ voluntary winding up of a company, one or more liquidators are appointed for the purpose of winding up the affairs of the company and distributing its assets.

As soon as the affairs of a company are fully wound up, the liquidator must make a report and an account of the winding up, showing how the winding up has been conducted and the property of the company disposed of, and call a general meeting of the company for the purposes of laying before it the account and giving an explanation of that account.

When a resolution has been passed by a company to wind up voluntarily, the liquidator or any contributory or creditor may apply to the court for an order for the continuation of the winding up under the supervision of the court, on the grounds that: (i) the company is or is likely to become insolvent; or (ii) the supervision of the court will facilitate a more effective, economic or expeditious liquidation of the company in the interests of the contributories and creditors. A supervision order takes effect for all purposes as if it was an order that the company be wound up

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by the court except that a commenced voluntary winding up and the prior actions of the voluntary liquidator shall be valid and binding upon the company and its official liquidator.

For the purpose of conducting the proceedings in winding up a company and assisting the court, one or more persons may be appointed to be called an official liquidator(s). The court may appoint to such office such person or persons, either provisionally or otherwise, as it thinks fit, and if more than one person is appointed to such office, the court shall declare whether any act required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons. The court may also determine whether any and what security is to be given by an official liquidator on his or her appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the court.

Reconstructions

Reconstructions and amalgamations may be approved by a majority in number representing 75 percent in value of the members or creditors, depending on the circumstances, as are present at a meeting called for such purpose and thereafter sanctioned by the courts. Whilst a dissenting member has the right to express to the court his or her view that the transaction for which approval is being sought would not provide the members with a fair value for their shares, the courts are unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management, and if the transaction were approved and consummated the dissenting member would have no rights comparable to the appraisal rights (that is, the right to receive payment in cash for the judicially determined value of their shares) ordinarily available, for example, to dissenting members of a United States corporation.

The Cayman Islands Economic Substance Law

The Cayman Islands enacted the International Tax Co-operation (Economic Substance) Act (As Revised), or “The Economic Substance Act,” together with related Guidance Notes and Regulations. We are required to comply with the economic substance requirements and file annual reports in the Cayman Islands as to whether or not they are carrying out such relevant activities and if they are, they must satisfy an economic substance test.

Takeovers

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than 90 per cent of the shares which are the subject of the offer accept, the offeror may, at any time within two months after the expiration of that four-month period, by notice require the dissenting members to transfer their shares on the terms of the offer. A dissenting member may apply to the Cayman Islands courts within one month of the notice objecting to the transfer. The burden is on the dissenting member to show that the court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority members.

Mergers and Similar Arrangements

The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies.

For these purposes, (a) ”merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies in the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company; and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The plan must be approved by the directors of each constituent company and filed with the Registrar of Companies together with a declaration as to: (1) the solvency of the consolidated or surviving company; (2) the merger or consolidation is bona fide and not intended to defraud unsecured creditors of the constituent companies; (3) no petition or other similar proceeding has been filed and remains outstanding and no order or resolution to wind up the company in any jurisdiction; (4) no receiver, trustee, administrator or similar person has been appointed in

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any jurisdiction and is acting in respect of the constituent company, its affairs or property; (5) no scheme, order, compromise or similar arrangement has been entered into or made in any jurisdiction with creditors; (6) a list of the assets and liabilities of each constituent company; (7) the non-surviving constituent company has retired from any fiduciary office held or will do so; (8) that the constituent company has complied with any requirements under the regulatory laws, where relevant; and (9) an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and published in the Cayman Islands Gazette.

Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, may be determined by the Cayman Islands’ court) if they follow the required procedures, subject to certain exceptions. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement in question is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:

we are not proposing to act illegally or ultra vires and the statutory provisions as to majority vote have been complied with;

the shareholders have been fairly represented at the meeting in question;

the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”

When a takeover offer is made and accepted by holders of 90.0% in value of the shares affected within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

If the arrangement and reconstruction are thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which might otherwise ordinarily be available to dissenting shareholders of U.S. corporations and allow such dissenting shareholders to receive payment in cash for the judicially determined value of their shares.

Shareholders’ Suits

Class actions are not recognized in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings, which are similar. However, a class action suit could nonetheless be brought in a U.S. court pursuant to an alleged violation of U.S. securities laws and regulations.

In principle, we would normally be the proper plaintiff and as a general rule, whilst a derivative action may be initiated by a minority shareholder on behalf of our company in a Cayman Islands court, such shareholder will not be able to continue those proceedings without the permission of a Grand Court judge, who will only allow the action to continue if the shareholder can demonstrate that we have a good case against the defendant, and that it is proper for the shareholder to continue the action rather than our board of directors. Examples of circumstances in which derivative actions would be permitted to continue are where:

a company is acting or proposing to act illegally or beyond the scope of its authority;

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the act complained of, although not beyond the scope of its authority, could be effected duly if authorized by more than a simple majority vote that has not been obtained; and

those who control the company are perpetrating a “fraud on the minority.”

Corporate Governance

Cayman Islands law restricts transactions between a company and its directors unless there are provisions in the articles of association which provide a mechanism to alleviate possible conflicts of interest. Additionally, Cayman Islands law imposes on directors’ duties of care and skill and fiduciary duties to the companies which they serve. Under our Memorandum and Articles of Association, a director must disclose the nature and extent of his interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq/NYSE, and unless disqualified by the chairman of the relevant meeting, the interested director may vote in respect of any transaction or arrangement in which he or she is interested. The interested director shall be counted in the quorum at such meeting and the resolution may be passed by a majority of the directors present at the meeting.

Subject to the foregoing and our Memorandum and Articles of Association, our directors may exercise all the powers of Nu to vote compensation to themselves or any member of their body in the absence of an independent quorum.

As a foreign private issuer, we are permitted to follow home country practice in lieu of certain Nasdaq/NYSE corporate governance rules, subject to certain requirements. We currently rely, and will continue to rely, on the foreign private issuer exemption with respect to the following rules:

which requires that independent directors comprise a majority of a company’s board of directors. As allowed by the laws of the Cayman Islands, independent directors do not comprise a majority of our board of directors.

which requires that a company have a nominations committee comprised solely of “independent directors” as defined by Nasdaq/NYSE. As allowed by the laws of the Cayman Islands, we do not have a nominations committee nor do we have any current intention to establish one.

which require that compensation for our executive officers and selection of our director nominees be determined by a majority of independent directors. As allowed by the laws of the Cayman Islands, we do not have a nomination and corporate governance committee nor do we have any current intention to establish one.

which requires an issuer to obtain shareholder approval prior to an issuance of securities (in certain circumstances) in connection with certain events, including: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) private placements. Cayman Islands law does not require shareholder approval prior to an issuance of securities to the extent the securities are authorized.

Borrowing Powers

Our directors may exercise all the powers of Nu to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of Nu or of any third party. Such powers may be varied by a special resolution of shareholders (requiring a two-thirds majority vote of those shareholders attending and voting at a quorate meeting).

Indemnification of Directors and Executive Officers and Limitation of Liability

The Companies Act does not limit the extent to which a company’s articles of association may provide for indemnification of directors and officers, except to the extent that it may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum and Articles of Association provide that we shall indemnify and hold harmless our

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directors and officers against all actions, proceedings, costs, charges, expenses, losses, damages, liabilities, judgments, fines, settlements and other amounts incurred or sustained by such directors or officers, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil, criminal or other proceedings concerning us or our affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Directors’ Fiduciary Duties

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company. Accordingly, directors owe fiduciary duties to their companies to act bona fide in what they consider to be the best interests of the company, to exercise their powers for the purposes for which they are conferred and not to place themselves in a position where there is a conflict between their personal interests and their duty to the company. Accordingly, a director owes a company a duty not to make a profit based on his or her position as director (unless the company permits him or her to do so) and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. However, this obligation may be varied by the company’s articles of association, which may permit a director to vote on a matter in which he has a personal interest provided that he has disclosed that nature of his interest to the board of directors. Our Memorandum and Articles of Association provides that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq/NYSE, and unless disqualified by the chairman of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting.

A director of a Cayman Islands company also owes to the company duties to exercise independent judgment in carrying out his functions and to exercise reasonable skill, care and diligence, which has both objective and subjective elements. Recent Cayman Islands case law confirmed that directors must exercise the care, skill and diligence that would be exercised by a reasonably diligent person having the general knowledge, skill and experience reasonably to be expected of a person acting as a director. Additionally, a director must exercise the knowledge, skill and experience which he or she actually possesses.

A general notice may be given to the board of directors to the effect that (1) the director is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm; or (2) he or she is to be regarded as interested in any contract or arrangement which may after the date of the notice to the board of directors be made with a specified person who is connected with him or her, will be deemed sufficient declaration of interest. This notice shall specify the nature of the interest in question. Following the disclosure being made pursuant to our Memorandum and Articles of Association and subject to any separate requirement under applicable law or the listing rules of the Nasdaq/NYSE, and unless disqualified by the chairman of the relevant meeting, a director may vote in respect of any transaction or arrangement in which he or she is interested and may be counted in the quorum at the meeting.

In comparison, under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself or herself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief

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that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

Shareholder Proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our Memorandum and Articles of Association provide that, for so long as our founding shareholder controls a majority of the voting power of our shares, a general meeting of shareholders may be convened on the requisition of the holders of a majority of the voting power of our shares and, upon such requisition, the board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, if our founding shareholder controls less than a majority of the voting power of our shares, no shareholder shall have the power to requisition a meeting of shareholders. Our Memorandum and Articles of Association provide no other right to put any proposals before annual general meetings or extraordinary general meetings.

Cumulative Voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under Cayman Islands law, our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Removal of Directors

The office of a director shall be vacated automatically if, among other things, he or she (1) becomes prohibited by law from being a director; (2) becomes bankrupt or makes an arrangement or composition with his creditors; (3) dies or is in the opinion of all his co-directors, incapable by reason of mental disorder of discharging his duties as director; (4) resigns his office by notice to us; or (5) has for more than six months been absent without permission of the directors from meetings of the board of directors held during that period, and the remaining directors resolve that his/her office be vacated.

Transaction with Interested Shareholders

The Delaware General Corporation Law provides that; unless the corporation has specifically elected not to be governed by this statute, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that this person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting shares or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

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Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that the board of directors owe duties to ensure that these transactions are entered into bona fide in the best interests of the company and for a proper corporate purpose and, as noted above, a transaction may be subject to challenge if it has the effect of constituting a fraud on the minority shareholders.

Dissolution; Winding Up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. If the dissolution is initiated by the board of directors it may be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company resolves by ordinary resolution that it be wound up because it is unable to pay its debts as they fall due. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

Under the Companies Act, we may be dissolved, liquidated or wound up by a special resolution of shareholders (requiring a two-thirds majority vote of those shareholders attending and voting at a quorate meeting). Our Memorandum and Articles of Association also give our board of directors authority to petition the Cayman Islands Court to wind up Nu.

Variation of Rights of Shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles of Association, if the share capital is divided into more than one class of shares, the rights attached to any class may only be varied with the written consent of the holders of two-thirds of the shares of that class or the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.

Also, except with respect to share capital (as described above), alterations to our Memorandum and Articles of Association may only be made by special resolution of shareholders (requiring a two-thirds majority vote of those shareholders attending and voting at a quorate meeting).

Amendment of Governing Documents

Under the Delaware General Corporation Law, a corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under Cayman Islands law, our Memorandum and Articles of Association generally (and save for certain amendments to share capital described in this section) may only be amended by special resolution of shareholders (requiring a two-thirds majority vote of those shareholders attending and voting at a quorate meeting).

Rights of Non-Resident or Foreign Shareholders

There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in the Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

Limitations of Liability and Indemnification

See “Certain Relationships and Related Party Transactions—Limitation of Liability and Indemnification of Officers and Directors.”

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Transfer Agent and Registrar

Upon the completion of this offering, the transfer agent and registrar for our Class A ordinary shares will be . The transfer agent and registrar’s address is .

Listing

We intend to apply to list our Class A ordinary shares on Nasdaq/NYSE under the symbol “ ”.

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Description of Brazilian Depositary Receipts

The rights of holders of BDRs will be set forth in a deposit agreement between us and , as depositary of the BDR Program.

There are differences between holding BDRs and holding Class A ordinary shares.

General

Each BDR will represent Class A ordinary shares issued by us, maintained in custody by the custodian in the offices of , acting through its branch, at . The BDR Depositary’s office at which the BDRs will be managed is located at .

As a BDR holder, you will not be treated as one of our Class A ordinary shareholders and, as a result, you will not have any Class A ordinary shareholder rights.

The rights of our Class A ordinary shareholders are governed by the laws of the Cayman Islands and the provisions of our Memorandum and Articles of Association. See “Description of Share Capital.” The rights of holders of BDRs are governed by the laws and regulations of Brazil, as well as the provisions of the deposit agreement.

The following is a summary of the material provisions of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete information, you should read:

the rules and regulations applicable to BDRs, particularly CMN Resolution No. 3,568/08, CVM Instructions No. 332 and 480, as amended, and the Central Bank of Brazil Circular No. 3,691/13, as amended; and

the deposit agreement, copies of which are available for review upon request.

Deposit Agreement

Scope

The Deposit Agreement governs the relationship between us and the BDR Depositary with respect to the issuance, cancellation and registration, in Brazil, of the BDRs representing Class A ordinary shares issued by us and held by the custodian. The Deposit Agreement also governs the actions of the BDR Depositary with respect to the management of the BDR program and the services to be performed by the BDR Depositary for holders of BDRs.

BDR Registry Book; Ownership and Trading of BDRs

Pursuant to the deposit agreement, the BDRs may be issued and cancelled, as the case may be, by means of entries in the BDR registry book, which will be kept by the BDR Depositary. The BDR registry book will record the total number of BDRs issued in the name of the Central Depositary of the B3, the fiduciary holder of the BDRs. The BDRs will be held and blocked in a custody account with the Central Depositary of the B3 and held for trading on the B3 after the offering.

Therefore, neither over-the-counter transfers of the BDRs, nor transfers of the BDRs conducted in any private transaction market other than the B3, or in a clearinghouse other than the Central Depositary of the B3, will be admitted. Any transfer of BDRs (including transfers made by U.S. persons) will be conducted through broker-dealers or institutions authorized to operate on the B3.

Ownership of the BDRs is determined by entry of the beneficial holder’s name in the records of the Central Depositary of the B3, and evidenced by the custodial account statement issued by the Central Depositary of the B3. The Central Depositary of the B3 will inform the names of the BDRs holders to the BDR Depositary.

The BDR Depositary has advised us that holders of BDRs are not generally entitled to inspect the BDR Depositary’s transfer books or list of holders of BDRs, due to certain secrecy obligations under Brazilian law.

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Issuance and Cancellation of BDRs

The BDR Depositary will issue the BDRs in Brazil after confirmation by the custodian that a corresponding number of our Class A ordinary shares were deposited with the custodian, and after confirmation that all fees and taxes due in connection with this services were duly paid, as set forth in the deposit agreement.

As a result, an investor may at any time give instructions to a broker-dealer to purchase Class A ordinary shares on Nasdaq/NYSE, to be further deposited with the custodian in order to allow the BDR Depositary to issue BDRs.

In order to effect the financial settlement of the acquisition of our Class A ordinary shares on Nasdaq/NYSE with the intention of adhering to the BDR program, an investor must execute a foreign exchange agreement in conformity with the BDR program certificate registered with the Central Bank of Brazil and the broker certificate evidencing by the purchase of our Class A ordinary shares abroad.

Holders of BDRs may at any time request the cancellation of all or a portion of their BDRs by (a) instructing a broker-dealer operating in Brazil to cancel the BDRs with the BDR Depositary and (b) delivering evidence that all fees and taxes due in connection with this service were duly paid, as set forth in the deposit agreement. Brazilian investors will be required to send the proceeds of any cancellation of BDRs back to Brazil within seven days of the cancellation date. Non-Brazilian investors that are registered in Brazil as portfolio investors under CMN Resolution No. 4,373 do not need to send the proceeds of any sale of Class A ordinary shares into Brazil. In any event, the transaction must be recorded in the Central Bank of Brazil system.

For a brief description of the rules and regulations of the Central Bank of Brazil regarding such matters, see “Regulatory Overview—Brazil—Registration of BDRs with the CVM.”

Issuance of BDRs without underlying Class A ordinary shares

In no event may the BDR Depositary issue BDRs without confirmation by the custodian that a corresponding number of Class A ordinary shares were deposited with the custodian.

Restrictions on BDRs

Holders of BDRs may only exercise their rights indirectly through the BDR Depositary. Holders of BDRs may also face other difficulties in exercising their rights, as voting rights granted to shares and, indirectly, to BDRs, must be exercised by holders of BDRs through the BDR Depositary, which will instruct the Custodian accordingly. Although the mechanisms related to notices of shareholders’ meetings and voting instructions provided in the Deposit Agreement are intended to provide sufficient time for the exercise of these rights, there can be no assurance that these mechanisms will allow holders of BDRs to effectively exercise voting rights, particularly in the event that notice of a shareholders’ meeting or voting instruction does not timely reach BDR holders for reasons that are beyond our control and beyond the control of the BDR Depositary. Holders of BDRs are not entitled to physically attend our shareholders’ meetings.

Dividends and Other Cash Distributions

It is our present intention to retain any earnings for use in our business operations and, accordingly, we do not anticipate the board of directors declaring any dividends in the foreseeable future following our initial public offering. However, in the event of any future dividend, the BDR Depositary will distribute any dividends or other cash distributions paid by us to our shareholders. Such dividends will be paid to the BDR Depositary, who will transfer them to the Central Depositary of the B3 in its capacity as the fiduciary holder of the BDRs and the holder of record of the BDR registry book. The Central Depositary of the B3, in turn, will distribute the dividends to the BDR beneficiary holders recorded in its books. The distributions will be made in proportion to the number of our Class A ordinary shares represented by BDRs. For distribution purposes, amounts in reais and centavos will be rounded to the next lower whole centavo.

Before making a distribution, any withholding taxes that must be paid under applicable law will be deducted.

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Share Distributions

In the event of distributions of our Class A ordinary shares or a share split or reverse share split, the BDR Depositary will issue new BDRs corresponding to such new Class A ordinary shares deposited with the custodian and will credit them to the account of the Central Depositary of the B3. The Central Depositary of the B3, in turn, will credit new BDRs to the beneficiary holders recorded in its books. The BDR Depositary will distribute only whole BDRs. If any fractions of BDRs result and are insufficient to purchase a whole BDR, the BDR Depositary will use its best efforts to add such fractions and sell them in an auction on the B3, and the proceeds of the sale will be credited to BDR holders, proportionally with its holdings recorded in the books of the Central Depositary of the B3.

Other Distributions

The BDR Depositary will use its best efforts to distribute to BDR holders any other distribution paid in connection with Class A ordinary shares and deposited with the custodian.

The BDR Depositary is not required to make available to any BDR holder any distribution that it determines is unlawful or impractical. We have no obligation to register BDRs, Class A ordinary shares, rights or other securities under Brazilian law. We also have no obligation to take any other action to permit the distribution of BDRs, Class A ordinary shares, rights or other securities to BDR holders. This means that you may not receive distributions we make on our Class A ordinary shares or any value for them if it is illegal or impractical for us to make them available to you.

Pre-Emptive Rights

If we offer holders of our Class A ordinary shares any rights to subscribe for additional shares or any other rights, the same rights will be offered to BDR holders through the BDR Depositary, which will exercise these rights directly or indirectly, in the name of the BDR holders that have instructed the BDR Depositary to do so. The BDR holder is free to exercise or negotiate such rights, subject to applicable law.

Changes Affecting Deposited Class A Ordinary Shares

If we do any of the following:	Then the following will apply:

· Effect a split of Class A ordinary shares.	· Each BDR will automatically reflect its equal value of the new deposited Class A ordinary shares.

· Effect a reverse split of Class A ordinary shares.	· The BDR Depositary will effect an immediate cancellation of the BDRs required to reflect the new amount of our Class A ordinary shares deposited with the custodian.

· Recapitalize, amalgamate, reorganize, merge, consolidate, sell all or substantially all of our assets or take any similar action.	· The BDR Depositary will effect an immediate cancellation of the BDRs required to reflect the new amount of our Class A ordinary shares deposited with the custodian.

Voting Rights of BDRs

You have the right to instruct the BDR Depositary to vote the amount of our Class A ordinary shares represented by your BDRs. See “Description of Share Capital.” However, you may not know about a meeting sufficiently in advance to instruct the BDR Depositary to exercise your voting rights with respect to our Class A ordinary shares held by the custodian.

If we ask the BDR Depositary to ask for your instructions, the BDR Depositary will notify you of the upcoming meeting and will arrange to deliver our meeting materials to you. The materials will:

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describe the matters to be voted on; and

explain how you, on a certain date, may instruct the BDR Depositary to vote the underlying Class A ordinary shares as you direct.

For instructions to be valid, the BDR Depositary must receive them on or before the date specified in the notice to you. The BDR Depositary will, to the extent practical and subject to Cayman Islands law and the provisions of our Memorandum and Articles of Association, vote the underlying Class A ordinary shares or other deposited securities as you instruct.

The BDR Depositary will use its best efforts to vote or attempt to vote our Class A ordinary shares held by the custodian only if you have sent voting instructions and your instructions have been timely received. If we timely request the BDR Depositary to solicit your voting instructions but the BDR Depositary does not receive voting instructions from you by the specified date, it will not exercise the voting rights related to the Class A ordinary shares that it holds on your behalf.

We cannot ensure that you will receive voting materials in time to allow you to timely deliver your voting instructions to the BDR Depositary. In addition, the BDR Depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to vote and you may not have any recourse if your Class A ordinary shares are not voted as you requested. In addition, your ability to bring an action against us may be limited.

Cancellation of Registration Before the CVM

We may cancel registration with the CVM for the trading of BDRs on the B3. If we elect to do so, we must immediately inform the BDR Depositary of this request and follow the procedures to discontinue the BDR program as set forth in the Issuer’s Manual of the B3.

Depositary Fees

The BDR Depositary has advised that holders of BDRs will be subject to the following fees: (a) for issuance or cancellation, of BDRs, a fee of R$ per BDR issued or cancelled will be paid to the BDR Depositary, (b) in respect of any dividend declared and paid by us, % of the total amount of such dividend will be paid to the BDR Depositary and (c) in respect of other cash distribution made by us, % of the total amount of such distribution will be paid to the BDR Depositary. The BDR Depositary has further advised us that the foregoing fees relating to issuance or cancellation of BDRs will be payable by the investor through a brokerage house, and that the dividends and distributions will be discounted by the amount of the fee at the time that such dividend or distribution is paid.

Reports and Other Communications

The BDR Depositary will make available to you for inspection any reports and communications from us or made available by us at its principal executive office. The BDR Depositary will also, upon our written request, send to registered holders of BDRs copies of such reports and communications furnished by us under the deposit agreement.

Any such reports or communications furnished by us to the BDR Depositary will be furnished in Portuguese when so required under any Brazilian legislation.

Amendment and Termination of the Deposit Agreement

Pursuant to Brazilian law, we may agree with the BDR Depositary to amend the deposit agreement and the rights granted by the BDRs for any reason and without your consent. If such an amendment adds or increases fees or charges, except for taxes and other governmental charges or registration fees, cable, SWIFT, e-mail or fax transmission costs, delivery costs or other such expenses, or prejudices an important right of BDR holders, it will become effective only after days from the time that the BDR Depositary notifies you in writing of such amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your BDRs, to

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agree to the amendment and to be bound by the new terms of the deposit agreement and the rights granted by the BDRs.

The BDR Depositary will terminate the Deposit Agreement, if we ask it to do so, by mailing a notice of termination to you at least days before such termination. The BDR Depositary may also terminate the Deposit Agreement if the BDR Depositary notifies us of its intention to resign and we have not appointed a new depositary bank within days. In addition, in the event that the BDR Depositary or the custodian is advised in writing by reputable independent Brazilian or Cayman Islands counsel that the BDR Depositary reasonably could be subject to criminal or material civil liability, as reasonably determined by the BDR Depositary, as a result of our having failed to provide information or documents to the CVM or Nasdaq/NYSE, the BDR Depositary will have the right to terminate the deposit agreement upon at least days’ prior notice to you and to us, and the BDR Depositary will not be subject to any liability on account of such termination or such determination.

After termination, for a period of up to days, the deposit agreement requires the BDR Depositary and its agents to do only the following under such deposit agreement:

collect dividends and other distributions on the deposited securities;

sell rights and other property; and

deliver Class A ordinary shares and other deposited securities upon surrender of BDRs.

Liability of Owner for Taxes

You will be responsible for any taxes or other governmental charges payable on your BDRs or on our Class A ordinary shares deposited with the custodian. See “Taxation—Brazilian Tax Considerations.”

Limitations on Obligations and Liability to Holders of BDRs

The deposit agreement expressly limits our obligations and the obligations of the BDR Depositary, as well as our liability and the liability of the BDR Depositary. We and the BDR Depositary:

are obligated only to take the actions specifically set forth in the deposit agreement without negligence or bad faith;

are not liable if either of us is prevented or delayed by law or by circumstances beyond our control from performing our obligations under the deposit agreement;

are not liable if either of us exercises discretion permitted under the deposit agreement; and

may rely upon any documents we believe in good faith to be genuine and to have been signed or presented by the proper party.

Neither we nor the BDR Depositary will be liable for any failure to carry out any instructions to vote any of our Class A ordinary shares deposited with the custodian, or for the manner any vote is cast or the effect of any such vote, provided that any action or non-action is in good faith. The BDR Depositary has no obligation to become involved in a lawsuit or other proceeding related to the BDRs or the deposit agreement on your behalf or on behalf of any other person.

In the deposit agreement, we and the BDR Depositary agree to indemnify each other under certain circumstances.

Requirements for Depositary Services

Before the BDR Depositary delivers or registers transfers of BDRs, makes a distribution on BDRs or permits withdrawal of our Class A ordinary shares, the BDR Depositary may require:

payment of share transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any Class A ordinary shares or other deposited securities;

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production of satisfactory proof of citizenship or residence, exchange control approval or other information it deems necessary or proper; and

compliance with regulations it may establish, from time to time, consistent with the agreement, including presentation of transfer documents.

The BDR Depositary may refuse to deliver, transfer or register transfers of BDRs generally when the books of the BDR Depositary are closed or at any time if the BDR Depositary believes it advisable to do so.

General

We agree to: (a) fulfill all obligations imposed by CVM Instruction No. 332/00, CVM Instruction No. 480/09 and other applicable regulations; (b) disclose, in Brazil, any information required by the CVM regulation applicable to non-Brazilian issuers; and (c) cooperate with the BDR Depositary to simultaneously disclose, in Brazil, information we provide in our country of organization and in the jurisdictions in which our securities are traded.

Except as otherwise provided in the applicable rules and regulations, including the rules and regulations of the CVM regarding registration of a BDR program (see “Regulatory Overview—Brazil—Registration of BDRs with the CVM”), neither we nor the BDR Depositary will have any liability or responsibility whatsoever or otherwise for any action or failure to act by any owner or holder of BDRs relating to the owner’s or holder’s obligations under any applicable Brazilian law or regulation relating to foreign investment in Brazil in respect of a withdrawal or sale of Class A ordinary shares deposited with the custodian, including, without limitation, (i) any failure to comply with a requirement to register the investment pursuant to the terms of any applicable Brazilian law or regulation prior to such withdrawal, or (ii) any failure to report foreign exchange transactions to the Central Bank of Brazil, as the case may be. Each owner or holder of BDRs will be responsible for the report of any false information relating to foreign exchange transactions to the BDR Depositary, the CVM or the Central Bank of Brazil in connection with deposits or withdrawals of Class A ordinary shares deposited with the custodian.

Service Requests to the BDR Depositary

Any request for services provided for in the deposit agreement to be performed by the BDR Depositary may be made to any of the BDR Depositary’s branches, or by telephone at +55 (Brazilian state capitals and metropolitan regions) or +55 (other locations).

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Class A Ordinary Shares Eligible for Future Sale

Prior to this offering, there has been no public market for our Class A ordinary shares or BDRs, and we cannot predict the effect, if any, that market sales of shares of our Class A ordinary shares, including in the form of BDRs, or the availability of shares of our Class A ordinary shares for sale will have on the market price of our Class A ordinary shares or BDRs prevailing from time to time. Future sales of our Class A ordinary shares in the public market, including in the form of BDRs, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares of our Class A ordinary shares, including in the form of BDRs, will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our Class A ordinary shares, including in the form of BDRs, in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Following the completion of this offering, we will have a total of shares of our Class A ordinary shares outstanding, including in the form of BDRs. Of these outstanding shares, all shares of our Class A ordinary shares sold in this offering, including in the form of BDRs, will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act, would only be able to be sold in compliance with the Rule 144 limitations described below.

The remaining outstanding shares of our Class A ordinary shares will be, and shares underlying outstanding RSUs and shares subject to share options will be upon issuance, deemed “restricted securities” as defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which rules are summarized below. As a result of the lock-up and market standoff agreements described below and the provisions of our RRA (as defined below) described in “Description of Share Capital—Registration Rights,” and subject to the provisions of Rule 144 or Rule 701, shares of our Class A ordinary shares will be available for sale in the public market as follows:

beginning on the date of this prospectus, all shares of our Class A ordinary shares sold in this offering, including in the form of BDRs, will be immediately available for sale in the public market; and

beginning days after the date of this prospectus (subject to the terms of the lock-up and market standoff agreements described below) all remaining shares will become eligible for sale in the public market, of which shares will be held by affiliates and subject to the volume and other restrictions of Rule 144, as described below.

Lock-Up and Market Standoff Agreements

We will agree that we will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to any shares of our Class A ordinary shares or securities convertible into or exchangeable or exercisable for any shares of our Class A ordinary shares or publicly disclose the intention to make any offer, sale, pledge, disposition, or filing or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of Class A ordinary shares or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of Class A ordinary shares or such other securities, in cash or otherwise), in each case without the prior written consent of for a period of days after the date of this prospectus, other than the shares of our Class A ordinary shares to be sold hereunder and certain other exceptions.

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directly or indirectly, any shares of our Class A ordinary shares or any securities convertible into or exercisable or exchangeable for our Class A ordinary shares (including, without limitation, Class A ordinary shares or such other securities which may be deemed to be beneficially owned by such directors, executive officers, and shareholders in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a share option or warrant); (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Class A ordinary shares or such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Class A ordinary shares or such other securities, in cash or otherwise; or (iii) make any demand for or exercise any right with respect to the registration of any shares of our Class A ordinary shares or any security convertible into or exercisable or exchangeable for our Class A ordinary shares subject to certain exceptions.

In addition, our executive officers, directors, and holders of substantially all of our share capital and securities convertible into or exchangeable for our shares have entered into market standoff agreements with us under which they have agreed that, subject to certain exceptions, for a period of days after the date of this prospectus, they will not, without our prior written consent, dispose of or hedge any shares or any securities convertible into or exchangeable for shares of our Class A ordinary shares, including in the form of BDRs.

Rule 144

In general, Rule 144 provides that once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares of our Class A ordinary shares proposed to be sold for at least six months is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, Rule 144 provides that our affiliates or persons selling shares of our Class A ordinary shares on behalf of our affiliates are entitled to sell upon expiration of the market standoff agreements and lock-up agreements described above, within any three months, a number of shares of our Class A ordinary shares that does not exceed the greater of:

1% of the number of shares then outstanding, which will equal ordinary shares immediately after the completion of this offering; or

the average weekly trading volume of our Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales of our Class A ordinary shares made in reliance upon Rule 144 by our affiliates or persons selling shares of our Class A ordinary shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Rule 701 generally allows a shareholder who purchased shares of the company pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling those shares pursuant to Rule 701.

Registration Rights

In connection with this offering, we intend to amend and restate our IRA, which, as amended, we refer to as our RRA. Pursuant to the RRA, after the completion of this offering, the holders of up to shares of our Class A

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ordinary shares, or certain transferees, will be entitled to certain rights with respect to the registration of the offer and sale of those shares under the Securities Act. See “Description of Share Capital—Registration Rights” for a description of these registration rights. If the offer and sale of these shares of our Class A ordinary shares are registered, the shares will be freely tradable without restriction under the Securities Act, subject to the Rule 144 limitations applicable to affiliates, and a large number of shares may be sold into the public market.

Registration Statement

We intend to file a registration statement on Form S-8 under the Securities Act promptly after the effectiveness of the registration statement of which this prospectus forms a part to register shares of our Class A ordinary shares subject to RSUs and options outstanding, as well as reserved for future issuance, under our equity compensation plans. The registration statement on Form S-8 is expected to become effective immediately upon filing, and shares of our Class A ordinary shares covered by the registration statement will then become eligible for sale in the public market, subject to the Rule 144 limitations applicable to affiliates, vesting restrictions and any applicable market standoff agreements and lock-up agreements. See “Executive Compensation—Employee Benefit and Share Plans” for a description of our equity compensation plans.

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Taxation

The following summary contains a description of certain Cayman Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of our Class A ordinary shares. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase the Class A ordinary shares, is not applicable to all categories of investors, some of which may be subject to special rules, and does not address all of the Cayman Islands and U.S. federal income tax considerations applicable to any particular holder. The summary is based upon the tax laws of the Cayman Islands and regulations thereunder and upon the tax laws of the United States and regulations thereunder as of the date hereof, which are subject to change.

Prospective purchasers of our Class A ordinary shares should consult their own tax advisors about the particular Cayman Islands and U.S. federal, state, local and other tax consequences to them of the acquisition, ownership and disposition of our Class A ordinary shares.

Cayman Islands Tax Considerations

The Cayman Islands laws currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty or withholding tax applicable to us or to any holder of Class A ordinary shares. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands. The Cayman Islands is not party to any double tax treaties which are applicable to any payments made by or to our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

As a Cayman Islands exempted company with limited liability, we are entitled, upon application, to receive an undertaking as to tax concessions pursuant to Section 6 of the Tax Concessions Act (as revised). On September 9, 2019, we received this undertaking which provides that, for a period of 20 years from the date of issue of the undertaking, no law thereafter enacted in the Cayman Islands imposing any taxes to be levied on profits, income, gains or appreciation will apply to us or our operations.

Payments of dividends and capital in respect of our Class A ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required under Cayman Islands law on the payment of a dividend or capital to any holder of our Class A ordinary shares, nor will gains derived from the disposal of our Class A ordinary shares be subject to Cayman Islands income or corporation tax.

There is no income tax treaty or convention currently in effect between the United States and the Cayman Islands.

U.S. Federal Income Tax Considerations

In the opinion of Davis Polk & Wardwell LLP, our U.S. tax counsel, the following is a description of the material U.S. federal income tax considerations to U.S. Holders (as defined below) of owning and disposing of Class A ordinary shares or BDRs, but it does not purport to be a comprehensive description of all tax considerations that may be relevant to a particular person's decision to acquire our Class A ordinary shares or BDRs. This discussion applies only to a U.S. Holder that acquires Class A ordinary shares or BDRs in this offering and holds those Class A ordinary shares or BDRs as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax considerations that may be relevant in light of a U.S. Holder's particular circumstances, including alternative minimum tax considerations, the potential application of the provisions of the Internal Revenue Code of 1986, as amended, the “Code,” known as the Medicare contribution tax and tax considerations applicable to U.S. Holders subject to special rules, such as:

certain financial institutions;

insurance companies;

real estate investment trusts or regulated investment companies;

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dealers or traders in securities that use a mark-to-market method of tax accounting;

persons holding Class A ordinary shares or BDRs as part of a straddle, wash sale, hedging transaction, conversion transaction or other integrated transaction or entering into a constructive sale with respect to Class A ordinary shares or BDRs;

persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

persons that are subject to the "applicable financial statement" rules under Section 451(b) of the Code;

tax-exempt entities, including an "individual retirement account," or Roth IRA;

persons holding Class A ordinary shares or BDRs that own or are deemed to own ten percent or more of our stock (by vote or value);

persons owning Class A ordinary shares or BDRs in connection with a trade or business conducted outside of the United States; or

entities or arrangements classified as partnerships for U.S. federal income tax purposes.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds our Class A ordinary shares or BDRs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Class A ordinary shares or BDRs and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax considerations of owning and disposing of the Class A ordinary shares or BDRs.

This discussion is based on the Code, administrative pronouncements, judicial decisions, and final, temporary and proposed U.S. Treasury regulations, all as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.

A “U.S. Holder” is a beneficial owner of Class A ordinary shares or BDRs that is for U.S. federal income tax purposes:

a citizen or individual resident of the United States;

a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or

an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

In general, a U.S. Holder that owns BDRs will be treated as the owner of the underlying Class A ordinary shares represented by those BDRs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges BDRs for the underlying Class A ordinary shares represented by those BDRs.

U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our Class A ordinary shares or BDRs in their particular circumstances.

Except where otherwise indicated, this discussion assumes that we are not, and will not become, a passive foreign investment company, or “PFIC,” as described below.

Taxation of Distributions

Any distributions paid on our Class A ordinary shares or BDRs, other than certain pro rata distributions of our Class A ordinary shares or BDRs, will be treated as dividends for U.S. federal income tax purposes to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions will generally be reported to U.S. Holders as dividends. Subject to applicable limitations and the “Passive Foreign Investment Company” Rules discussed below, dividends paid by qualified foreign

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corporations to certain non-corporate U.S. Holders are taxable at rates applicable to long-term capital gains. A foreign corporation is treated as a qualified foreign corporation with respect to dividends paid on stock that is readily tradable on an established securities market in the United States. The Nasdaq/NYSE, on which the Class A ordinary shares are expected to be listed, is an established securities market in the United States, and we anticipate that our Class A ordinary shares should qualify as readily tradable, although there can be no assurances in this regard. Because the BDRs are not listed on a United States stock exchange, it is not entirely clear whether distributions on BDRs will be treated as “qualified dividend income” and therefore taxable to certain non-corporate U.S. holders at favorable rates applicable to long-term capital gains. Accordingly, non-corporate U.S. holders should consult their own tax advisors regarding the taxation of dividends paid on our BDRs.

U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their particular circumstances. The amount of any dividend will generally be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s or, in the case of BDRs, the depositary's receipt of the dividend.

Sale or Other Disposition of Class A Ordinary shares or BDRs

Subject to the discussion below under “—Passive Foreign Investment Company Rules,” for U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of Class A ordinary shares or BDRs will be capital gain or loss, and will be long-term capital gain or loss if a U.S. Holder has held the Class A ordinary shares or BDRs for more than one year. Long-term capital gains of individuals and other non-corporate U.S. Holders are eligible for reduced rates of taxation. The amount of the gain or loss will equal the difference between a U.S. Holder's tax basis in the Class A ordinary shares or BDRs disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Such gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to various limitations.

Passive Foreign Investment Company Rules

Under the Code, we will be a PFIC for any taxable year in which, after applying certain look-through rules, either (i) 75% or more of our gross income consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income.” We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation where we own, directly or indirectly, more than 25% (by value) of the corporation's stock. Passive income generally includes dividends, interest, rents, certain non-active royalties, and capital gains. Cash is generally a passive asset for these purposes.

The application of the PFIC rules to banks is unclear under present U.S. federal income tax law. Banks generally derive a substantial part of their income from assets that are interest bearing or that otherwise could be considered passive under the PFIC rules. The IRS recently issued the 2021 Proposed Regulations, and previously issued a notice in 1989 (Notice 89-81, the “Notice”) and the 1995 Proposed Regulations, that exclude from passive income any income derived in the active conduct of a banking business by a qualifying foreign bank, the “active bank exception.” The 2021 Proposed Regulations are proposed to be effective for taxable years of shareholders beginning on or after January 14, 2021, while the 1995 Proposed Regulations are proposed to be effective for taxable years beginning after December 31, 1994 and provide that taxpayers may apply the 1995 Proposed Regulations to a taxable year beginning after December 31, 1986, provided the 1995 Proposed Regulations are consistently applied to that taxable year and all subsequent taxable years.

The 2021 Proposed Regulations, the Notice, and the 1995 Proposed Regulations each have different requirements for qualifying as a foreign bank, and for determining the banking income that may be excluded from passive income under the active bank exception, but the preamble to the 2021 Proposed Regulations authorizes taxpayers to rely upon the Notice or the 1995 Proposed Regulations to determine whether income of a foreign bank may be treated as non-passive. Under both the 2021 Proposed Regulations and the 1995 Proposed Regulations, a qualifying foreign bank must be licensed in the country of its incorporation to do business as a bank and must also carry on one or more specified activities, including regularly receiving bank deposits from unrelated customers in the course of its banking business. While the 2021 Proposed Regulations are silent on this matter, under both the Notice and 1995 Proposed Regulations, loans made in the ordinary course of a banking business are not treated as passive assets.

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Based on the 1995 Proposed Regulations, including those which are proposed to be effective for taxable years beginning after December 31, 1994 and our current operations, income, assets and certain estimates and projections (such as the relative values of our assets, including goodwill, which is based on the expected price of our Class A ordinary shares and BDRs in this offering), we do not expect to be a PFIC for our 2021 taxable year. However, there can be no assurance that the IRS will agree with our conclusion. Among other reasons, whether we will be a PFIC in 2021 or any future taxable year is uncertain because: (i) the 1995 Proposed Regulations may not be finalized in their current form, (ii) PFIC status is determined on an annual basis at the end of each taxable year, (iii) we will hold a substantial amount of cash following this offering, which is categorized as a passive asset and (iv) the composition of our income and assets and the market value of our assets (which may be determined, in part, by reference to the market price of our Class A ordinary shares and BDRs, which could be volatile) may vary from time to time. The application of the 2021 Proposed Regulations is not entirely clear and, if we can no longer rely on the 1995 Proposed Regulations, and the 2021 Proposed Regulations are adopted in their current form, there can be no assurances that we will not be considered a PFIC for any taxable year. If we are a PFIC for any year during which a U.S. Holder holds Class A ordinary shares or BDRs, we would generally continue to be treated as a PFIC with respect to such holder for all succeeding years during which such holder holds Class A ordinary shares or BDRs, even if we ceased to meet the threshold requirements for PFIC status.

If we were a PFIC for any taxable year and any of our subsidiaries or other companies in which we owned or were treated as owning equity interests were also a PFIC (any such entity, a “Lower-tier PFIC”), a U.S. Holder would be deemed to own a proportionate amount (by value) of the shares of each Lower-tier PFIC and would be subject to U.S. federal income tax according to the rules described in the subsequent paragraph on (i) certain distributions to us by a Lower-tier PFIC and (ii) our disposition of shares of Lower-tier PFICs, in each case as if such holder held such shares directly, even though such holder may not have received the proceeds of those distributions or dispositions.

If we were a PFIC for any taxable year during which a U.S. Holder held Class A ordinary shares or BDRs, absent making certain elections (as described below), such holder would generally be subject to adverse tax consequences. Generally, gain recognized upon a disposition (including, under certain circumstances, a pledge) of the Class A ordinary shares or BDRs by such U.S. Holder would be allocated ratably over such U.S. Holder's holding period for the Class A ordinary shares or BDRs. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for that taxable year for individuals or corporations, as applicable, and an interest charge would be imposed on the resulting tax liability. Further, to the extent any distribution in respect of our Class A ordinary shares or BDRs exceeded 125% of the average of the annual distributions on Class A ordinary shares or BDRs received by the U.S. Holder during the preceding three years or its holding period, whichever was shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above.

Alternatively, if we were a PFIC and if the Class A ordinary shares or BDRs were “regularly traded” on a “qualified exchange,” a U.S. Holder would be eligible to make a mark-to-market election that would result in tax treatment different from the general tax treatment for PFICs described above. The Class A ordinary shares and BDRs would be treated as “regularly traded” for the year of this offering if more than a de minimis quantity of the Class A ordinary shares or BDRs, as applicable, were traded on a qualified exchange on at least 1/6 of the days remaining in the quarter in which this offering occurs, and for years other than this on at least 15 days during each remaining calendar quarter. The Nasdaq/NYSE, on which the Class A ordinary shares are expected to be listed, is a qualified exchange for this purpose. A non-U.S. exchange is a “qualified exchange” if it is regulated by a governmental authority in the jurisdiction in which the exchange is located and with respect to which certain other requirements are met. The Internal Revenue Service has not identified specific non-U.S. exchanges that are “qualified” for this purpose. Although we expect that the B3, on which our BDRs are expected to be listed, would constitute a qualified exchange, there can be no assurance in this regard or as to whether the mark-to-market election would otherwise be available with respect to the BDRs. Once made, the election cannot be revoked without the consent of the IRS unless the Class A ordinary shares or BDRs, if applicable, cease to be marketable.

If a U.S. Holder makes the mark-to-market election (assuming such election is available with respect to the BDRs), such holder will generally recognize as ordinary income any excess of the fair market value of such holder's Class A ordinary shares or BDRs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the Class A ordinary shares or BDRs over their fair

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market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, such holder's tax basis in their Class A ordinary shares or BDRs will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of Class A ordinary shares or BDRs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). This election will not apply to any of our non-U.S. subsidiaries. Accordingly, a U.S. Holder may continue to be subject to tax under the PFIC excess distribution regime with respect to any Lower-tier PFICs notwithstanding a mark-to-market election for the Class A ordinary shares or BDRs.

We do not intend to prepare or provide the information necessary for a U.S. Holder to make a qualified electing fund election.

In addition, if we were a PFIC for the taxable year in which we paid a dividend or for the prior taxable year, the favorable tax rates applicable to long-term capital gains discussed above with respect to dividends paid to non-corporate U.S. Holders would not apply.

If a U.S. Holder owns Class A ordinary shares or BDRs during any year in which we are a PFIC, such holder must generally file annual reports containing such information as the U.S. Treasury may require on IRS Form 8621 (or any successor form) with respect to us, generally with such holder's federal income tax return for that year. A failure to file one or more of these forms as required may toll the running of the statute of limitations in respect of each of the U.S. Holder's taxable years for which such form is required to be filed. As a result, the taxable years with respect to which the U.S. Holder fail to file the form may remain open to assessment by the IRS indefinitely, until the form is filed.

U.S. Holders should consult their tax advisers regarding the potential application of the PFIC rules, including whether the elections discussed above would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that the U.S. Holder is not subject to backup withholding.

Backup withholding is not an additional tax. The amount of any backup withholding from a payment to the U.S. Holder will be allowed as a refund or credit against the U.S. Holder's our U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.

Information with Respect to Foreign Financial Assets

Certain U.S. Holders who are individuals (and certain entities) may be required to report information on their U.S. federal income tax returns relating to an interest in our Class A ordinary shares or BDRs, subject to certain exceptions (including an exception for Class A ordinary shares or BDRs held in accounts maintained by certain U.S. financial institutions). U.S. Holders should consult their tax advisers regarding the effect, if any, of this requirement on their ownership and disposition of the Class A ordinary shares or BDRs.

Brazilian Tax Considerations

The following summary contains a description of certain Brazilian tax considerations relating to the acquisition, ownership and disposition of BDRs and our shares by an investor that is not domiciled or resident in Brazil for Brazilian tax purposes, each a Non-Resident Holder.

The following is a general discussion and, therefore, it does not specifically address all of the tax considerations that may be relevant to a Non-Resident Holder’s decision to acquire BDRs and our shares and it is not applicable to all categories of Non-Resident Holders, some of which may be subject to special tax rules not specifically addressed

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herein. This summary also does not address any tax consequences under the tax laws of any state or municipality of Brazil. The present description is based upon the tax laws of Brazil, in effect as of the date of this offering memorandum, which are subject to change, possibly with retroactive effect and to differing interpretations. Any change in the applicable Brazilian laws and regulations may impact the consequences described below.

The tax consequences described below do not take into account tax treaties entered into by Brazil and other countries. Prospective purchasers of BDRs and our shares are advised to consult their own tax advisors with respect to an investment in BDRs and our shares in light of their particular circumstances.

Low or Nil Tax Jurisdictions

According to Law No 9,430, dated December 27, 1996, as amended, a Low or Nil Tax Jurisdiction is a country or location that (i) does not impose taxation on income, (ii) imposes income tax at a rate lower than 20%, or (iii) imposes restrictions on the disclosure of shareholding composition or investment ownership.

Additionally, on June 24, 2008, Law No. 11,727 introduced the concept of a “privileged tax regime,” in connection with transactions subject to Brazilian transfer pricing rules and also applicable to thin capitalization/cross border interest deductibility rules, which is broader than the concept of a Low or Nil Tax Jurisdiction. Pursuant to Law 11,727, a jurisdiction will be considered a Privileged Tax Regime if it (i) does not tax income or taxes it at a maximum rate lower than 20% or 17.0% provided that the requirements set forth in Normative Ruling No. 1,530 dated December 19, 2014 and Ordinance No. 488 are met; (ii) grants tax benefits to non-resident entities or individuals (a) without the requirement that they carry out substantial economic activity in the country or dependency or (b) contingent on the non-exercise of substantial economic activity in the country or dependency; (iii) does not tax or that taxes income generated abroad at a maximum rate lower than 20% or 17.0% provided that the requirements set forth in Normative Ruling No. 1,530 and Ordinance No. 488 are met; or (iv) does not provide access to information related to shareholding composition, ownership of assets and rights or economic transactions carried out.

On November 28, 2014, the Brazilian tax authorities issued Ordinance No. 488, which decreased these minimum thresholds from 20% to 17% for specific cases. Under Ordinance No. 488, the 17% threshold applies only to countries and regimes aligned with international standards of fiscal transparency, in accordance with rules to be established by the Brazilian tax authorities. The Ordinance No. 488 has lowered the threshold rate, Normative Ruling No. 1,037, which identifies the countries considered to be Low or Nil Tax Jurisdictions and the locations considered as Privileged Tax Regimes, has not been amended to reflect the 17% threshold.

In addition, on June 4, 2010, the Brazilian Tax Authorities enacted Normative Ruling No. 1,037, as amended, listing (i) the countries and jurisdictions considered as Low or Nil Tax Jurisdictions and (ii) the locations considered Privileged Tax Regimes. Normative Ruling No. 1,037 has not been amended thus far to reflect the threshold changes previously mentioned.

Although, we believe that the best interpretation of Law No. 11,727/08 to be that the new concept of “privileged tax regime” would be applicable solely for purposes of transfer pricing and thin capitalization rules. However, we are unable to ascertain whether or not the privileged tax regime concept will be extended to the concept of Low or Nil Tax Jurisdiction, though the Brazilian tax authorities appear to agree with our position, in view of the provisions introduced by Normative Ruling No. 1,037, dated as of June 4, 2010, as amended, which presents two different lists (Low or Nil Tax Jurisdictions—taking into account the non-transparency rules—and privileged tax regimes).

Notwithstanding the above, we recommend that you consult your own tax advisors regarding the consequences of the implementation of Law No. 11,727, Normative Ruling No. 1,037 and of any related Brazilian tax law or regulation concerning Low or Nil Tax Jurisdictions or “privileged tax regimes.”

Income Tax

Dividends

Dividends arising from BDRs and our shares and paid by us should not be subject to taxation in Brazil when paid in favor of a Non-Resident Holder.

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There is an ongoing public political discussion in Brazil in relation to reform in its tax system regarding income tax that may have implications to the levy of Brazilian withholding or other tax on the payment of dividends. The implementation of such tax reform, however, will require modifications in law through a bill of law voted by the Brazilian National Congress. Nevertheless, we are aware that there are certain bills of law that seek to revoke the income tax exemption on dividends – these bills of law are still pending analysis and approval from specific committees of the National Congress before being put to vote. Thus, there can be no assurance that the current tax exemption on dividends distributed by Brazilian companies will continue in the future. At any case, any potential taxation being imposed upon dividends would become effective only in the year following the enactment of the relevant law.

Interest on Shareholders’ Equity

Law No. 9,249, dated December 26, 1995, as amended, allows a Brazilian corporation, such as ourselves, to make distributions to shareholders of interest on shareholders’ equity as an alternative to carrying out dividends distributions and to treat those payments as a deductible expense for purposes of calculating Brazilian corporate income tax and social contribution on net profits provided that the limits described below are observed.

For tax purposes, this interest is limited to the daily pro rata variation of the Brazilian long-term interest rate, or “TJLP,” as determined by the Central Bank of Brazil from time to time, and the amount of the deduction may not exceed the greater of:

50% of net profits (after deduction of social contribution on net profits before taking into account the provision for corporate income tax and the amounts attributable to shareholders as interest on net equity) for the period in respect to which the payment is made; or

50% of the sum of retained profits and profit reserves as of the year date of the beginning of the period in respect of which the payment is made.

Payments of interest on net equity to a Non-Resident Holder are subject to WHT at the rate of 15%, or 25% if the Non-Resident Holder is domiciled in a Low or Nil Tax Jurisdiction, as detailed below.

Payments of interest on equity to a Non-Resident Holder may be included, at their net value, as part of any minimum mandatory dividend. In accordance with the applicable law, to the extent payments of interest on shareholders’ equity are so included, the corporation is required to distribute to shareholders an amount sufficient to ensure that the net amount received by them, in respect to interest on shareholders' equity, after payment of the applicable Brazilian WHT plus the amount of declared dividends is at least equal to the amount of the minimum mandatory dividend.

Distributions of interest on shareholders’ equity to Non-Resident Holders may be converted into U.S. dollars and remitted outside of Brazil, subject to applicable exchange controls, to the extent that the investment is registered with the Central Bank of Brazil.

We cannot guarantee that the Brazilian federal government will not increase the WHT on interest on shareholders’ equity in the future or eliminate the interest on shareholders' equity altogether.

Assurance cannot be given that our board of directors will not recommend that future distributions of income should be made by means of interest on equity instead of dividends.

Capital Gains

According to Law No. 10,833, dated December 29, 2003, or “Law No. 10,833/03,” gains realized on the sale or other disposition of assets located in Brazil are generally subject to income tax in Brazil, regardless of whether the sale or disposition is made by the Non-Resident Holder to a resident or person domiciled in Brazil or to another non-resident.

BDRs are assets registered in Brazil, and may fall within the definition of assets located in Brazil for purposes of Law No. 10,833/03, although there may be different interpretations of the matter. Given the lack of precedent on the matter and in light of the general and unclear scope of regulations dealing with the subject, we cannot predict

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which position will ultimately prevail in the courts of Brazil. Our shares should not be treated as assets located in Brazil and therefore, their disposal should not generate income tax in Brazil.

For purposes of Brazilian taxation, the income tax rules on gains related to disposition of assets located in Brazil, such as BDRs, vary depending on the domicile of the Non-Resident Holder, the form by which such Non-Resident Holder holds its investment and/or how the disposition is carried out, as described below.

As a general rule, capital gains realized on the disposition of assets located in Brazil are equal to the difference between the amount in reais realized on the sale or exchange of the assets and their acquisition cost, without any correction for inflation. In this sense, note that there is an ongoing discussion on whether the capital gains should be calculated in reais or in the foreign currency at which the investment was originally carried out

Capital gains realized by a Non-Resident Holder on a sale or disposition of BDRs carried out on the Brazilian stock exchange, which includes transactions carried out on the organized over-the-counter, or “OTC market,” are:

exempt from income tax when the Non-Resident Holder (1) has performed its investment in Brazil pursuant to the rules of CMN Resolution No. 4,373/14 of the Brazilian National Monetary Council, or a “4,373 Holder;” and (2) is not resident or domiciled in a Low or Nil Tax Jurisdiction;

subject to income tax at a rate of 15% in the case of gains realized by (A) a Non-Resident Holder that (1) is not a 4,373 Holder and (2) is not resident or domiciled in a Low or Nil Tax Jurisdiction; or (B) a Non-Resident Holder that (1) is a 4,373 Holder and (2) is resident or domiciled in a Low or Nil Tax Jurisdiction; or

subject to income tax at a rate of up to 25% in the case of gains realized by a Non-Resident Holder that (1) is not a 4,373 Holder, and (2) is resident or domiciled in a Low or Nil Tax Jurisdiction.

As of January 1, 2017 capital gains arising on disposals of BDRs carried out outside a Brazilian stock exchange may be subject to progressive rates varying from 15% up to 22.5% (or 25% if the Non-Resident Holder is located in a Low or Nil Tax Jurisdiction). While such potential increase is not applicable to transactions carried out within the Brazilian stock exchange, there could be different interpretations on whether or not such rules would be applicable to a Non-Resident Holder in non-organized OTC market transactions.

Therefore, capital gains assessed on a sale or disposition of BDRs that is not carried out on the Brazilian stock exchange or the organized OTC market are, subject to the discussion in the prior paragraph, currently subject to: (1) income tax at a rate of 15% up to 22.5% when realized by any Non-Resident Holder that is not resident or domiciled in a Low or Nil Tax Jurisdiction; and (2) income tax at a rate of 25% when realized by a Non-Resident Holder resident or domiciled in a Low or Nil Tax Jurisdiction. If these gains are related to transactions conducted on the Brazilian non-organized OTC market with an intermediary, a withholding income tax of 0.005% on the sale value will also apply and can be used to offset the income tax due on the capital gain.

In the case of a redemption of shares by us, as well as on the withdrawal of BDRs in exchange for our shares, the positive difference between the amount received (or the market price of our shares received) by the Non-Resident Holder and the acquisition cost of the corresponding BDRs disposed will be treated as capital gain derived from a transaction of BDRs carried out outside a Brazilian stock exchange and is therefore subject to income tax at a rate of 15% or up to 25%, as described above.

Tax on Foreign Exchange Transactions, or “IOF/FX”

The conversion of reais into foreign currency and the conversion of foreign currency into reais may be subject to the IOF/FX. The rate of IOF/FX applicable to inflow and outflow transactions for the investment/divestment in BDRs is currently zero. The Brazilian government is permitted to increase the rate of the IOF/FX at any time, up to 25% of the amount of the foreign exchange transaction. However, any increase in rates may only apply to transactions carried out after the date of the increase in rate and not retroactively.

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Tax on Transactions Involving Bonds and Securities, or “IOF/Bonds”

Brazilian law imposes a tax on transactions involving bonds and securities IOF/Bonds, including those carried out on a Brazilian stock exchange. The rate of IOF/Bonds applicable to transactions involving us is currently zero. The Brazilian government is permitted to increase such rate at any time up to 1.5% per day, but only in respect of future transactions.

Other Brazilian Taxes

There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of BDRs by a Non-Resident Holder, except for gift and inheritance taxes levied by certain states of Brazil on gifts or bequests by non-resident individuals or entities to individuals or entities domiciled or residing within such states. There are no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of BDRs.

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Underwriting

This global offering consists of an international offering of our Class A ordinary shares, in the United States and elsewhere outside of Brazil, and a concurrent public offering of BDRs in Brazil and a concurrent placement of BDRs to investors located outside Brazil.

We are offering the shares of Class A ordinary shares described in this prospectus through a number of underwriters. is/are acting as representative(s) of the underwriters. We will enter into an underwriting agreement with the international underwriters. Subject to the terms and conditions of the underwriting agreement, we will agree to sell to the international underwriters and each international underwriter will severally agree to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of Class A ordinary shares listed next to its name in the following table:

Name	Number of Shares
Morgan Stanley & Co. LLC
Goldman Sachs & Co. LLC.
Citigroup Global Markets Inc.
Easynvest – Título, Corretora de Valores S.A.
Total

Easynvest – Título, Corretora de Valores S.A., or “NuInvest,” is not a broker-dealer registered with the SEC, and therefore may not make sales of any Class A ordinary shares in the United States or to U.S. persons, except in compliance with applicable U.S. laws and regulations. NuInvest is an affiliate of Nu. NuInvest will not act as a broker in Brazil and will not engage in any selling efforts in Brazil nor receive orders in connection with the offering of Class A ordinary shares except for the sale of BDRs in Brazil as mentioned below. The settlement of the sale of Class A ordinary shares will not occur in Brazil.

The international underwriters will be committed to purchase all the shares of Class A ordinary shares offered by us if they purchase any shares. The underwriting agreement will also provide that if an international underwriter defaults, the purchase commitments of non-defaulting international underwriters may also be increased or this offering may be terminated.

The international underwriters propose to offer the shares of Class A ordinary shares directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of US$ per share. After the initial offering of the shares to the public, the offering price and other selling terms may be changed by the international underwriters. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part. Sales of shares made outside of the United States may be made by affiliates of the international underwriters.

We have entered into a Brazilian underwriting agreement with a syndicate of Brazilian underwriters providing for the concurrent offering in Brazil of Class A ordinary shares in the form of BDRs. Pursuant to the terms of the Brazilian underwriting agreement, dated , 2021, between us, , , and B3, as intervening party, we and the Brazilian underwriters, each of the Brazilian underwriters has agreed, severally and not jointly, to place the number of Class A ordinary shares, in the form of BDRs, set forth opposite their names below.

Name	Number of BDRs
Easynvest – Título, Corretora de Valores S.A.
Total

The Brazilian underwriting agreement also provides that, if any of our BDRs are subscribed for but not purchased by investors, the Brazilian underwriters are obligated, severally and not jointly, to purchase them on a firm commitment basis on or about , 2021, in proportion to their respective commitment as per the table above, subject to certain conditions and exceptions.

The international underwriters will act as placement agents for the Brazilian underwriters, and will facilitate the placement of our BDRs to investors located outside Brazil that will invest in our BDRs in Brazil through the investment mechanisms regulated by the CMN, the CVM and the Central Bank of Brazil. None of the Brazilian

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underwriters are registered as a broker-dealer under the Exchange Act and will not engage in any offers, sales or placement of securities within the United States or to U.S. persons. All sales of BDRs in Brazil will be made through the Brazilian underwriters. Our BDRs purchased by investors outside Brazil will be delivered in Brazil and paid for in reais, and the offering of such BDRs is being underwritten by the Brazilian underwriters named below. The BDRs may be sold only to investors registered with the CVM and acting through custody accounts managed by local agents pursuant to CVM Resolution No. 13, dated November 18, 2020, and CMN Resolution No. 4,373, dated September 29, 2014, as amended, or with Law No. 4,131, dated September 3, 1962, as amended. See “Regulatory Overview—Brazil—Other Rules—Foreign Investment in Brazilian Financial Institutions.”

The closing of this international offering is not conditioned upon the closing of the concurrent Brazilian offering, but the closing of the concurrent Brazilian offering is conditioned upon the closing of this international offering, and there can be no assurance that the concurrent Brazilian offering will be completed on the terms described herein or at all.

The underwriters will have an option to buy up to additional shares of Class A ordinary shares, including in the form of BDRs, from us and the selling shareholders to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters will have 30 days from the date of this prospectus to exercise this option to purchase additional shares or BDRs. If any shares or BDRs are purchased with this option to purchase additional shares or BDRs, the underwriters will purchase shares in approximately the same proportion as shown in the tables above. If any additional shares of Class A ordinary shares or BDRs are purchased, the underwriters will offer the additional shares or BDRs on the same terms as those on which the shares and BDRs are being offered.

The underwriting fee is equal to the public offering price per share of Class A ordinary shares less the amount paid by the underwriters to us per share of Class A ordinary shares, including in the form of BDRs. The underwriting fee is US$ per share (or R$ per BDR). The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

	Without option to purchase additional shares exercise	With full option to purchase additional shares exercise
Per Class A ordinary share	US$	US$
Per BDR	US$	US$
Total	US$	US$

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees, and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately US$ .

The underwriters will agree to reimburse us for certain expenses incurred by us in connection with this offering upon closing of this offering.

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We will agree that we will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our Class A ordinary shares, including in the form of BDRs, or securities convertible into or exchangeable or exercisable for any shares of our Class A ordinary shares, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of Class A ordinary shares, including in the form of BDRs, or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of Class A ordinary shares, including in the form of BDRs, or such other securities,

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in cash or otherwise), in each case without the prior written consent of for a period of days after the date of this prospectus, other than the shares of our Class A ordinary shares, including in the form of BDRs, to be sold in the global offering and certain other exceptions.

Our directors, our executive officers, and holders of substantially all of our share capital and securities convertible into our shares have entered or will enter into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with limited exceptions, for a period of days after the date of this prospectus, may not, without the prior written consent of , (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our Class A ordinary shares, including in the form of BDRs, or any securities convertible into or exercisable or exchangeable for our Class A ordinary shares or BDRs (including, without limitation, Class A ordinary shares, including in the form of BDRs, or such other securities which may be deemed to be beneficially owned by such directors, executive officers and shareholders in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a share option or warrant); (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Class A ordinary shares, including in the form of BDRs, or such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Class A ordinary shares, including in the form of BDRs, or such other securities, in cash or otherwise; or (iii) make any demand for or exercise any right with respect to the registration of any shares of our Class A ordinary shares, including in the form of BDRs, or any security convertible into or exercisable or exchangeable for our Class A ordinary shares, including in the form of BDRs, subject to certain exceptions.

We will agree to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

We intend to apply to have our Class A ordinary shares approved for listing/quotation on Nasdaq/NYSE under the symbol “ .” We intend to apply to register the offering of our BDRs with the CVM to list and trade our BDRs on the B3 under the symbol “ .”

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing, and selling shares of Class A ordinary shares, including in the form of BDRs, in the open market for the purpose of preventing or retarding a decline in the market price of the Class A ordinary shares while this offering is in progress. These stabilizing transactions may include making short sales of the Class A ordinary shares, including in the form of BDRs, which involves the sale by the underwriters of a greater number of shares of Class A ordinary shares, including in the form of BDRs, than they are required to purchase in this offering and purchasing shares of Class A ordinary shares, including in the form of BDRs, on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A ordinary shares in the open market, including in the form of BDRs, that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

These activities may have the effect of raising or maintaining the market price of the Class A ordinary shares or the BDRs or preventing or retarding a decline in the market price of the Class A ordinary shares or the BDRs and, as a result, the price of the Class A ordinary shares or the BDRs may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on Nasdaq/NYSE, in the over-the-counter market or otherwise.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the

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underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses. Certain of the underwriters or their respective affiliates were lenders under certain of our term loan facilities entered into by our Mexican subsidiary Nu Servicios and guaranteed by us and our subsidiary Nu Pagamentos. Specifically, On January 25, 2021, our Mexican subsidiary Nu Servicios entered into a term loan credit facility with an affiliate of Goldman Sachs & Co. LLC, with interest accruing at a rate per annum equal to the Mexican TIIE + 1.18% and maturing on January 25, 2024. This term loan credit facility is guaranteed by us and our subsidiary Nu Pagamentos. As of March 31, 2021, US$15 million out of US$25 million was outstanding under this credit facility.

In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.

Prior to this offering, there has been no public market for our Class A ordinary shares or BDRs. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

the information set forth in this prospectus and otherwise available to the representatives;

our prospects and the history and prospects for the industry in which we compete;

an assessment of our management;

our prospects for future earnings;

the general condition of the securities markets at the time of this offering;

the recent market prices of and demand for, publicly traded Class A ordinary shares and BDRs of generally comparable companies; and

other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our Class A ordinary shares or BDRs, or that the Class A ordinary shares or BDRs will trade in the public market at or above the initial public offering price.

Conflicts of Interest

As described above, our affiliate, NuInvest, is participating as an agent in this offering. Since we own more than 10% of the common equity of NuInvest, a “conflict of interest” exists for NuInvest within the meaning of FINRA Rule 5121(f)(5)(B). Therefore, this offering will be conducted in compliance with the applicable requirements of FINRA Rule 5121. Pursuant to that rule, the appointment of a “qualified independent underwriter” is not required in connection with this offering because FINRA member firms primarily responsible for the U.S. offering are able to act in this capacity, as provided in Rule 5121. Any underwriter or agent with a conflict of interest under Rule 5121 will not confirm initial sales to any discretionary accounts over which it has authority without the prior specific written approval of the customer.

Extended settlement

We expect that delivery of the Class A ordinary shares will be made to investors on or about the business day following the date of the final prospectus (this settlement cycle being referred to as “T+ ”). Under Rule 15c6-1

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of the Securities Exchange Act of 1934, as amended, trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, if you wish to trade the securities before their delivery, you will be required, because the securities initially will settle in T+ , to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. If you wish to trade the securities before their delivery, you should consult your advisor.

Selling Restrictions

Other than in the United States and Brazil, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Australia

No placement document, prospectus, product disclosure statement, or other disclosure document has been lodged with the Australian Securities and Investments Commission, or the “ASIC,” in relation to this offering. This prospectus does not constitute a prospectus, product disclosure statement, or other disclosure document under the Corporations Act 2001, or the “Corporations Act,” and does not purport to include the information required for a prospectus, product disclosure statement, or other disclosure document under the Corporations Act.

Any offer in Australia of our Class A ordinary shares or BDRs may only be made to persons, or Exempt Investors, who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act), or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer our Class A ordinary shares or BDRs without disclosure to investors under Chapter 6D of the Corporations Act.

The Class A ordinary shares or BDRs applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of twelve months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation, or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Bermuda

The Class A ordinary shares or BDRs offered by this prospectus may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 of Bermuda which regulates the sale of securities in Bermuda. Additionally, non-Bermudian persons (including companies) may not carry on or engage in any trade or business in Bermuda unless such persons are permitted to do so under applicable Bermuda legislation.

Brazil

For purposes of Brazilian law, this offer of securities is addressed to you personally, upon your request and for your sole benefit, and is not to be transmitted to anyone else, to be relied upon elsewhere or for any other purpose either quoted or referred to in any other public or private document or to be filed with anyone without our prior, express and written consent. In Brazil, Class A ordinary shares will be offered, in the form of Brazilian Depositary

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Receipts, or “BDRs,” in an offering registered with the Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) pursuant to (i) Brazilian Federal Law No. 6,385, of December 7, 1976; and (ii) CVM Ruling No. 400, of December 29, 2003, as well as the applicable ANBIMA and B3 regulations.

As this prospectus does not constitute or form part of any public offering to sell or solicitation of a public offering to buy any shares or assets, the offering and THE CLASS A ORDINARY SHARES OFFERED HEREBY HAVE NOT BEEN, AND WILL NOT BE, AND MAY NOT BE OFFERED FOR SALE OR SOLD IN BRAZIL EXCEPT IN THE FORM OF BDRS OR IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE A PUBLIC OFFERING OR DISTRIBUTION UNDER BRAZILIAN LAWS AND REGULATIONS. DOCUMENTS RELATING TO THE CLASS A ORDINARY SHARES, AS WELL AS THE INFORMATION CONTAINED THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC, AS A PUBLIC OFFERING IN BRAZIL OR BE USED IN CONNECTION WITH ANY OFFER FOR SUBSCRIPTION OR SALE OF THE CLASS A ORDINARY SHARES TO THE PUBLIC IN BRAZIL.

British Virgin Islands

The Class A ordinary shares or BDRs offered by this prospectus are not being, and may not be offered to the public or to any person in the British Virgin Islands for purchase or subscription by or on our behalf. The Class A ordinary shares or BDRs may be offered to companies incorporated under the BVI Business Companies Act, 2004 (British Virgin Islands) (each a “BVI Company”), but only where the offer will be made to, and received by, the relevant BVI Company entirely outside of the British Virgin Islands.

This prospectus has not been, and will not be, registered with the Financial Services Commission of the British Virgin Islands. No registered prospectus has been or will be prepared in respect of the Class A ordinary shares or BDRs for the purposes of the Securities and Investment Business Act, 2010 or the Public Issuers Code of the British Virgin Islands.

Canada

The Class A ordinary shares or BDRs may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Class A ordinary shares or BDRs must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts, or “NI 33-105,” the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Cayman Islands

This prospectus does not constitute a public offer of the Class A ordinary shares or BDRs, whether by way of sale or subscription, in the Cayman Islands. Class A ordinary shares or BDRs have not been offered or sold, and will not be offered or sold, directly or indirectly, in the Cayman Islands.

Chile

The Class A ordinary shares or BDRs offered by this prospectus are not registered in the Securities Registry (Registro de Valores) or subject to the control of the Chilean Securities and Exchange Commission

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(Superintendencia de Valores y Seguros de Chile). This prospectus supplement and other offering materials relating to the offer of the Class A ordinary shares do not constitute a public offer of, or an invitation to subscribe for or purchase, the Class A ordinary shares or BDRs in the Republic of Chile, other than to individually identified purchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley de Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group of the public”).

China

This prospectus does not constitute a public offer of shares or BDRs, whether by sale or subscription, in the People’s Republic of China, or the “PRC.” The Class A ordinary shares or BDRs are not being offered or sold directly or indirectly in the PRC to or for the benefit of, legal or natural persons of the PRC.

Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the Class A ordinary shares or BDRs offered by this prospectus or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.

Dubai International Financial Centre

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or the “DFSA.” This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The Class A ordinary shares or BDRs to which this prospectus relates may be illiquid or subject to restrictions on its resale. Prospective purchasers of the Class A ordinary shares or BDRs offered should conduct their own due diligence on the Class A ordinary shares or BDRs. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

European Economic Area

In relation to each Member State of the European Economic Area (each a “Relevant State”), no Class A ordinary shares or BDRs have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the Class A ordinary shares or BDRs which has been approved by the competent authority in that Relevant State, or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that the Class A ordinary shares or BDRs may be offered to the public in that Relevant State at any time:

to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;

to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or

in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of Class A ordinary shares or BDRs shall require the Issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any Class A ordinary shares or BDRs in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and the Class A ordinary shares or BDRs to be offered so as to enable an investor to decide to purchase or subscribe for the Class A ordinary shares or BDRs, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

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Hong Kong

This Prospectus has not been and will not be approved by or registered with the Securities and Futures Commission of Hong Kong or the Registrar of Companies of Hong Kong. No person may offer or sell in Hong Kong, by means of any document, any Class A ordinary shares or BDRs other than (i) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong), or the “C(WUMP)O)” or which do not constitute an offer to the public within the meaning of the C(WUMP)O. No person may issue or have in its possession for the purposes of issue, in each case whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Class A ordinary shares or BDRs which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Class A ordinary shares or BDRs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Japan

No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended), or the “FIEL,” has been made or will be made with respect to the solicitation of the application for the acquisition of the Class A ordinary shares or BDRs.

Accordingly, the Class A ordinary shares or BDRs have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of Japan.

For Qualified Institutional Investors, or “QII”

Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the FIEL) in relation to the Class A ordinary shares or BDRs constitutes either a “QII only private placement” or a “QII only secondary distribution” (each as described in Paragraph 1, Article 23-13 of the FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the Class A ordinary shares or BDRs. The Class A ordinary shares or BDRs may only be transferred to QIIs.

For Non-QII Investors

Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the FIEL) in relation to the Class A ordinary shares or BDRs constitutes either a “small number private placement” or a “small number private secondary distribution” (each as is described in Paragraph 4, Article 23-13 of the FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the Class A ordinary shares or BDRs. The Class A ordinary shares or BDRs may only be transferred en bloc without subdivision to a single investor.

Korea

The Class A ordinary shares or BDRs offered by this prospectus have not been and will not be registered under the Financial Investments Services and Capital Markets Act of Korea and the decrees and regulations thereunder, or the “FSCMA,” and the Class A ordinary shares or BDRs have been and will be offered in Korea as a private placement under the FSCMA. None of the Class A ordinary shares or BDRs may be offered, sold or delivered directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law of Korea and the decrees and regulations thereunder, or the “FETL.” Furthermore, the purchaser of the Class A ordinary shares or BDRs will comply with all applicable regulatory requirements (including but not limited to requirements under the FETL) in connection with the purchase of

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the Class A ordinary shares or BDRs. By the purchase of the Class A ordinary shares or BDRs, the relevant holder thereof will be deemed to represent and warrant that if it is in Korea or is a resident of Korea, it purchased the Class A ordinary shares or BDRs pursuant to the applicable laws and regulations of Korea.

Kuwait

Unless all necessary approvals from the Kuwait Capital Markets Authority pursuant to Law No. 7/2010, its Executive Regulations, and the various Resolutions and Announcements issued pursuant thereto or in connection therewith have been given in relation to the marketing of and sale of the Class A ordinary shares or BDRs, these may not be offered for sale, nor sold in the State of Kuwait, or “Kuwait.” Neither this prospectus nor any of the information contained herein is intended to lead to the conclusion of any contract of whatsoever nature within Kuwait. With regard to the contents of this document we recommend that you consult a licensee as per the law and specialized in giving advice about the purchase of Class A ordinary shares or BDRs and other securities before making the subscription decision.

Malaysia

No prospectus or other offering material or document in connection with the offer and sale of the Class A ordinary shares or BDRs offered by this prospectus has been or will be registered with the Securities Commission of Malaysia, or “Commission,” for the Commission’s approval pursuant to the Capital Markets and Services Act 2007. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares or BDRs may not be circulated or distributed, nor may the Class A ordinary shares or BDRs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed end fund approved by the Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who acquires the Class A ordinary shares or BDRs, as principal, if the offer is on terms that the Class A ordinary shares or BDRs may only be acquired at a consideration of not less than RM250,000 (or its equivalent in foreign currencies) for each transaction; (iv) an individual whose total net personal assets or total net joint assets with his or her spouse exceeds RM3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the individual; (v) an individual who has a gross annual income exceeding RM300,000 (or its equivalent in foreign currencies) per annum in the preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a gross annual income of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve months; (vii) a corporation with total net assets exceeding RM10 million (or its equivalent in a foreign currencies) based on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million (or its equivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in the Labuan Financial Services and Securities Act 2010; and (xi) any other person as may be specified by the Commission; provided that, in each of the preceding categories (i) to (xi), the distribution of the Class A ordinary shares or BDRs is made by a holder of a Capital Markets Services License who carries on the business of dealing in securities. The distribution in Malaysia of this prospectus is subject to Malaysian laws. This prospectus does not constitute and may not be used for the purpose of public offering or an issue, offer for subscription or purchase, invitation to subscribe for or purchase any securities requiring the registration of a prospectus with the Commission under the Capital Markets and Services Act 2007.

Saudi Arabia

This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations as issued by the board of the Saudi Arabian Capital Market Authority, or “CMA,” pursuant to resolution number 2-11-2004 dated 4 October 2004 as amended by resolution number 1-28-2008, as amended. The CMA does not make any representation as to the accuracy or completeness of this document and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. Prospective purchasers of the Class A ordinary shares or BDRs offered hereby should conduct their own due diligence on the accuracy of the information relating to the Class A ordinary shares or BDRs. If you do not understand the contents of this document, you should consult an authorized financial adviser.

Singapore

This prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore and the securities will be offered pursuant to exemptions under the Securities and Futures Act, Chapter 289 of

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Singapore, or the “SFA.” Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares or BDRs may not be circulated or distributed, nor may the Class A ordinary shares or BDRs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Class A ordinary shares or BDRs are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a)

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b)

a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Class A ordinary shares or BDRs pursuant to an offer made under Section 275 of the SFA except:

(1)

to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(2)

where no consideration is or will be given for the transfer;

(3)

where the transfer is by operation of law;

(4)

as specified in Section 276(7) of the SFA; or

(5)

as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

South Africa

The Class A ordinary shares or BDRs may not be and, accordingly, are not being offered or sold to prospective investors in the Republic of South Africa. Accordingly, the offer of the Class A ordinary shares or BDRs will not constitute a public offer as defined in Section 96 of the Companies Act, 2008 (as amended), or the “Companies Act,” and this document does not, nor is it intended to, constitute a Prospectus prepared and registered under the Companies Act.

Switzerland

We have not and will not register with the Swiss Financial Market Supervisory Authority, or the “FINMA,” as a foreign collective investment scheme pursuant to Article 119 of the Federal Act on Collective Investment Scheme of 23 June 2006, as amended (CISA) and accordingly the Class A ordinary shares or BDRs being offered pursuant to this prospectus have not and will not be approved, and may not be licensable, with FINMA. Therefore, the Class A ordinary shares or BDRs have not been authorized for distribution by FINMA as a foreign collective investment scheme pursuant to Article 119 CISA and the Class A ordinary shares or BDRs offered hereby may not be offered to the public (as this term is defined in Article 3 CISA) in or from Switzerland. The Class A ordinary shares or BDRs may solely be offered to “qualified investors,” as this term is defined in Article 10 CISA, and in the circumstances set out in Article 3 of the Ordinance on Collective Investment Scheme of 22 November 2006, as amended, or the “CISO,” such that there is no public offer. Investors, however, do not benefit from protection under CISA or

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CISO or supervision by FINMA. This prospectus and any other materials relating to the Class A ordinary shares or BDRs are strictly personal and confidential to each offeree and do not constitute an offer to any other person. This prospectus may only be used by those qualified investors to whom it has been handed out in connection with the offer described herein and may neither directly or indirectly be distributed or made available to any person or entity other than its recipients. It may not be used in connection with any other offer and will in particular not be copied or distributed to the public in Switzerland or from Switzerland. This prospectus does not constitute an issue prospectus as that term is understood pursuant to Article 652a or 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the Class A ordinary shares or BDRs on the SIX Swiss Exchange or any other regulated secrities market in Switzerland, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

Taiwan

The Class A ordinary shares or BDRs offered by this prospectus have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the Class A ordinary shares or BDRs in Taiwan.

United Arab Emirates

The Class A ordinary shares or BDRs offered by this prospectus have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering and sale of securities. Further, this prospectus does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not intended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority or the Dubai Financial Services Authority.

United Kingdom

In relation to the United Kingdom, no Class A ordinary shares or BDRs have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the Class A ordinary shares or BDRs which has been approved by the Financial Conduct Authority, except that of the Class A ordinary shares or BDRs may be offered to the public in the United Kingdom at any time:

(a)

to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;

(b)

to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or

(c)

in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000, or “FSMA,”

provided that no such offer of Class A ordinary shares or BDRs shall require the Issuer or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any Class A ordinary shares or BDRs in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any Class A ordinary shares or BDRs to be offered so as to enable an investor to decide to purchase or subscribe for any Class A ordinary shares or BDRs, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

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Expenses of the Offering

The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, upon completion of this offering. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and the exchange listing fee.

Expenses	Amount
U.S. Securities and Exchange Commission registration fee	US	$
FINRA filing fee
Exchange listing fee
Printing and engraving expenses
Legal fees and expenses
Accounting fees and expenses
Transfer agent and registrar fees
Miscellaneous expenses
Total	US	$

All amounts in the table are estimates except the U.S. Securities and Exchange Commission registration fee, the exchange listing fee and the FINRA filing fee. We will pay all of the expenses of this offering.

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Legal Matters

Certain matters of U.S. federal and New York State law will be passed upon for us by Davis Polk & Wardwell LLP, and for the underwriters by White & Case LLP. The validity of the Class A ordinary shares offered in this offering and other legal matters as to Cayman Islands law will be passed upon for us by Campbells LLP. The validity of our BDRs and certain other matters of Brazilian law will be passed upon for us by Pinheiro Neto Advogados and for the underwriters by Mattos Filho, Veiga Filho, Marrey Junior e Quiroga Advogados.

Experts

The financial statements as of December 31, 2020, 2019 and 2018 and for each of the three years in the period ended December 31, 2020 included in this prospectus have been so included in reliance on the report of KPMG Auditores Independentes, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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Enforceability of Civil Liabilities

Cayman Islands

Nu Holdings Ltd. is registered under the laws of the Cayman Islands as an exempted company with limited liability. We are registered in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands have a less developed body of securities laws as compared to the United States and provide protections for investors to a significantly lesser extent. In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States. Campbells LLP, our counsel as to Cayman Islands law, and Pinheiro Neto Advogados, our counsel as to Brazilian law, have advised us that there is uncertainty as to whether the courts of the Cayman Islands or Brazil would, respectively, (1) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the Cayman Islands or Brazil against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. Our Cayman Islands counsel has informed us that the uncertainty with regard to Cayman Islands law relates to whether a judgment obtained from the United States courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands’ company. Because the courts of the Cayman Islands have yet to rule on whether such judgments are penal or punitive in nature, it is uncertain whether they would be enforceable in the Cayman Islands. Our Cayman Islands counsel has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, may be subject to enforcement proceedings as a debt in the courts of the Cayman Islands under the common law doctrine of obligation.

Brazil

A substantial portion of our assets are located outside the United States, in Brazil. In addition, some of the members of our board of directors and our officers are nationals or residents of Brazil and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Cognitect, Inc., with offices at 101 West Chapel Hill Street, Suite 300 Durham, NC 27705, as our agent to receive service of process with respect to any action brought against us in the United States under the federal securities laws of the United States or of any state in the United States arising out of this offering.

We have been advised by Pinheiro Neto Advogados, our Brazilian counsel, that a judgment of a United States court for civil liabilities predicated upon the federal securities laws of the United States may be enforced in Brazil, subject to certain requirements described below. Such counsel has advised that a judgment against us, the members of our board of directors or our executive officers obtained in the United States would be enforceable in Brazil without retrial or re-examination of the merits of the original action including, without limitation, any final judgment for payment of a certain amount rendered by any such court, provided that such judgment has been previously recognized by the Brazilian Superior Tribunal of Justice (Superior Tribunal de Justiça, or the “STJ”). That recognition will only be available, pursuant to Articles 963 and 964 of the Brazilian Code of Civil Procedure (Código de Processo Civil, Law No. 13,105, dated March 16, 2015, as amended), if the U.S. judgment:

complies with all formalities necessary for its enforcement;

is issued by a court of competent jurisdiction after proper service of process is made or after sufficient evidence of our absence has been given, as requested under the laws of the United States;

is not rendered in an action upon which Brazilian courts have exclusive jurisdiction, pursuant to the provisions of art. 23 of the Brazilian Code of Civil Procedure (Law No. 13,105/2015, as amended);

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is final and, therefore, not subject to appeal (res judicata) in the United States;

creates no conflict between the United States judgment and a previous final and binding (res judicata) judgment on the same matter and involving the same parties issued in Brazil;

is duly apostilled by a competent authority of the United States, according to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents dated as of October 5, 1961 authentication, or the “Hague Convention.” If such decision emanates from a country that is not a signatory of the Hague Convention, it must be duly authenticated by a Brazilian Diplomatic Office or Consulate;

is accompanied by a translation into Portuguese made by a certified translator in Brazil, unless an exemption is provided by an international treaty to which Brazil is a signatory; and

is not contrary to Brazilian national sovereignty or public policy and does not violate the dignity of the human person, as set forth in Brazilian law.

The judicial recognition process may be time-consuming and may also give rise to difficulties in enforcing such foreign judgment in Brazil. Accordingly, we cannot guarantee that judicial recognition of a foreign judgment would be successful, that the judicial recognition process would be conducted in a timely manner or that a Brazilian court would enforce a judgment of countries other than Brazil.

We believe original actions may be brought in connection with this initial public offering predicated on the federal securities laws of the United States in Brazilian courts and that, subject to applicable law, Brazilian courts may enforce liabilities in such actions against us or the members of our board of directors or our executive officers and certain advisors named herein.

In addition, a plaintiff, whether Brazilian or non-Brazilian, who resides outside Brazil or is outside Brazil during the course of litigation in Brazil and who does not own real property in Brazil must post a bond to guarantee the payment of the defendant’s legal fees and court expenses in connection with court procedures for the collection of money according to Article 83 of the Brazilian Code of Civil Procedure (Código de Processo Civil). This is so except in the case of: (1) claims for collection on a título executivo extrajudicial (an instrument which may be enforced in Brazilian courts without a review on the merits, or enforcement of foreign judgments that have been duly recognized by the Superior Court of Justice); (2) counterclaims as established; and (3) when an exemption is provided by an international agreement or treaty to which Brazil is a signatory.

If proceedings are brought in Brazilian courts seeking to enforce our obligations with respect to our Class A ordinary shares or BDRs, payment shall be made in reais. Any judgment rendered in Brazilian courts in respect of any payment obligations with respect to our Class A ordinary shares or BDRs would be expressed in reais. See “Risk Factors—Risks Relating to Our Class A Ordinary shares, our BDRs and the Offering—Judgments of Brazilian courts to enforce our obligations with respect to our Class A ordinary shares or BDRs may be payable only in reais.”

We have also been advised that the ability of a judgment creditor to satisfy a judgment by attaching certain assets of the defendant in Brazil is governed and limited by provisions of Brazilian law.

Notwithstanding the foregoing, we cannot guarantee that confirmation of any judgment will be obtained, or that the process described above can be conducted in a timely manner.

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Where You Can Find More Information

We have filed with the U.S. Securities and Exchange Commission a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

Upon completion of this offering, we will be subject to the informational requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy the reports and other information to be filed with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington D.C. 20549. Copies of the materials may be obtained from the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the SEC’s Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov, from which you can electronically access the registration statement and its materials.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors, principal shareholders and the selling shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We will send the transfer agent a copy of all notices of shareholders’ meetings and other reports, communications and information that are made generally available to shareholders. The transfer agent has agreed to mail to all shareholders a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the transfer agent and will make available to all shareholders such notices and all such other reports and communications received by the transfer agent.

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NU HOLDINGS LTD.

Index to Consolidated Financial Statements

	Page
Unaudited Interim Condensed Consolidated Financial Statements for the three-month period ended March 31, 2021
Unaudited Interim Condensed Consolidated Statements of Profit or Loss for the three-month periods ended March 31, 2021 and 2020	F-2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income or Loss for the three-month periods ended March 31, 2021 and 2020	F-3
Unaudited Interim Condensed Consolidated Statements of Financial Position as of March 31, 2021	F-4
Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the three-month periods ended March 31, 2021 and 2020	F-5
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2021 and 2020	F-6
Notes to the Unaudited Interim Consolidated Financial Statements	F-7

Consolidated Financial Statements as of December 31, 2020, 2019 and 2018
Report of Independent Registered Public Accounting Firm	F-55
Consolidated Statements of Profit or Loss for the years ended December 31, 2020, 2019 and 2018	F-57
Consolidated Statements of Comprehensive Income or Loss for the years ended December 31, 2020, 2019 and 2018	F-58
Consolidated Statements of Financial Position as of December 31, 2020, 2019 and 2018	F-59
Consolidated Statements of Changes in Equity for the years ended December 31, 2020, 2019 and 2018	F-60
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018	F-62
Notes to the Consolidated Financial Statements	F-63

F-1

Table of Contents

Unaudited Interim Condensed Consolidated Statements of Profit or Loss

For the three-month periods ended March 31, 2021 and 2020

(In thousands of U.S. Dollars)

	Note		3/31/2021			3/31/2020

Interest income and gains (losses) on financial instruments		5		127,345			131,243
Fee and commission income		5		117,718			84,912
Total revenue				245,063			216,155

Interest and other financial expenses		5		(31,743	)		(33,230	)
Transactional expenses		5		(26,349	)		(33,136	)
Credit loss allowance expenses		6		(71,294	)		(61,825	)
Total cost of financial and transactional services provided				(129,386	)		(128,191	)

Gross profit				115,677			87,964

Operating expenses
Customer support and operations		7		(32,130	)		(40,099	)
General and administrative expenses		7		(115,848	)		(70,624	)
Marketing expenses		7		(4,867	)		(6,093	)
Other income (expenses)		7		(16,199	)		(17,648	)
Total operating expenses				(169,044	)		(134,464	)

Loss before income taxes				(53,367	)		(46,500	)

Income taxes
Current taxes		24		(31,508	)		(6,337	)
Deferred taxes		24		35,392			19,404
Total income taxes				3,884			13,067

Loss for the three-month period				(49,483	)		(33,433	)

Earnings (loss) per share - basic and diluted		29		(0.220	)		(0.155	)

Weighted average number of outstanding shares - basic and diluted (in thousands of shares)		29		224,543			216,118

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-2

Table of Contents

Unaudited Interim Condensed Consolidated Statements of Comprehensive Income or Loss

For the three-month periods ended March 31, 2021 and 2020

(In thousands of U.S. Dollars)

	Note		3/31/2021			3/31/2020
Loss for the three-month period				(49,483	)		(33,433	)

Other comprehensive income or loss:

Effective portion of changes in fair value				2,733			8,915
Reclassified to profit or loss				(70	)		(193	)
Deferred income taxes				(1,059	)		(3,489	)
Cash flow hedge		25		1,604			5,233

Currency translation on foreign operations		25		(21,004	)		(53,354	)

Other comprehensive income or loss that may be reclassified to profit or loss subsequently				(19,400	)		(48,121	)

Change in fair value - own credit adjustment		15		(374	)		199
Other comprehensive income or loss that will not be reclassified to profit or loss subsequently:				(374	)		199

Total other comprehensive loss, net of tax				(19,774	)		(47,922	)

Total comprehensive loss for the three-month period				(69,257	)		(81,355	)

Total comprehensive loss attributable to shareholders of the parent company				(69,257	)		(81,355	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-3

Table of Contents

Unaudited Interim Condensed Consolidated Statements of Financial Position

As of March 31, 2021 and December 31, 2020

(In thousands of U.S. Dollars)

	Note		3/31/2021			12/31/2020
Assets
Cash and cash equivalents		9		2,200,663			2,343,780
Financial assets at fair value through profit or loss				4,405,577			4,378,118
Securities		10		4,356,451			4,287,277
Derivative financial instruments		14		34			80
Collateral for credit card operations		17		49,092			90,761
Financial assets at amortized cost				3,172,369			3,150,013
Compulsory deposits at central banks				98,694			43,542
Credit card receivables		11		2,787,813			2,908,907
Loans to customers		12		264,542			174,694
Interbank transactions				1,424			—
Other financial assets at amortized cost				19,896			22,870
Other assets		13		133,004			123,495
Deferred tax assets		24		178,552			125,131
Right-of-use assets				8,977			10,660
Property, plant and equipment				8,952			9,850
Intangible assets				12,162			12,372
Goodwill				831			831
Total assets				10,121,087			10,154,250

Liabilities
Financial liabilities at fair value through profit or loss				110,787			90,796
Derivative financial instruments		14		62,216			75,304
Instruments eligible as capital		15		13,063			15,492
Repurchase agreements				35,508			—
Financial liabilities at amortized cost				8,947,550			9,421,710
Deposits		16		5,461,652			5,584,862
Payables to credit card network		17		2,982,547			3,331,258
Borrowings and financing		18		103,220			97,454
Securitized borrowings		18		57,681			79,742
Senior preferred shares		21		342,450			328,394
Salaries, allowances and social security contributions				35,740			25,848
Tax liabilities				40,162			30,782
Lease liabilities				10,244			12,014
Provision for lawsuits and administrative proceedings		19		15,537			16,469
Deferred income		20		26,274			25,965
Deferred tax liabilities		24		38,135			8,741
Other liabilities				92,811			83,814
Total liabilities				9,317,240			9,716,139

Equity
Share capital		25		48			45
Share premium reserve		25		1,038,361			638,007
Accumulated gains (losses)		25		(117,288	)		(102,441	)
Other comprehensive income/loss		25		(117,274	)		(97,500	)
Total equity				803,847			438,111

Total liabilities and equity				10,121,087			10,154,250

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-4

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Unaudited Interim Condensed Consolidated Statements of Changes in Equity

For the three-month periods ended March 31, 2021 and 2020

(In thousands of U.S. Dollars)

									Other comprehensive income/loss
	Share capital		Share premium reserve			Accumulated gains (losses)			Translation reserve			Cash flow hedge reserve		Own credit revaluation reserve			Total shareholders' equity

Balances as of December 31, 2019		45		631,246			28,189			(46,981	)		1		(249	)		612,251

Losses for the three-month period		—		—			(33,433	)		—			—		—			(33,433	)
Share-based payments granted, net of shares withheld for employee taxes (note 8)		—		—			7,111			—			—		—			7,111
Stock options exercised		—		542			—			—			—		—			542
Shares repurchased (note 26)		—		(15	)		—			—			—		—			(15	)
Other comprehensive income or loss, net of tax (note 25)
Cash flow hedge		—		—			—			—			5,233		—			5,233
Currency translation on foreign entities		—		—			—			(53,354	)		—		—			(53,354	)
Own credit adjustment		—		—			—			—			—		199			199

Balances as of March 31, 2020		45		631,773			1,867			(100,335	)		5,234		(50	)		538,534

Balances as of December 31, 2020		45		638,007			(102,441	)		(97,081	)		49		(468	)		438,111
Losses for the three-month period		—		—			(49,483	)		—			—		—			(49,483	)
Share-based payments granted, net of shares withheld for employee taxes (note 8)		—		—			34,636			—			—		—			34,636
Stock options exercised		—		2,358			—			—			—		—			2,358
Capital increase (Series G) (note 25)		3		399,997														400,000
Shares repurchased (note 25)		—		(2,001	)		—			—			—		—			(2,001	)
Other comprehensive income or loss, net of tax (note 25)
Cash flow hedge		—		—			—			—			1,604		—			1,604
Currency translation on foreign entities		—		—			—			(21,004	)		—		—			(21,004	)
Own credit adjustment		—		—			—			—			—		(374	)		(374	)

Balances as of March 31, 2021		48		1,038,361			(117,288	)		(118,085	)		1,653		(842	)		803,847

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-5

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Unaudited Interim Condensed Consolidated Statements of Cash Flows

For the three-month periods ended March 31, 2021 and 2020

(In thousands of U.S. Dollars)

	Note		3/31/2021			3/31/2020

Cash flows from operating activities
Reconciliation of profit (loss) to net cash flows from operating activities:
Loss for the three-month period				(49,483	)		(33,433	)
Adjustments:
Depreciation and amortization				2,507			560
Credit loss allowance expenses		6		77,210			64,181
Deferred income taxes		24		(35,392	)		(19,404	)
Provision for lawsuits and administrative proceedings		19		338			131
Gains (losses) on financial instruments				87,090			(6,524	)
Interests accrued				16,946			4,353
Stock options granted		8		33,082			7,111
				132,298			16,975
Changes in operating assets and liabilities:
Securities				(1,089,592	)		102,672
Compulsory deposits at central banks				(65,951	)		—
Credit card receivables				(555,600	)		345,824
Loans to customers				(148,819	)		(24,499	)
Interbank transactions				(1,462	)		93
Other assets				(14,617	)		(17,671	)
Deposits				1,067,551			12,212
Payables to credit card network				354,124			(485,189	)
Deferred income				5,869			63
Other liabilities				111,629			364

Interest paid				(1,189	)		(2,112	)
Income tax paid				(16,102	)		(5,386	)
Cash flows (used in)/generated from operating activities				(221,862	)		(56,655	)

Cash flows from investing activities
Acquisition of fixed assets				(1,779	)		(245	)
Acquisition of intangible assets				(3,424	)		—
Cash flow (used in) generated from investing activities				(5,202	)		(245	)

Cash flows from financing activities
Capital increase		25		400,000			—
Payments of securitized borrowings		17		(15,873	)		(8,850	)
Proceeds from borrowings and financing		17		16,568			—
Payments of borrowings and financing		17		(4,729	)		(4,484	)
Lease payments				(1,080	)		(1,311	)
Exercise of stock options		25		2,358			542
Shares repurchased		25		(2,001	)		(15	)
Shares withheld for employee’s taxes		25		(882	)		—
Cash flows (used in) generated from financing activities				394,361			(14,118	)
Change in cash and cash equivalents				167,296			(71,018	)

Cash and cash equivalents
Cash and cash equivalents - beginning of the period		9		2,343,780			1,246,566
Foreign exchange rate changes on cash and cash equivalents				(310,413	)		(143,046	)
Cash and cash equivalents - end of the period		9		2,200,663			1,032,502

Increase in cash and cash equivalents				167,296			(71,018	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-6

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

(In thousands of U.S. Dollars, unless otherwise stated)

1. Operations

Nu Holdings Ltd. ("Company" or "Nu Holdings") was incorporated as an exempted Company under the Companies Law of the Cayman Islands on February 26, 2016. The address of the Company's registered office is Willow House, 4^th floor, Cricket Square, Grand Cayman - Cayman Islands. It has no operating activities.

The Company carries investments in several operating entities and, as of March 31, 2021, the significant subsidiaries are:

Nu Pagamentos S.A. (“Nu Pagamentos”), an indirect subsidiary domiciled in Brazil. Nu Pagamentos is engaged in the issuance and administration of credit cards and payment transfer through a prepaid account, as well as participation in other companies as partner or shareholder. Nu Pagamentos has as its primary products (i) a Mastercard international credit card (issued in Brazil where it allows payments for purchases to be made in monthly installments), fully controlled through a smartphone app, and (ii) “Conta do Nubank”, a 100% digital smartphone app, maintenance-free prepaid account with 100% of the Brazilian Interbank Certificate of Deposit rate (“CDI”) remuneration and features of a traditional bank account such as: electronic and peer-to-peer transfers, bill payments, withdrawals through the “24 Hours” ATM network, prepaid credit for mobile and debit functions.

●

Nu Financeira S.A. – SCFI (“Nu Financeira”), an indirect subsidiary also domiciled in Brazil, launched in February 2019, with personal loans as its main product. Nu Financeira offers customers in Brazil the possibility of loans that can be customized in relation to amounts, terms and conditions, number of installments, and transparent disclosure of any charges involved in the transaction, fully controlled through the abovementioned smartphone app. Loan issuance, repayment, and advance payments are available 24/7 through the “Conta do Nubank” account, directly in the app. Nu Financeira also grants credit to Nu Pagamentos credit card holders, due to overdue invoices, bill installments, revolving credit, among others.

●

Nu BN Servicios México, S.A. de CV (“Nu Servicios”), an indirect subsidiary domiciled in Mexico. Nu Servicios is engaged in the issuance and administration of credit cards. Its operations were presented to the Mexican market in August 2019 and the official launch occurred in March 2020. The credit card has similar characteristics to the Brazilian operation: an international credit card, with no annual fee, under the Mastercard banner, 100% controlled by a digital app.

●

Nu Colombia S.A. (“Nu Colombia”), an indirect subsidiary domiciled in Colombia, launched in September 2020 with operations related to credit cards.

The Company and its consolidated subsidiaries are referred to in these interim consolidated financial statements as the “Group” or "Nubank”.

F-7

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Nubank's business plan forecasts growth in Brazil, Mexico and Colombia’s operations related to transactions on already issued credit cards and an increase of personal loans, complemented by the issuance of new cards and new products. Accordingly, these interim consolidated financial statements were prepared based on the assumption of the Group continuing as a going concern, considering that recent losses are principally due to the expenses incurred to achieve the Group’s rapid growth, in accordance with its business plan.

The Company’s Board authorized the issuance of these interim consolidated financial statements on July 31, 2021.

Acquisition activities pending completion

(i)

Easynvest

In September 2020, the Group announced the acquisition, through the Brazilian subsidiary Nu DTVM, of 100% of the shares of the companies that are part of the investment platform Easynvest, the largest self-directed digital broker in Brazil. On March 31, 2021, the approval by the Brazilian Central Bank (“BACEN”) was still pending, and, therefore, there are no impacts on these interim financial statements. More information is disclosed in note 28.

(ii)

Akala

In December 2020, the subsidiary Nu BN Tecnologia, S.A de CV (“Nu Tecnologia”) announced the acquisition of 100% of the shares of AKALA, S.A. DE C.V. (“Akala”), a Mexican Financial Cooperative Association (SOFIPO) engaged in fundraising and financial services. The purpose of the transaction is to increase the offer of financial products in Mexico. At the date of the announcement of the acquisition, Akala did not have any operations but it owned the license which will allow Nubank to provide certain financial services in Mexico. The acquisition is pending approval by the Mexican National Baking and Stock Commission (“CNBV”). Therefore, there are no impacts on these interim financial statements.

COVID-19

In response to the COVID-19 pandemic, many governments worldwide have taken measures related to social distancing, quarantine and travel restrictions affecting the population of these countries, including those where the Nubank operates. As a result, the Group has put into action a series of initiatives to ensure the health of its employees, service providers and customers, as follows:

Relaxed conditions for customers to renegotiate an extension in the maturities of the loans.

Nubank in Brazil was also responsible for assisting its customers with receiving an economic support via an emergency cash assistance from the federal government.

The Group created a new function in the app so that customers can donate cash for various institutions that are actively working to combat the pandemic.

F-8

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

The Group created a Crisis Committee to closely monitor the main indicators such as credit default, liquidity, operational and strategic activities, and regulatory framework. The Committee aimed to identify changes in the risk profile and behavior of customers, helping to mitigate credit risk by taking decisions to reduce the effects from the pandemic. The analyses were used to guide business decisions based on sustainability and risk management.

In addition, all employees are currently working remotely. Even so, Nubank has maintained its net promoted scores (NPS) substantially at the same level as prior to the pandemic. As a result, Nubank’s operation continued to grow, and the Group has continued to hire new employees globally.

It has been more than one year since the pandemic began. There was a drop in the average volume of customer’s purchases by credit card during the critical period of the pandemic in Brazil, which occurred during the second quarter of 2020, which affected Nubank’s revenue. However, in the beginning of the third quarter of 2020, total revenue reached pre- pandemic levels, and for the first quarter of 2021, total revenue had increased 75% when compared to the same period of 2020.

As a result of the abovementioned situation, Nubank continues to analyze the effects of the pandemic on its activities, estimates and judgements, and the application of significant accounting policies related to credit loss allowance. Details of the impacts of the pandemic on the credit loss allowance are shown in notes 11 and 12, as well as in note 26.

2. Statement of compliance

These interim condensed consolidated financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards ("IFRS”) as issued by the International Accounting Standard Board. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements.

The Group’s interim condensed consolidated financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting issued by the International Accounting Standard Board (“IASB”). These interim condensed consolidated financial statements do not include all the notes of the type normally included in an annual consolidated financial statement. Accordingly, this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2020 (the "Annual Financial Statements”). The accounting policies and critical accounting estimates and judgments adopted are consistent with those of the previous financial year and corresponding interim reporting period.

F-9

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Functional currency and foreign currency translation

Nu Holding’s functional and presentation currency

Nu Holdings does not have any direct customers and its main direct activities are (i) investing activities in the operating entities in Brazil, Mexico, Colombia and in other countries, (ii) financing activities, either equity or debt; and (iii) the payment of certain general and administrative expenses. As a result, these are considered its primary and secondary activities and all of them are substantially based on US Dollars (“USD”), which was selected as the functional and presentation currency of Nu Holdings.

ii)

Subsidiary’s functional currency

For each subsidiary of the Group, the Company determines the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (“functional currency”). Items included in the financial statements of each subsidiary are measured using that functional currency. The functional currency of the Brazilian operating entities is the Brazilian Real, the Mexican entities is the Mexican Peso, and the Colombian entities is the Colombian Pesos.

iii)

Translation of transactions and balances

Foreign currency transactions and balances are translated in two consecutive stages:

Foreign currency transactions are translated to the subsidiaries’ functional currency companies at the exchange rates at the date of the transactions; and the exchange differences arising on the translation of foreign currency balances to the functional currency are recognized under “Other income (expenses)” in the consolidated statements of profit or loss. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Revenues and expenses are translated using a monthly average exchange rate. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.

The financial statements of the subsidiaries held in functional currencies that are not USD (foreign subsidiaries) are translated into USD, and the exchange differences arising from the translation to USD of the financial statements denominated in functional currencies other than the USD is recognized in the consolidated statements of comprehensive income or loss (OCI) as an item that may be reclassified to profit or loss within “currency translation on foreign entities”.

The main criteria applied to the translation of financial statements of foreign subsidiaries to USD are as follows:

assets and liabilities are converted into USD at the exchange rate at the reporting date;

equity is translated into USD at historical cost;

F-10

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

revenues and expenses are translated using a monthly average exchange rate. When applying this criterion, the Group considers whether there have been significant changes in the exchange rates in the reporting period which, in view of their materiality with respect to the consolidated financial statements taken as a whole, would make it necessary to use the exchange rates at the transaction date rather than the aforementioned average exchange rates; and

statement of cash flow items are translated into USD using the monthly average exchange rate unless significant variances occur, when the rate of the transaction date is used instead.

3. Significant accounting policies

The significant accounting policies adopted by the Group in the preparation of these interim condensed consolidated financial statements are consistent with those adopted and disclosed in the financial statements and each corresponding note for the year ended December 31, 2020 and therefore should be read in conjunction.

The following new or revised standards have been issued by IASB and were effective for the period covered by these interim condensed consolidated financial statements:

Covid-19-Related Rent Concessions (Amendment to IFRS 16)

Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

Definition of Accounting Estimates (Amendments to IAS 8)

New issuance: IAS 32 Financial Instruments: Presentation – Accounting for Warrants that are Initially Classified as Liabilities

The new or revised standards did not have a material impact on these unaudited interim condensed consolidated financial statements.

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Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

4. Significant accounting judgments, estimates and assumptions

Use of estimates and judgments

The preparation of financial statements requires judgments, estimates, and assumptions from management that affect the application of accounting policies, and reported amounts of assets, liabilities, revenues, and expenses. Actual results may diverge from these estimates; and estimates and assumptions are reviewed continuously. Revisions to the estimates are recognized prospectively.

The significant assumptions and estimates used in the preparation of these interim consolidated financial statements for the three-month period ended on March 31, 2021 were the same as those adopted in the consolidated financial statements for the year ended December 31, 2020.

5. Income and related expenses

Interest income and gains (losses) on financial instruments

	Three-month period ended
	3/31/2021		3/31/2020

Interest income – credit card		61,442		69,400
Interest income - lending		29,520		7,563
Interest income – other assets at amortized cost		8,519		9,082
Interest income and gains (losses) on financial instruments at fair value		27,864		45,198
Financial assets at fair value		25,715		43,469
Other		2,149		1,729
Total interest income and gains (losses) on financial instruments		127,345		131,243

The interest income presented above from credit card, lending and other assets at amortized cost represents interest revenue calculated using the effective interest method. Financial assets at fair value comprises interest and the fair value changes on financial assets at fair value.

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Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Fee and commission income

	Three-month period ended
	3/31/2021		3/31/2020

Interchange fees		83,617		61,723
Recharge fees		7,705		1,149
Rewards revenue		6,605		6,535
Late fees		9,651		9,086
Other fee and commission income		10,140		6,419
Total fee and commission income		117,718		84,912

Fee and commission income are presented by fee types that reflect the nature of the services offered by the Group.

Recharge fees comprises the selling price of telecom prepaid credits to customers, net of its acquisition costs.

Interest and other financial expenses

	Three-month period ended
	3/31/2021		3/31/2020

Interest expense on deposits (i)		25,416		26,113
Other interest and similar expenses		6,327		7,117
Interest and other financial expenses		31,743		33,230

(i) Nubank pays interest equivalent to 100% of the Brazilian CDI rate on all deposits from customers with daily maturity, and from 102% to 125% of the Brazilian CDI rate on time deposits from customers.

Transactional expenses

	Three-month period ended
	3/31/2021		3/31/2020

Bank slip costs		9,601		10,054
Rewards expenses		7,724		6,674
Credit and debit card network costs		5,566		6,864
Other transactional expenses		3,458		9,544
Total transactional expenses		26,349		33,136

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Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

6. Credit loss allowance expenses

	Three-month period ended
	3/31/2021			3/31/2020

Credit card receivables		52,148			57,229
Additions (note 11)		113,747			233,490
Reversals (note 11)		(55,731	)		(173,910	)
Recovery		(5,868	)		(2,351	)

Loans to customers		19,146			4,596
Additions (note 12)		28,799			4,689
Reversals (note 12)		(9,605	)		(88	)
Recovery		(48	)		(5	)
Total		71,294			61,825

7. Operating expenses

	Three-month period ended 3/31/2021
	Customer support and operations		General and administrative expenses		Marketing expenses		Other income (expenses)

Infrastructure and data processing costs		11,794		9,522		—		—
Credit analysis and collection costs		5,326		3,651		—		—
Customer services		8,220		1,229		—		—
Salaries and associated benefits		3,983		31,764		819		—
Credit and debit card issuance costs		2,154		3,952		—		—
Share-based compensation (note 8)		—		48,897		—		—
Specialized services expenses		—		7,377		—		—
Other personnel costs		426		2,336		378		—
Depreciation and amortization		124		2,383		—		—
Marketing expenses		—		—		3,670		—
Others		103		4,737		—		16,199
Total		32,130		115,848		4,867		16,199

	Three-month period ended 3/31/2020
	Customer support and operations		General and administrative expenses		Marketing expenses		Other income (expenses)

Infrastructure and data processing costs		17,664		7,912		—		—
Credit analysis and collection costs		3,130		3,834		—		—
Customer services		11,713		1,785		—		—
Salaries and associated benefits		3,617		25,760		570		—
Credit and debit card issuance costs		3,195		7,892		—		—
Share-based compensation (note 8)		—		8,486		—		—
Specialized services expenses		—		3,406		—		—
Other personnel costs		527		3,847		31		—
Depreciation and amortization		—		560		—		—
Marketing expenses		—		—		5,492		—
Others		253		7,142		—		17,649
Total		40,099		70,624		6,093		17,649

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Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

8. Share-based payments

The Group's employee incentives include share settled awards in the form of Stock Options (“SOPs”) and Restricted Stock Units (“RSUs”), offering employees the opportunity to purchase ordinary shares by exercising the options or receiving ordinary shares upon vesting of the RSUs. The cost of the employee services received in respect of the SOPs and RSUs granted is recognized in the statement of profit or loss over the period that employees provide services and according to the vesting conditions. The Group has also issued Awards where it will grant shares upon the achievement of market conditions related to the valuation of the Company. RSU incentive was implemented in 2020 and is expected to be the main incentive going forward.

There were no modifications to the terms and conditions of the SOPs, RSUs and Award after the grant date.

The changes in the number of SOPs and RSUs is as follows:

SOPs	3/31/2021			WAEP (USD)		12/31/2020			WAEP (USD)

Outstanding on January 1		42,515,821			1.58		51,034,938			0.91
Granted during the period/year		1,134,667			23.87		3,376,767			9.92
Exercised during the period/year		(3,075,535	)		1.01		(6,804,750	)		0.24
Forfeited during the period/ year		(321,438	)				(5,091,134	)
Outstanding on March 31 / December 31		40,253,515			2.25		42,515,821			1.58

Exercisable on March 31 / December 31		29,320,847			1.05		30,190,826			0.56

RSUs	3/31/2021			WAGDFV (USD)		12/31/2020			WAGDFV (USD)

Outstanding on January 1		5,294,454			10.47		—
Granted during the period/year		4,764,756			23.87		6,048,335			10.45
Vested during the period/year		(488,760	)		10.50		(430,680	)		10.46
Forfeited during the period/year		(743,554	)				(323,201	)
Outstanding on March 31 / December 31		8,826,896			17.06		5,294,454			10.47

WAEP is weighted average exercise price and WAGDFV is weighted average grant date fair value.

	Three-month period ended
	3/31/2021		3/31/2020

SOP, RSU and Awards granted during the period - equity		34,636		7,111
Total expenses for taxes and social charges, with corresponding increase in liability		8,872		1,321
Total liability provision for taxes and social charges		17,458		1,206

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

9. Cash and cash equivalents

	3/31/2021		12/31/2020
Reverse repurchase agreement in foreign currency		1,225,991		1,783,988
Short-term investments		686,707		389,399
Bank balances		242,888		142,934
Short-term investments in foreign currency		35,381		18,121
Other cash and cash equivalents		9,696		9,338
Total		2,200,663		2,343,780

Cash and cash equivalents are held to meet short-term cash needs. It includes deposits with banks and other short-term highly liquid investments with original maturities of three-months or less and with an immaterial risk of change in value.

The reverse repurchase agreements and short-term investments in foreign currency are mainly in Brazilian Reais, and its average rate of remuneration as of March 31, 2021 and December 31, 2020 is substantially 100% of the Brazilian CDI rate, which is set daily and represents the average rate at which Brazilian banks were willing to borrow/lend to each other for one day.

10. Financial assets at fair value through profit or loss – securities

	3/31/2021										12/31/2020
					Maturities
	Cost		Fair Value		No maturity		Up to 12 months		Over 12 months		Fair Value

Financial treasury bills (LFT) (i)		1,869,031		1,869,416		—		679,212		1,190,204		1,836,139
National treasury bills (LTN) (i)		2,267,003		2,391,447		—		298,535		2,092,912		2,300,676
National treasury notes (NTN) (i)		353		326		—		—		326		408
Bank receipt of deposits (RDB) (ii)		1		1		—		—		1		1
Investment funds (iii)		186,209		95,240		95,240		—		—		150,030
Bill of credit (LC)		21		21		—		—		21		23
Total financial instruments		4,322,618		4,356,451		95,240		977,747		3,283,464		4,287,277

(i)

Includes USD1,316,775 (USD1,534,858 on 12/31/2020) held by the subsidiaries for regulatory purposes, required to be maintained with the Brazilian Central Bank. It also includes Brazilian government securities margins pledged by the Group in transactions on the stock exchange USD99,965 (USD112,412 on 12/31/2020). The LFTs, LTNs and NTNs have an average return of 100% of the Brazilian CDI rate in 2021 (89.5% in 2020) and are classified as Level 1 in the fair value hierarchy, as described on note 23.

(ii)

Refers to RDBs with floating interest rates, classified as Level 2 in the fair value hierarchy, as described on note 23.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

(iii)

Refers to investments in fund quotas that invest mostly in Brazilian sovereign bonds. The fair value of these investments is determined based on the quota value, and these instruments are classified as level 2 in the fair value hierarchy. The assets held by those funds are classified as level 1. Such investments are indexed to the Brazilian CDI rate and had an average return of 86.5% of the Brazilian CDI rate in 2021 (89.5% in 2020).

11. Credit card receivables

Breakdown of receivables

	3/31/2021			12/31/2020
Receivables - current (i)		1,406,056			1,475,417
Receivables - installments (i)		1,394,859			1,443,793
Receivables - revolving (ii)		193,776			199,662
Total receivables		2,994,691			3,118,872

Credit card ECL allowance
Presented as deduction of receivables		(206,878	)		(209,965	)
Presented as liability		(8,564	)		(7,577	)
Total credit card ECL allowance		(215,442	)		(217,542	)
Receivables, net		2,779,249			2,901,330
Total receivables presented as assets		2,787,813			2,908,907

(i)

Current receivables are related to purchases made by customers due on the next credit card billing date. “Receivables – installments” is related to purchases in installments (“parcelado” in Brazil) which are financed by the merchant. Under this product, the cardholder finances a purchase in up to 12 equal monthly installments. The cardholder’s credit limit is initially reduced by the total amount and the installments become due and payable on the cardholder’s subsequent monthly credit card statements. The Group makes the corresponding payments to the credit card network (see note 17) following a similar schedule. As receipts and payments are aligned, the Group does not incur significant financing costs with this product, however it is exposed to the credit risk of the cardholder as it is obliged to make the payments to the credit card network even if the cardholder does not pay. “Receivables – installments” also includes the amounts of credit card bills not fully paid by the customers and that have been converted into payments in installments with a fixed interest rate (“fatura parcelada”).

(ii)

Revolving receivables are amounts due from customers that have not paid in full their credit card bill. Customers may request to convert these receivables to loans to be paid in installments. In accordance with Brazilian regulation, revolving balances that are outstanding for more than 2 months have to be mandatorily converted into “fatura parcelada” - a type of installment loan which is settled through the customer’s monthly credit card bills.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Breakdown by maturity

	3/31/2021					12/31/2020
	Amount		%			Amount		%
In arrears		158,607		5	%		30,554		1	%
<= 30 days		1,413,596		47	%		1,534,759		49	%
30 < 60 days		506,974		17	%		578,941		19	%
> 60 days		915,514		31	%		974,618		31	%
Total		2,994,691		100	%		3,118,872		100	%

Credit loss allowance - by stages and stage 2 triggers

As of March 31, 2021, the provision for credit losses totaled USD215,442 (USD217,542 in December 2020). The provision is provided by a model estimation, consistently applied, which is sensitive to the methods, assumptions, and risk parameters underlying its calculation.

The amount that the provision for losses represents in comparison to the Group’s gross receivables coverage ratio is also monitored, in order to anticipate trends that could indicate credit risk increases. This metric is considered a key risk indicator. It is monitored according to the Group's RAS - Risk Appetite Statement, supporting the decision-making process and being discussed in the primary credit forums along with the Group.

Distribution within the stages as of March 31, 2021 showed a greater concentration in stage 2 portfolio when compared to December 31, 2020, indicating a risk normalization after the risk decrease observed in 2020 (see note 11 f) about COVID impacts) with the majority of the Group’s credit card portfolio being classified as stage 1, followed by stages 2 and 3, respectively.

	3/31/2021
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Stage 1		2,656,524		88.7	%		82,719		38.4	%		3.1	%

Stage 2		249,322		8.3	%		79,132		36.7	%		31.7	%
Absolute Trigger (Days Late)		75,110		30.1	%		35,280		44.6	%		47.0	%
Relative Trigger (PD deterioration)		174,212		69.9	%		43,852		55.4	%		25.2	%

Stage 3		88,845		3.0	%		53,591		24.9	%		60.3	%
Total		2,994,691		100	%		215,442		100	%		7.2	%

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Stage 1		2,799,999		89.8	%		79,296		36.5	%		2.8	%

Stage 2		202,673		6.5	%		60,391		27.8	%		29.8	%
Absolute Trigger (Days Late)		50,375		24.9	%		22,172		36.7	%		44.0	%
Relative Trigger (PD deterioration)		152,298		75.1	%		38,219		63.3	%		25.1	%

Stage 3		116,200		3.7	%		77,855	35.7		%		67.0	%
Total		3,118,872		100	%		217,542		100	%		7.0	%

As of March 31, 2021 and December 31, 2020, most of the stage 2 exposure arose from contracts that had a significant increase in their PDs. Stage 2 exposure concentration as a result of the Absolute Trigger (days late) is higher on March 31, 2021 compared with December 31, 2020, following the movements of risk observed in the portfolio as described in note 11-f) Credit loss allowance - COVID-19 impacts.

Credit loss allowance - by credit quality vs. stages

	3/31/2021
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Strong (PD < 5%)		2,168,691		72.4	%		27,519		12.8	%		1.3	%
Stage 1		2,168,401		100.0	%		27,500		99.9	%		1.3	%
Stage 2		290		0.0	%		19		0.1	%		6.6	%

Satisfactory (5% <= PD <= 20%)		515,513		17.2	%		50,820		23.6	%		9.9	%
Stage 1		438,332		85.0	%		40,434		79.6	%		9.2	%
Stage 2		77,181		15.0	%		10,386		20.4	%		13.5	%

Higher Risk (PD > 20%)		310,487		10.4	%		137,103		63.6	%		44.2	%
Stage 1		49,791		16.0	%		14,785		10.8	%		29.7	%
Stage 2		171,851		55.4	%		68,727		50.1	%		40.0	%
Stage 3		88,845		28.6	%		53,591		39.1	%		60.3	%
Total		2,994,691		100.0	%		215,442		100.0	%		7.2	%

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Strong (PD < 5%)		2,524,909		81.0	%		40,629		18.7	%		1.6	%
Stage 1		2,523,792		100.0	%		40,540		99.8	%		1.6	%
Stage 2		1,117		0.0	%		89		0.2	%		8.0	%

Satisfactory (5% <= PD <= 20%)		320,492		10.3	%		39,089		18.0	%		12.2	%
Stage 1		244,979		76.4	%		28,645		73.3	%		11.7	%
Stage 2		75,513		23.6	%		10,444		26.7	%		13.8	%

Higher Risk (PD > 20%)		273,471		8.7	%		137,824		63.3	%		50.4	%
Stage 1		31,228		11.4	%		10,111		7.3	%		32.4	%
Stage 2		126,043		46.1	%		49,858		36.2	%		39.6	%
Stage 3		116,200		42.5	%		77,855		56.5	%		67.0	%
Total		3,118,872		100	%		217,542		100	%		7.0	%

F-19

Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

There is a significant concentration of receivables at stage 1 based on credit quality. Receivables with satisfactory risk are distributed between stages 1 and 2, mostly at stage 1.

Defaulted assets (stage 3) are classified as higher risk, which also accounts for a large proportion of stage 2 exposure. Stage 1 receivables classified as higher risk are those customers with low credit risk scores.

Coverage ratios for most of risk and stage classification are lower on March 31, 2021 when compared with December 31, 2020.

Credit loss allowance - changes

The following tables show reconciliations from the opening to the closing balance of the provision for credit losses by the stages of the financial instruments.

	3/31/2021
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		79,296			60,391			77,855			217,542
Transfers from Stage 1 to Stage 2		(9,812	)		9,812			—			—
Transfers from Stage 2 to Stage 1		11,688			(11,688	)		—			—
Transfers to Stage 3		(595	)		(14,462	)		15,057			—
Transfers from Stage 3		60			96			(156	)		—
Write-offs		—			—			(43,248	)		(43,248	)
Net increase of loss allowance		8,251			40,240			9,525			58,016
Effect of changes in exchange rates (OCI)		(6,169	)		(5,257	)		(5,442	)		(16,868	)
Loss allowance at end of the period		82,719			79,132			53,591			215,442

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		68,437			75,531			79,929			223,897
Transfers from Stage 1 to Stage 2		(4,252	)		4,252			—			—
Transfers from Stage 2 to Stage 1		27,974			(27,974	)		—			—
Transfers to Stage 3		(3,929	)		(11,252	)		15,181			—
Transfers from Stage 3		246			129			(375	)		—
Write-offs		—			—			(116,856	)		(116,856	)
Net increase of loss allowance		6,154			36,643			117,973			160,770
Effect of changes in exchange rates (OCI)		(15,334	)		(16,938	)		(17,997	)		(50,269	)
Loss allowance at end of the year		79,296			60,391			77,855			217,542

The following table presents changes in the gross carrying amount of the credit card portfolio to help explain their effects to the changes in the loss allowance for the same portfolio as discussed above. “Net increase of gross carrying amount” includes acquisitions, payments, and interest accruals.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	3/31/2021
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		2,799,999			202,673			116,200			3,118,872
Transfers from Stage 1 to Stage 2		(115,955	)		115,955			—			—
Transfers from Stage 2 to Stage 1		51,848			(51,848	)		—			—
Transfers to Stage 3		(2,403	)		(28,789	)		31,192			—
Transfers from Stage 3		56			80			(136	)		—
Write-offs		—			—			(43,248	)		(43,248	)
Net change of gross carrying amount		139,280			28,539			(6,763	)		161,056
Effect of changes in exchange rates (OCI)		(216,301	)		(17,288	)		(8,400	)		(241,989	)
Gross carrying amount at end of the period		2,656,524			249,322			88,845			2,994,691

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		2,484,556			389,734			136,131			3,010,421
Transfers from Stage 1 to Stage 2		(79,734	)		79,734			—			—
Transfers from Stage 2 to Stage 1		162,232			(162,232	)		—			—
Transfers to Stage 3		(43,582	)		(49,951	)		93,533			—
Transfers from Stage 3		435			226			(661	)		—
Write-offs		—			—			(116,856	)		(116,856	)
Net change of gross carrying amount		839,461			31,990			34,640			906,091
Effect of changes in exchange rates (OCI)		(563,369	)		(86,828	)		(30,587	)		(680,784	)
Gross carrying amount at end of the year		2,799,999			202,673			116,200			3,118,872

Credit loss allowance – COVID-19 impacts

Throughout the year of 2020, the government responses to the COVID-19 pandemic, such as the emergencies aid, changed the portfolio credit behavior, causing a reduction in delinquency and improvement in other risk indicators.

However, in the three-month period ended March 31,2021, Brazil experienced a worsening of the pandemic crisis, which led to the imposition of new restriction measures, in parallel the government ceased the "Emergencies Aid" program in January. As a consequence, the portfolio has shown again signs of risk deterioration, although the risk levels continue to be below what was observed before the COVID-19 crisis, leading to a concentration of 73.1% of the portfolio classified as strong (PD < 5%) segment as of March 31, 2021 compared with 81% on December 31, 2020.

As there is a significant uncertainty about the Group’s risk indicators trends and the improvement observed in the three-month period ended March 31, 2021, a post-model adjustment continues to be applied in the amount of USD40,580 (USD 48,809 as of December 31, 2020), primarily as a result of lower probability of default compared to the December 31, 2020.

The Group continues to monitor the crisis and the government responses to the crisis and its effects on changes in Nubank’s customer behavior.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

12. Loans to customers

Breakdown of receivables

	3/31/2021			12/31/2020
Lending to individuals		303,897			200,904
Loan ECL allowance		(39,355	)		(26,210	)
Total		264,542			174,694

Breakdown by maturity

The following table shows loans to customers by maturity on March 31, 2021 and December 31, 2020.

	3/31/2021
	Overdue		%			Less than 1 year		%			Between 1 and 5 years		%			Total		%

Installment loans to individuals		8,735		3	%		259,510		85	%		35,652		12	%		303,897		100	%
Total		8,735		3	%		259,510		85	%		35,652		12	%		303,897		100	%

Of which:		8,735		3	%		259,510		85	%		35,652		12	%		303,897		100	%
Fixed interest rate		8,735		3	%		259,510		85	%		35,652		12	%		303,897		100	%

	12/31/2020
	Overdue		%			Less than 1 year		%			Between 1 and 5 years		%			Total		%

Installment loans to individuals		7,369		3	%		170,077		85	%		23,458		12	%		200,904		100	%
Total		7,369		3	%		170,077		85	%		23,458		12	%		200,904		100	%

Of which:		7,369		3	%		170,077		85	%		23,458		12	%		200,904		100	%
Fixed interest rate		7,369		3	%		170,077		85	%		23,458		12	%		200,904		100	%

Credit loss allowance - by stages and stage 2 triggers

The tables below show the credit loss allowance by stages as of March 31, 2021 and December 31, 2020.

	3/31/2021
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Stage 1		254,419		83.7	%		16,486		41.9	%		6.5	%

Stage 2		38,673		12.7	%		13,252		33.7	%		34.3	%
Absolute Trigger (Days Late)		8,148		21.1	%		6,133		46.3	%		75.3	%
Relative Trigger (PD deterioration)		30,525		78.9	%		7,119		53.7	%		23.3	%

Stage 3		10,805		3.6	%		9,617		24.4	%		89.0	%
Total		303,897		100.0	%		39,355		100.0	%		13.0	%

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Stage 1		168,744		84.0	%		10,532		40.2	%		6.2	%

Stage 2		22,634		11.3	%		7,136		27.2	%		31.5	%
Absolute Trigger (Days Late)		3,819		16.9	%		2,873		40.3	%		75.2	%
Relative Trigger (PD deterioration)		18,815		83.1	%		4,263		59.7	%		22.7	%

Stage 3		9,526		4.7	%		8,542		32.6	%		89.7	%
Total		200,904		100.0	%		26,210		100.0	%		13.0	%

Credit loss allowance - by credit quality vs stages

	3/31/2021
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Strong (PD < 5%)		100,217		33.0	%		1,420		3.6	%		1.4	%
Stage 1		100,037		99.8	%		1,411		99.4	%		1.4	%
Stage 2		180		0.2	%		9		0.6	%		5.0	%

Satisfactory (5% <= PD <= 20%)		148,266		48.8	%		12,764		32.4	%		8.6	%
Stage 1		144,010		97.1	%		12,355		96.8	%		8.6	%
Stage 2		4,256		2.9	%		409		3.2	%		9.6	%

Higher Risk (PD > 20%)		55,414		18.2	%		25,171		64.0	%		45.4	%
Stage 1		10,372		18.7	%		2,720		10.8	%		26.2	%
Stage 2		34,237		61.8	%		12,834		51.0	%		37.5	%
Stage 3		10,805		19.5	%		9,617		38.2	%		89.0	%
Total		303,897		100.0	%		39,355		100.0	%		13.0	%

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Strong (PD < 5%)		66,754		33.2	%		947		3.6	%		1.4	%
Stage 1		66,607		99.8	%		939		99.2	%		1.4	%
Stage 2		147		0.2	%		8		0.8	%		5.4	%

Satisfactory (5% <= PD <= 20%)		99,909		49.7	%		8,416		32.1	%		8.4	%
Stage 1		97,421		97.5	%		8,175		97.1	%		8.4	%
Stage 2		2,488		2.5	%		241		2.9	%		9.7	%

Higher Risk (PD > 20%)		34,241		17.1	%		16,847		64.3	%		49.2	%
Stage 1		4,716		13.8	%		1,418		8.4	%		30.1	%
Stage 2		19,998		58.4	%		6,888		40.9	%		34.4	%
Stage 3		9,527		27.8	%		8,541		50.7	%		89.7	%
Total		200,904		100.0	%		26,210		100.0	%		13.0	%

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Credit loss allowance - changes

The following tables show reconciliations from the opening to the closing balance of the provision for credit losses by the stages of the financial instruments. The explanation of each stage and the basis for determining transfers due to changes in credit risk is set out in the Company’s accounting policies, as disclosed in the annual consolidated financial statements as of December 31,2020.

	3/31/2021
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		10,532			7,136			8,542			26,210
Transfers from Stage 1 to Stage 2		(1,639	)		1,639			—			—
Transfers from Stage 2 to Stage 1		986			(986	)		—			—
Transfers to Stage 3		(360	)		(3,336	)		3,696			—
Transfers from Stage 3		2			74			(76	)		—
Write-offs		—			—			(3,614	)		(3,614	)
Net increase of loss allowance		7,961			9,456			1,777			19,194
Effect of changes in exchange rates (OCI)		(996	)		(731	)		(708	)		(2,435	)
Loss allowance at end of the period		16,486			13,252			9,617			39,355

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		1,300			2,072			1,618			4,990
Transfers from Stage 1 to Stage 2		(54	)		54			—			—
Transfers from Stage 2 to Stage 1		346			(346	)		—			—
Transfers to Stage 3		(164	)		(176	)		340			—
Transfers from Stage 3		—			6			(6	)		—
Write-offs		—			—			(4,525	)		(4,525	)
Net increase of loss allowance		9,462			6,030			11,528			27,020
Effect of changes in exchange rates (OCI)		(358	)		(504	)		(413	)		(1,275	)
Loss allowance at end of the year		10,532			7,136			8,542			26,210

The following table further explains changes in the gross carrying amount of the loan portfolio to help explain their significance to the changes in the loss allowance for the same portfolio as discussed above. “Net increase of gross carrying amount” includes the principal issuances net of payments or interest recognized net of payment.

	3/31/2021
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		168,744			22,634			9,526			200,904
Transfers from Stage 1 to Stage 2		(20,794	)		20,794			—			—
Transfers from Stage 2 to Stage 1		5,486			(5,486	)		—			—
Transfers to Stage 3		(747	)		(4,710	)		5,457			—
Transfers from Stage 3		3			84			(87	)		—
Write-offs		—			—			(3,614	)		(3,614	)
Net increase of gross carrying amount		117,427			7,586			313			125,326
Effect of changes in exchange rates (OCI)		(15,700	)		(2,229	)		(790	)		(18,719	)
Gross carrying amount at end of the period		254,419			38,673			10,805			303,897

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		44,513			16,335			2,166			63,014
Transfers from Stage 1 to Stage 2		(1,951	)		1,951			—			—
Transfers from Stage 2 to Stage 1		2,621			(2,621	)		—			—
Transfers to Stage 3		(2,997	)		(1,314	)		4,311			—
Transfers from Stage 3		—			8			(8	)		—
Write-offs		—			—			(4,525	)		(4,525	)
Net increase of gross carrying amount		137,483			12,013			8,123			157,619
Effect of changes in exchange rates (OCI)		(10,925	)		(3,738	)		(541	)		(15,204	)
Gross carrying amount at end of the year		168,744			22,634			9,526			200,904

Credit loss allowance – COVID-19 impacts

In the course of 2020, the actions taken by the government, emergencies aid and social distance measures, changed credit behavior, culminating in a risk reduction, being captured by the Group’s models.

Meanwhile, the first quarter of 2021 presented a worsening of the crisis, which led to new measures of social distance, along with this, the government ended emergency aid in January and a worsening of macroeconomic expectations. Despite this, the portfolio's risk indicators have not changed significantly and are still below that recorded in the pre-crisis period. Within this context, the coverage ratio on December 31, 2020 was 13.0% and on March 31, 2021, 13%. Origination continues to grow at an accelerated pace with the gross carrying amount increasing by 64% in the same period.

In addition, restructurings, in the form of loan extensions, have also increased, all classified as stage 2, contributing to an increase in the gross carrying amount at that stage on March 31, 2021 when compared to December 31, 2020.

The Group made a post-model adjustment due to the same reasons as the loss allowances for credit card receivables in the amount of USD3,515 (USD2,307 as of December 31, 2020), mainly due to the growth on the gross carrying amount. The post-model effect contributes to the increase in the coverage ratios observed for each risk segment.

The Group continues to monitor the crisis and the government responses and its effects on changes in Nubank’s personal loan customer behavior.

13. Other assets

	3/31/2021		12/31/2020

Taxes recoverable		28,986		31,702
Deferred expenses (i)		36,419		24,953
Judicial deposits (note 19)		15,142		16,440
Advances to suppliers and employees		8,330		10,192
Prepaid expenses		9,079		8,301
Other assets		35,048		31,907
Total		133,004		123,495

(i)

Refers to credit card issuance costs, that includes printing, packing, and shipping costs, among others. The expenses are amortized based on the card’s life, adjusted for any cancelations.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

14. Derivative financial instruments

The Group executes transactions with derivative financial instruments, which are intended to meet its own needs in order to reduce its exposure to market, currency and interest risks. The derivatives are classified as at fair value through profit or loss, except the ones on cash flow hedge accounting strategies, for which the effective portion of gains or losses on derivatives is recognized directly in other comprehensive income. The management of these risks is conducted through determining limits, and the establishment of operating strategies. The derivative contracts are considered level 1 or 2 in the fair value hierarchy and are used to hedge exposures, but hedge accounting is adopted only for forecast transactions.

	3/31/2021
	Notional		Fair values
	amount		Assets		Liabilities
Derivatives classified as fair value through profit or loss
Interest rate contracts - Future		3,195,634		34		(1,835	)
Currency exchange rate contracts - Future		59,199		—		(1,212	)
Interest rate contracts - Swap		9,425		—		(14	)

Derivatives held for hedging
Designated as cash flow hedges
Exchange rate contracts - Future		35,460		—		(680	)
Embedded derivatives in convertible instruments (note 21)						(58,475	)
Total		3,299,718		34		(62,216	)

	12/31/2020
	Notional		Fair values
	amount		Assets		Liabilities
Derivatives classified as fair value through profit or loss
Interest rate contracts - Future		2,964,368		5		(2,421	)
Currency exchange rate contracts - Future		65,961		27		(217	)
Interest rate contracts - Swap		10,214		48		—

Derivatives held for hedging
Designated as cash flow hedges
Exchange rate contracts - Future		44,140		—		(145	)
Embedded derivatives in convertible instruments (note 21)						(72,521	)
Total		3,084,683		80		(75,304	)

Futures contracts are traded on the Brazilian stock exchange (B3 S.A. - Brasil, Bolsa, Balcão or “B3”), with B3 itself as a counterparty and daily settlement.

Swap contracts are settled on a daily basis and are traded over the counter with financial institutions as counterparties. The total value of margins pledged by the Group in transactions on the stock exchange is exhibited in note 10.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

The table below shows the breakdown by maturity of the notional amounts:

	3/31/2021
	Up to 3 months		3 to 12 months		Over 12 months		Total

Assets
Interest rate contracts - Future		355,605		84,677		2,125		442,407
Exchange rate contracts - Future		94,659		—		—		94,659
Total assets		450,264		84,677		2,125		537,066

Liabilities
Interest rate contracts - Future		265,311		329,850		2,158,066		2,753,227
Interest rate contracts - Swap		—		—		9,425		9,425
Total liabilities		265,311		329,850		2,167,491		2,762,652
Total		715,575		414,527		2,169,616		3,299,718

	12/31/2020
	Up to 3 months		3 to 12 months		Over 12 months		Total

Assets
Interest rate contracts - Future		368,048		143,381		3,488		514,917
Exchange rate contracts - Future		110,101		—		—		110,101
Total assets		478,149		143,381		3,488		625,018

Liabilities
Interest rate contracts - Future		39,393		242,931		2,167,127		2,449,451
Interest rate contracts - Swap		—		—		10,214		10,214
Total liabilities		39,393		242,931		2,177,341		2,459,665
Total		517,542		386,312		2,180,829		3,084,683

Analysis of derivatives designated as hedges

Hedges of foreign currency risk

The Group is exposed to foreign currency risk on forecast transactions expenses, primarily related to the cloud infrastructure and certain software licenses used by Nubank. The Group managed its exposures to the variability in cash flows of foreign currency forecast transactions to movements in foreign exchange rates by entering into foreign exchange contracts (exchange futures). These instruments are entered into to match the cash flow profile of the estimated forecast transaction. They are exchange traded and settled on a daily basis.

The Group applies hedge accounting to the forecast transactions related to its main cloud infrastructure contract. The effectiveness is assessed monthly by analyzing the critical terms. The critical terms of the hedging instrument and the amount of the forecasted hedged transactions are significantly the same. Derivatives are generally rolled over monthly. They are expected to occur in the same fiscal month as the maturity date of the hedging instrument. Therefore, the hedge is expected to be effective. Subsequent assessments of effectiveness are performed by verifying and documenting whether the critical terms of the hedging instrument and forecasted hedged transaction have changed during the period in review and

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

whether it remains probable. If there are no such changes in critical terms, the Group will continue to conclude that the hedging relationship is effective.

Sources of ineffectiveness are differences in the amount and timing of forecast and actual payment of expenses.

	3/31/2021			12/31/2020


Balance at beginning of the period/year		49			1
Fair value change recognized in OCI during the period/year		2,733			8,302
Total amount reclassified from cash flow hedge reserve to income statement during the period/year		(70	)		(8,223	)
to "Customer support and operation"		(37	)		(5,480	)
to "General and administrative expenses"		(37	)		(4,925	)
Effect of changes in exchange rates (OCI)		4			2,182
Deferred income taxes		(1,059	)		(31	)
Balance at end of the period / year		1,653			49

The material future transactions that are the subject of the hedge are:

	3/31/2021						12/31/2020
	Up to 3 months		3 to 12 months		Total		Total

Expected foreign currency transactions		15,267		28,464		43,731		46,399
Total		15,267		28,464		43,731		46,399

15. Instruments eligible as capital

	3/31/2021		12/31/2020
Financial liabilities at fair value through profit or loss
Instruments eligible as capital		13,063		15,492
Total		13,063		15,492

In June 2019, the subsidiary Nu Financeira issued a subordinated financial letter in the amount equivalent to USD18,824, which was approved as Tier 2 capital by the Brazilian Central Bank in September 2019. The note bears a fixed interest rate of 12.8% matures in 2029 and is callable in 2024.

The Group designated the instruments eligible as capital as fair value through profit or loss at its initial recognition. The losses of fair value changes arising from its own credit risk in the amount of USD374 were recorded in other comprehensive income (gains of USD199 in the three-month period ended March 31, 2020). All other fair value changes and interests in the amount of USD1,278 (USD1,572 in the three-month period ended March 31, 2020) were recognized in profit or loss. The Group used derivatives contracts to hedge the exposure to the fixed interest rate.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	3/31/2021			12/31/2020
Balance at beginning of the year		15,492			22,084
Interest accrued		487			1,689
Fair value changes		(1,765	)		(3,673	)
Own credit transferred to OCI		374			219
Effect of changes in exchange rates (OCI)		(1,525	)		(4,827	)
Balance at end of the period/year		13,063			15,492

16. Financial liabilities at amortized cost – deposits

	3/31/2021		12/31/2020

Deposits by customers (i)
Deposits in electronic money ("Conta do Nubank")		1,023,804		1,029,284
Bank receipt of deposits (RDB)		4,348,876		4,445,705
Bank receipt of deposits (RDB-V)		70,836		90,360
Time deposit (ii)		18,136		19,513
Total		5,461,652		5,584,862

(i)

In June 2019, Nu Financeira's Bank Receipt of Deposits (“RDB”) was launched as an investment option in “Conta do Nubank”. Different from the deposits in electronic money, Nubank can use the resources from RDB’s deposits in other operations and as funding for the lending and credit card operations. RDB’s deposits have a special guarantee from the Brazilian Deposit Guarantee Fund (“FGC”). Deposits in electronic money through “Conta do Nubank" and part of the RDBs correspond to customer deposits on-demand with daily maturity made in the prepaid account, bearing interest equivalent to 100% of the Brazilian CDI rate, denominated in Brazilian Reais. In November 2019, Nu Financeira launched another type of RDB, the Linked Bank Receipt of Deposit (“RDB-V”), which has the same remuneration characteristics and daily liquidity as RDB.

In September 2020, Nu Financeira launched a new investment option – a RDB with scheduled redemption. Such modality differs from the common RDB, as it has redemption terms from 3 to 36 months and remuneration between 102% and 112% (102% and 126% in December, 31 2020) of the Brazilian CDI rate.

(ii)

In July 2020, the subsidiary Nu Financeira issued a time deposit instrument (“DPGE”), also with a special guarantee from FGC, in the amount of R$ 100 million (equivalent to USD 19 million), remunerated at the Brazilian DI rate + 1% per annum. with maturity on July 7, 2022.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Breakdown

	3/31/2021
	Up to 12 months		Over 12 months		Total
.
Deposits by customers		5,402,654		40,862		5,443,516
Deposits in electronic money ("Conta do Nubank")		1,023,804		—		1,023,804
Bank receipt of deposits (RDB)		4,308,014		40,862		4,348,876
Bank receipt of deposits (RDB-V)		70,836		—		70,836
Time deposit		—		18,136		18,136
Total		5,402,654		58,998		5,461,652

	12/31/2020
	Up to 12 months		Over 12 months		Total

Deposits by customers		5,535,536		29,813		5,565,349
Deposits in electronic money ("Conta do Nubank")		1,029,284				1,029,284
Bank receipt of deposits (RDB)		4,415,892		29,813		4,445,705
Bank receipt of deposits (RDB-V)		90,360		—		90,360
Time deposit		—		19,513		19,513
Total		5,535,536		49,326		5,584,862

17. Financial liabilities at amortized cost – payables to credit card network

	3/31/2021		12/31/2020

Payables to credit card network
Payables to credit card network (i)		2,956,438		3,329,879
Payables to clearing houses		26,109		1,379
Total		2,982,547		3,331,258

(i)

Corresponds to the amount payable to Mastercard brand related to credit card transactions. This amount is settled according to the transaction installments, substantially in up to 27 days for Brazilian transactions with no installments and 1 business day for international transactions. Sales in installments (“parcelado”) have monthly settlements over a period of up to 12 months. For Mexican and Colombian operation, the amounts are settled in 1 business day. The segregation of the settlement is shown in the table below:

Payables to credit card network	3/31/2021		12/31/2020

Up to 30 days		1,429,446		1,703,826
30 to 90 days		704,976		885,367
More than 90 days		822,016		740,686
Total		2,956,438		3,329,879

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Table of Contents

Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Collateral for credit card

As of March 31, 2021, the Group had USD49,092 (USD90,761 on December 31, 2020) of security deposits granted in favor of Mastercard. These securities are measured at fair value through profit and loss and are held as collateral for the amounts payable to the network and can be replaced by other securities with similar characteristics. The average remuneration rate of those deposits was 0.20% per month on March 31, 2021 (0.34% on December 31, 2020).

18. Financial liabilities at amortized cost – borrowing, financing and securitized borrowings

	3/31/2021		12/31/2020

Borrowings and financings		103,220		97,454
Securitized borrowings		57,681		79,742
Total		160,901		177,196

Borrowings and financings

Borrowings and financings balances are as follows:

	3/31/2021
	Up to 3 months		3 to 12 months		Over 12 months		Total
Borrowings and financings
Financial letter (i)		55,793		—		—		55,793
Bills of exchange (ii)		1,081		7,630		2,530		11,241
Term loan credit facility (iii)		—		457		35,729		36,186
Total borrowings and financings		56,874		8,087		38,259		103,220

	12/31/2020
	Up to 3 months		3 to 12 months		Over 12 months		Total
Borrowings and financings
Financial letter (i)		—		60,126		—		60,126
Bills of exchange (ii)		5,620		1,588		10,476		17,684
Term loan credit facility (iii)		—		254		19,389		19,644
Total borrowings and financings		5,620		61,968		29,865		97,454

(i)

In June 2019, the Group issued a floating interest rate note in R$ in the amount equivalent to USD76 million on that date, with maturity in June 2021 and an average interest rate of 116% of the Brazilian CDI rate.

(ii)

Corresponds to fixed and floating rate bills of exchange in the amount equivalent to USD22 million on the issuance date, with maturity dates between March 2021 and April 2022 and interest on floating rates as of March 31, 2021 between 115% and 118% (113% and 119% as of December 31,2020) of the Brazilian CDI and between 8.35% and 9.09% for the fixed rate bills as of March 31, 2020 and December 31,2020.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

(iii)

Corresponds to three term loan credit facilities obtained by the subsidiary Nu Servicios, in Mexican pesos, from:

Bank of America México, S.A., Institución de Banca Múltiple and (“BofA”) in MXN in the amount equivalent to USD10 million on the issuance date, with interest equivalent to 6% per annum (Mexican Interbanking Equilibrium Interest Rate (“TIIE”) + 1.45%) and maturity dates between January 2021 and July 2023.

JPMorgan México in MXN in the amount equivalent to USD10 million on the issuance date, with interest equivalent to 6% per annum (TIIE + 1.45%). The maturity dates are between July 2021 and December 2023.

Goldman Sachs in MXN with the equivalent amount on the issuance date of USD15 million, with interest equivalent to 6% per annum (TIIE + 1.18%) and maturity date in January 2024.

Changes to borrowings and financings are as follows:

	3/31/2021
	Financial letter			Bills of exchange			Term loan credit facility			Total

Balance at beginning of the year		60,126			17,684			19,644			97,454
New borrowings		—			—			16,568			16,568
Payments – principal		—			(4,729	)		—			(4,729	)
Payments – interest		—			(459	)		(210	)		(669	)
Interest accrued		310			120			416			846
Effect of changes in exchange rates (OCI)		(4,643	)		(1,375	)		(232	)		(6,250	)
Balance at end of the period		55,793			11,241			36,186			103,220

	12/31/2020
	Financial letter			Bank credit bill			Bills of exchange			Term loan credit facility		Total

Balance at beginning of the year		77,061			34,183			22,157			—		133,401
New borrowings		—			—			—			17,974		17,974
Payments – principal		(1,508	)		(26,148	)		(237	)		—		(27,893	)
Payments – interest		(45	)		(1,279	)		(24	)		—		(1,348	)
Interest accrued		1,936			743			770			236		3,685
Effect of changes in exchange rates (OCI)		(17,318	)		(7,499	)		(4,982	)		1,434		(28,365	)
Balance at end of the year		60,126			—			17,684			19,644		97,454

Guarantees

The Company, together with its subsidiary Nu Pagamentos, are guarantors to the abovementioned loan agreements between BofA, JP Morgan and Goldman Sachs. The total amount of the guarantees is USD45,000.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Securitized borrowings

Securitized borrowings balances are as follows:

	3/31/2021
	Until 3 months		3-12 months		Total
Securitized borrowings
2nd series		1,118		2,235		3,353
3rd series		14,818		39,510		54,328
Total securitized borrowings		15,936		41,745		57,681

	12/31/2020
	Until 3 months		3-12 months		Over 12 months		Total
Securitized borrowings
2nd series		1,214		3,623		—		4,837
3rd series		16,128		48,091		10,686		74,904
Total securitized borrowings		17,342		51,714		10,686		79,742

Securitized borrowings correspond to senior notes issued by FIDC Nu, with maturity dates until February 2022 and interest rates of Brazilian CDI +4% for 2^nd series and CDI + 1.1% for 3^rd series. Senior notes of 1^st series were fully settled in 2020. The subsidiary Nu Pagamentos is the quota holder of the subordinated notes. The underlying assets of the FIDC correspond to credit card receivables.

As of March 31, 2021, FIDC Nu has receivables in the amount equivalent to USD39,813 (USD56,989 on December 31, 2020). These assets are not available for transfer to settle liabilities in other entities of the Group.

Changes to securitized borrowings are as follows:

	3/31/2021			12/31/2020
Balance at beginning of the year	79,742			169,925
Interest accrued		512			4,633
Payments – principal		(15,873	)		(52,171	)
Payments – interest		(513	)		(4,819	)
Effect of changes in exchange rates (OCI)		(6,188	)		(37,826	)
Balance at end of the period/year		57,680			79,742

19. Provision for lawsuits and administrative proceedings

	3/31/2021		12/31/2020

Tax risks		14,760		15,995
Civil risks		773		470
Labor risks		4		4
Total		15,537		16,469

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

The Company and its subsidiaries are parties to lawsuits and administrative proceedings arising from the ordinary course of operations, involving tax, civil and labor aspects. Such matters are being discussed at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these matters are estimated and periodically adjusted by Management, supported by external legal advisors’ opinion. There is significant uncertainty relating to the timing of any outflow for civil and labor risk.

Provision

Civil lawsuits are mainly related to credit card operations. Based on Management’s assessment and the opinion of the Nubank’s external legal advisors, the Group has a provision in the amount of USD773 (USD470 on December 31, 2020) considered sufficient to cover estimated losses from civil suits.

Regarding tax risks, a provision in the amount of USD14,760 (USD15,995 on December 31, 2020) was recorded as a legal obligation related to the increase in the contribution of certain Brazilian taxes (PIS and COFINS). The Group has a judicial deposit in the amount related to this claim, as shown below in item d). In July 2019, Nubank withdraw the lawsuit and is currently awaiting the judicial deposits’ release to the Brazilian Tax Authorities, which is expected to occur in up to two years.

Changes

	3/31/2021
	Tax			Civil			Labor

Balance at beginning of the year		15,995			470			4
Additions		—			490			—
Payments / Reversals		—			(152	)		—
Effect of changes in exchange rates (OCI)		(1,235	)		(35	)		—
Balance at end of the period		14,760			773			4

	12/31/2020
	Tax			Civil			Labor

Balance at beginning of the year		20,631			300			21
Additions		—			1,472			2
Payments / Reversals		—			(1,234	)		(13	)
Effect of changes in exchange rates (OCI)		(4,636	)		(68	)		(6	)
Balance at end of the year		15,995			470			4

Contingencies

The Group is a party to civil and labor lawsuits, involving risks classified by Management and the legal advisors as possible losses, totaling approximately USD3,863 and USD283, respectively (USD4,054 and USD242 on December 31, 2020). Based on Management’s assessment and the opinion of the Group’s external legal advisors, no provision was recognized for those lawsuits.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Judicial deposits

As of March 31, 2021, the total amount of judicial deposits shown as “Other assets” (note 13) is USD15,142 (USD16,440 on December 31, 2020) and is substantially related to the tax proceeding.

20. Deferred income

	3/31/2021		12/31/2020
Deferred revenue from points		19,559		19,256
Deferred annual fee		5,857		5,773
Other deferred income		858		936
Total		26,274		25,965

Deferred revenue from points and deferred annual fee are related to the Group’s reward program for its credit card customers, called "Nubank Rewards".

21. Senior preferred shares

	3/31/2021			12/31/2020

Balance at beginning of the period/year		400,915			—
New issuances		—			300,000
Deferred expenses		10			(236	)
Expenses with convertible instruments		—			101,151
Interest accrued		14,047			28,630
Changes in the fair value of the embedded derivative conversion feature		(14,047	)		72,521
Balance at end of the period/year		400,925			400,915
Host debt instrument at amortized cost		342,450			328,394
Embedded derivative at fair value		58,475			72,521

The table above should be read in conjunction with note 22 disclosed in the consolidated financial statements for the year ended December 31, 2020.

22. Related parties

Related parties are shareholders with significant interest, companies linked to them, including their managers and board members, key management members and their relatives.

In the ordinary business course, the Group may have issued credit cards or loans to Nubank’s executive officers, directors, and shareholders. Those transactions, as well as the deposits, occur on similar terms as those prevailing at the time for comparable transactions to unrelated persons and do not involve more than the normal risk of collectability.

As described in note 3 Basis for consolidation disclosed in the consolidated financial statements for the year ended December 31, 2020, all subsidiaries are consolidated in these financial statements. Therefore, related party balances and transactions, and any unrealized income and expenses arising from related party transactions, are all eliminated in the consolidated financial statements.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

The exchange differences arising from intercompany loans between entities of the group with different functional currencies are shown as “Other income (expenses)” in the statement of profit or loss.

23. Fair value measurement

The main valuation techniques employed in internal models to measure the fair value of the financial instruments on March 31, 2021 and December 31, 2020 are set out below. The principal inputs into these models are derived from observable market data. The Group did not make any material changes to the valuation techniques and internal models it used in those periods.

Fair value of financial instruments carried at amortized cost

The following tables show the fair value of the financial instruments carried at amortized cost on March 31, 2021 and December 31, 2020.

	3/31/2021
	Book value		Fair value - Level 2		Fair value - Level 3
Assets
Financial assets at amortized cost
Compulsory deposits at central banks		98,694		98,694		—
Credit card receivables		2,787,813		—		2,508,858
Loans to customers		264,542		—		360,271
Interbank transactions		1,424		1,424		—
Other financial assets at amortized cost		19,896		19,896		—
Total		3,172,369		120,014		2,869,129

Liabilities
Financial liabilities at amortized cost		8,605,100		8,679,783		—
Deposits by customers		5,443,516		5,442,953		—
Deposits in electronic money ("Conta do Nubank")		1,023,804		1,023,241		—
Bank receipt of deposits (RDB) and RDB-V		4,419,712		4,419,712		—
Time deposit (DPGE)		18,136		18,136		—
Payables to credit card network		2,982,547		3,124,841		—
Borrowings and financing		103,220		36,186		—
Securitized borrowings		57,681		57,667		—
Total		8,605,100		8,679,783		—

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	12/31/2020
	Book value		Fair value - Level 2		Fair value - Level 3
Assets
Financial assets at amortized cost
Compulsory deposits at central banks		43,542		43,542		—
Credit card receivables		2,908,907		—		2,720,518
Loans to customers		174,694		—		242,305
Other financial assets at amortized cost		22,870		22,870		—
Total		3,150,013		66,412		2,962,823

Liabilities
Financial liabilities at amortized cost		9,093,316		9,075,145		—
Deposits by customers		5,565,349		5,565,421		—
Deposits in electronic money ("Conta do Nubank")		1,029,284		1,029,356		—
Bank receipt of deposits (RDB) and RDB-V		4,536,065		4,536,065		—
Time deposit (DPGE)		19,513		19,513		—
Payables to credit card network		3,331,258		3,313,608		—
Borrowings and financing		97,454		96,877		—
Securitized borrowings		79,742		79,726		—
Total		9,093,316		9,075,145		—

Cash and cash equivalents include short-term deposits, bank balances, reverse repurchase agreements, among others. For cash and cash equivalents, interbank transactions, other financial assets at amortized cost, borrowings and financing and securitized borrowings, the carrying amount is deemed to be a reasonable approximation of the fair value.

The valuation approach to specific categories of financial instruments is described below.

i) Fair value level 2 models and inputs

Credit card: Credit card receivables and payables to credit card network’s fair values are calculated using the discounted cash flow method. Fair values are determined by discounting the contractual cash flows by the interest rate curve. For receivables, fair values exclude expected losses. For payables, cash flows are also discounted by the Group's own credit spread.

Loans to customers: Fair value is estimated based on groups of clients with similar risk profiles, using valuation models. The fair value of a loan is determined by discounting the contractual cash flows by the interest rate curve, excluding expected losses.

Deposits: The majority of deposit liabilities are payable on demand and therefore can be deemed short-term in nature with the fair value equal to the carrying value.

ii) Fair value level 3 models and inputs

Credit card and loan receivables: For the fair value of both credit card receivables and loans to customers, the Group used two inputs that are not directly observable: the probability of payment on time by customers and the rate of recovery of late payments. Both are estimated using the Group's internal databases.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Fair values of financial instruments measured at fair value

The following table shows a summary of the fair values, as of March 31, 2021 and December 31, 2020, of the financial assets and liabilities indicated below, classified on the basis of the various measurement methods used by the Group to determine their fair value:

	3/31/2021								12/31/2020
	Published price quotations in active markets (Level 1)		Internal Models (Level 2)		Internal Models (Level 3)		Total		Published price quotations in active markets (Level 1)		Internal Models (Level 2)		Internal Models (Level 3)		Total
Assets
Securities
Financial treasury bills (LFT)		1,869,416		—		—		1,869,416		1,836,139		—		—		1,836,139
National treasury bills (LTN)		2,391,447		—		—		2,391,447		2,300,676		—		—		2,300,676
National treasury notes (NTN)		326		—		—		326		408		—		—		408
Certificate of bank deposits (CDB)		—						—		—						—
Bank receipt of deposits (RDB)		—		1		—		1		—		1		—		1
Investment funds		—		95,240		—		95,240		—		150,030		—		150,030
Bill of credit (LC)		—		21		—		21		—		23		—		23
Derivative financial instruments		34		—		—		34		32		48		—		80
Collateral for credit card operations		—		49,092		—		49,092		—		90,761				90,761

Liabilities
Derivative financial instruments		3,741		—		58,475		62,216		2,783		—		72,521		75,304
Instruments eligible as capital		—		13,063		—		13,063		—		15,492		—		15,492
Repurchase agreements		35,508		—		—		35,508		—		—		—		—

Securities: The securities with high liquidity and quoted prices in the active market are classified as Level 1. Considering this fact, all the Brazilian Government Bonds are included in Level 1 as they are traded in an active market. Fair values are the quoted prices of the secondary market, published by Brazilian Association of Financial and Capital Market Entities (“Anbima”).

Derivatives: Derivatives traded on stock exchanges are classified in Level 1 of the hierarchy. Derivatives traded on the Brazilian stock exchange (“B3”) are fair valued using B3 quotations. Interest rate OTC Swaps are valued discounting future expected cash flows to present values using interest rate curves based on interest rate futures and are classified as Level 2. The embedded derivative conversion feature from the senior preferred share, was calculated based on methodologies for the share price described in note 8.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Instruments eligible as capital: If the instrument has an active market, prices quoted in this market are used. Otherwise, valuation techniques are used, such as discounted cash flows, where cash flows are discounted by a risk-free rate and a credit spread. Instruments eligible as capital were designated at fair value through profit or loss in the initial recognition (fair value option).

There were no differences between the fair value at initial recognition and the transaction prices.

Transfers between levels of the fair value hierarchy

Transfers between levels of the fair value hierarchy are reported regularly throughout the year. For the three-month period ended March 31, 2021 and for the year ended December 31, 2020, there were no transfers of financial instruments between Levels 1 and 2 or between Levels 2 and 3.

24. Income tax

Current and deferred tax are determined for all transactions that have been recognized in the consolidated financial statements using the provisions of the current tax laws. The current income tax expense or benefit represents the estimated taxes to be paid or refunded, respectively, for the current period. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities. They are measured using the tax rates and laws that will be in effect when the differences are expected to reverse.

Income tax reconciliation

The tax on the Group's pre-tax profit differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities. The following is a reconciliation of income tax expense to profit (loss) for the year, calculated by applying the combined Brazilian income tax rate of 40% for the three-month period ended March 31, 2021 and 2020:

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	03/31/2021			03/31/2020
Net loss before income tax		(53,367	)		(46,500	)
Tax rate (i)		40	%		40	%
Income tax		21,347			18,600

Permanent additions/exclusions
Share-based payments		(4,936	)		(1,378	)
Customers gifts		(46	)		(100	)
Operational losses		(722	)		(2,866	)
Effect of different tax rates - subsidiaries		(13,316	)		(1,258	)
Other non-deductible expenses		498			68
Income tax for the period		2,825			13,066

Current tax expense		(31,508	)		(6,337	)
Deferred tax benefit		35,392			19,404
Deferred tax recognized in OCI		(1,059	)		(1	)
Income tax for the period		2,825			13,066
Effective tax rate		-7.3	%		-28.1	%

(i)

For reconciliation purposes, the tax rate used was the one applicable to the Brazilian subsidiaries, which represent the most significant portion of the operations of the Group.

Deferred income taxes

The following tables presents significant components of the Group’s deferred tax assets and liabilities as of March 31, 2021 and December 31, 2020, and its changes for the periods then ended. The accounting records of deferred tax assets on income tax losses and/or social contribution loss carryforwards, as well as those arising from timing differences, are based on technical feasibility studies which consider the expected generation of future taxable income, considering the history of profitability for each subsidiary individually. The Group has no time limit for use of the deferred tax assets, but its use is limited to 30% of taxable profit.

Reflected in the statement of profit or loss

	12/31/2020			Constitution			Realization			Foreign exchange			03/31/2021

Provisions for credit losses		68,155			31,299			(8,401	)		(5,799	)		85,254
Provision PIS/COFINS - Financial Revenue		6,398			—			—			(494	)		5,904
Other provisions		33,323			12,837			(763	)		(3,883	)		41,514
Fair value changes - financial instruments		8,659			34,777			(8,509	)		(1,451	)		33,476
Total deferred tax assets on temporary differences		116,535			78,913			(17,673	)		(11,627	)		166,148

Tax loss and negative basis of social contribution		8,596			3,928			—			(120	)		12,404
Deferred tax assets		125,131			82,841			(17,673	)		(11,747	)		178,552

Futures settlement market		—			(34,395	)		—			904			(33,491	)
Others		—			(2,866	)		—			75			(2,791	)
Fair value changes - financial instruments		(8,741	)		(1,901	)		8,327			462			(1,853	)
Deferred tax liabilities		(8,741	)		(39,162	)		8,327			1,441			(38,135	)
Deferred tax assets net of deferred tax liabilities		116,390			43,679			(9,346	)		(10,306	)		140,417

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

	12/31/2020			Constitution			3/31/2021

Reflected in equity, in other comprehensive income
Fair value changes - cash flow hedge		(32	)		(1,059	)		(1,091	)
Total		(32	)		(1,059	)		(1,091	)

Reflected in the statement of profit or loss	12/31/2019			Constitution			Realization/ Reversal			Foreign exchange			12/31/2020

Provisions for credit losses		63,846			79,383			(60,808	)		(14,266	)		68,155
Provision PIS/COFINS - Financial Revenue		8,252			—			—			(1,854	)		6,398
Other provisions		14,944			27,125			(5,242	)		(3,504	)		33,323
Fair value of securities		2,177			8,945			(1,791	)		(672	)		8,659
Total deferred tax assets on temporary differences		89,219			115,453			(67,841	)		(20,296	)		116,535

Tax loss and negative basis of social contribution		4,979			7,150			(3,724	)		191			8,596
Deferred tax assets		94,198			122,603			(71,565	)		(20,105	)		125,131

Fair value changes - government securities		(698	)		(7,013	)		—			(1,030	)		(8,741	)
Deferred tax liabilities		(698	)		(7,013	)		—			(1,030	)		(8,741	)
Deferred tax assets net of deferred tax liabilities		93,500			115,590			(71,565	)		(21,135	)		116,390

	12/31/2019			Constitution			12/31/2020

Reflected in equity, in other comprehensive income
Fair value changes - cash flow hedge		(1	)		(31	)		(32	)
Total		(1	)		(31	)		(32	)

In March 2021, the Social Contribution tax rate in Brazil increased 5 percentage points, thus the combined income tax rate will increase from 40% to 45%. The change is effective from July 1 to December 31, 2021 and it mainly affects the subsidiaries Nu Pagamentos and Nu Financeira.

25. Equity

The table below presents the changes in shares issued and fully paid and shares authorized, by class and the authorized as of March 31, 2021 and December 31, 2020:

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Shares authorized and fully paid	Ordinary shares			Preferred shares		Senior preferred shares (*)		Management shares		Total

Total as of December 31, 2019		215,537,175			422,057,050		—		2,500		637,596,725

SOPs exercised and RUSs vested		7,235,430			—		—		—		7,235,430
Shares withheld for employees' taxes (note 8)		(114,341	)		—		—		—		(114,341	)
Shares repurchased		(1,171	)		—		—		—		(1,171	)
Capital increase (Series F-1)		—			—		16,795,799		—		16,795,799

Total as of December 31, 2020		222,657,093			422,057,050		16,795,799		2,500		661,512,442

SOPs exercised and RUSs vested		3,564,295			—		—		—		3,564,295
Shares withheld for employees' taxes (note 8)		(120,696	)		—		—		—		(120,696	)
Shares repurchased		(125,000	)		—		—		—		(125,000	)
Capital increase (Series G)		—			11,758,704		—		—		11,758,704

Total as of March 31, 2021		225,975,692			433,815,754		16,795,799		2,500		676,589,745

Shares authorized and not paid	Ordinary shares		Preferred shares		Senior preferred shares (*)		Management shares		Total

Contingent share consideration granted in a business combination for management services		700,000		—		—		—		700,000
Preferred and senior preferred shares conversion		450,611,553		—		—		—		450,611,553
Reserved for the share-based payments (note 8)		57,735,015		—		—		—		57,735,015
Total shares authorized and not paid		509,046,568		—		—		—		509,046,568

Shares authorized and fully paid		225,975,692		433,815,754		16,795,799		2,500		676,589,745
Total shares		735,022,260		433,815,754		16,795,799		2,500		1,185,636,313

(*) According to the Company’s bylaws, the senior preferred shares are considered capital but are presented as liability due to their characteristics (note 21).

The Company has ordinary shares authorized and not fully paid relating to commitments from acquisitions of entities, the issuance of share-based payments and the potential conversion of the preferred and senior preferred shares.

Share capital and share premium reserve

All share classes of the Company have a nominal par value of USD0.0004 on March 31, 2021 and December 31, 2020, and the total amount of share capital is USD48 (USD45 as of December 31, 2020).

Share premium reserve relates to amounts contributed by shareholders over the par value at the issuance of shares.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Capital increases

The table above presents the number of shares issued, and the following table presents the amount of shares issued, increase in capital and premium reserve in transactions other than the exercise of the SOPs and vesting of RSUs:

Date	Capital and share premium reserve
1/27/2021 - Series G		400,000
Total presented as equity		400,000

June 18, 2020 (*) - Series F-1		300,000
Total presented as liability		300,000

(*) According to the Company’s bylaws, the senior preferred shares are considered capital but are presented as liability due to their characteristics (note 21).

Accumulated losses

The accumulated losses include the share-based payment reserve amount, as shown in the table below.

As described in note 8, the Group's share-based payments includes incentives in the form of SOPs, RSUs and Awards. Further, the Company can use the reserve to absorb accumulated losses.

	3/31/2021			12/31/2020
Accumulated losses		(220,974	)		(171,491	)
Share-based payments reserve		103,686			69,050
Total		(117,288	)		(102,441	)

Shares repurchased and withheld

Shares may be repurchased from former employees when they leave the Group or withheld because of RSUs plans in order to settle the employee’s tax obligation. These shares repurchased or withheld are canceled and cannot be reissued or subscribed. During the three-month period ended on March 31, 2021 and the year ended December 31, 2020, the following shares were repurchased:

	3/31/2021		12/31/2020
Quantity of shares repurchased		125,000		1,171
Total value of shares repurchased		2,001		15
Total value of shares withheld - RSU (note 8)		3,528		2,646

Accumulated other comprehensive income

Other comprehensive income includes the amounts, net of the related tax effect, of the adjustments to assets and liabilities recognized in equity through the consolidated statement of comprehensive income.

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Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Other comprehensive income that may be reclassified to profit or loss subsequently is related to cash flow hedges that qualify as effective hedges and currency translation that represents the cumulative gains and losses on the retranslation of the Group’s investment in foreign operations. These amounts will remain under this heading until they are recognized in the consolidated statement of profit or loss in the periods in which the hedged items affect it.

The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities designated at fair value. Amounts in the own credit reserve are not reclassified to profit or loss in future periods.

The accumulated balances are as follows:

	3/31/2021			12/31/2020
Cash flow hedge effects		2,744			81
Deferred income taxes		(1,091	)		(32	)
Currency translation on foreign entities		(118,085	)		(97,081	)
Own credit adjustment effects		(842	)		(468	)
Total		(117,274	)		(97,500	)

26. Management of financial risks, financial instruments, and other risks

Overview

The Group prioritizes risks that could have a material impact on its strategic objectives. To efficiently manage and mitigate these risks, the risk management structure conducts risk identification and assessment to prioritize the risks that are key to pursue potential opportunities and/or that may prevent value from being created or that may compromise existing value, with the possibility of having impacts on results, capital, liquidity, customer relationship and reputation.

Risks that are actively monitored include:

Credit risk;

Liquidity risk;

Market Risk and Interest Rate Risk in the Banking Book (IRRBB);

Operational risk; and

Reputational risk.

Risks actively monitored

The Group is exposed to different risks arising from its activities. Risk monitoring adapts as new risks and threats emerge. Currently, the Group is focused on the following risks:

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Credit Risk

The Group credit risk management structure is independent from the business units and provides processes and tools to measure, monitor, control and report the credit risk from all products, continuously verifying their adherence to the approved policies and risk appetite structure. The credit risk management also assesses and monitors the impacts of potential changes in the economic environment in the Group credit portfolio to ensure that it is resilient to economic downturns.

The Group also has limits for exposure to counterparty credit risk in cash or cash equivalents assets, aligned with its Risk Appetite Statement. These limits are based on ratings from external rating agencies. Only part of the cash can be invested in assets with credit risk exposures. Exposures in issuers rated lower than AA+ on a local scale are not permitted.

The Group’s outstanding balance of financial assets is shown in the table below:

Financial assets	3/31/2021		12/31/2020

Cash and cash equivalents		2,200,663		2,343,780

Financial assets at fair value through profit or loss		4,405,577		4,378,118
Securities		4,356,451		4,287,277
Derivative financial instruments		34		80
Collateral for credit card operations		49,092		90,761

Financial assets at amortized cost		3,172,369		3,150,013
Compulsory deposits at central banks		98,694		43,542
Credit card receivables		2,787,813		2,908,907
Loans to customers		264,542		174,694
Interbank transactions		1,424		—
Other financial assets at amortized cost		19,896		22,870
Total		9,778,609		9,871,911

Liquidity Risk

Liquidity risk is monitored to ensure that the Group will have sufficient high-quality liquid assets to withstand severe stress scenarios and also an adequate funding profile in terms of tenor, type, and counterparties.

The Group has a Contingency Funding Plan that describes possible management actions that should be taken in the case of a deterioration of the liquidity indicators.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Primary sources of funding

	3/31/2021									12/31/2020
Funding Sources	Up to 12 months		Over 12 months		Total		%			Up to 12 months		Over 12 months		Total		%

Deposits by customers		4,378,850		40,862		4,419,712		100	%		4,506,252		29,813		4,536,065		100	%
Bank receipt of deposits (RDB)		4,308,014		40,862		4,348,876		100	%		4,415,892		29,813		4,445,705		98	%
Bank receipt of deposits (RDB-V)		70,836		—		70,836		0	%		90,360		—		90,360		2	%
Time deposit		—		18,136		18,136		0	%		—		19,513		19,513		0	%
Instruments eligible as capital		—		13,063		13,063		0	%		—		15,492		15,492		0	%
Senior preferred shares		—		342,450		342,450		0	%		—		328,394		328,394		0	%
Total		4,378,850		414,511		4,793,361		100	%		4,506,252		393,212		4,899,464		100	%

Maturities of financial liabilities

The tables below summarize the Group’s financial liabilities into groupings based on their contractual maturities:

	3/31/2021
Financial liabilities	Carrying amount		Gross nominal outflow		Up to 1 month		1 to 3 months		3-12 months		Over 12 months

Derivative financial instruments		62,216		62,216		3,741		—		—		58,475
Instruments eligible as capital		13,063		24,463		—		—		—		24,463
Deposits
Deposits in electronic money ("Conta do Nubank")		1,023,804		1,023,804		1,023,804		—		—		—
Bank receipt of deposits (RDB)		4,348,876		4,372,051		4,034,569		118,172		173,661		45,649
Bank receipt of deposits (RDB-V)		70,836		70,836		70,836		—		—		—
Time deposit		18,136		20,043		—		—		—		20,043
Payables to credit card network		2,982,547		2,982,547		1,455,555		704,976		822,016		—
Borrowings and financing		103,220		118,590		755		58,021		8,101		51,713
Securitized borrowings		57,681		58,423		5,451		10,842		42,130		—
Senior preferred shares		342,450		910,372		—		—		—		910,372
Total		9,022,829		9,643,345		6,594,711		892,011		1,045,908		1,110,715

The gross nominal outflow was projected considering the exchange rate of Brazilian reais and Mexican pesos to USD as of March 31, 2021 (R$5.6337 and MXN20.4325 per USD1) and the projected Brazilian CDI, obtained in B3’s website, for the deposits.

For senior preferred shares, the calculation considers the payments on the 6th anniversary of the issuance.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Market Risk and Interest Rate Risk in the Banking Book (IRRBB)

Management of market risk and interest rate risk in the Banking Book (IRRBB) is based on the following metrics:

Interest Rate Sensitivity (DV01): impact on the market value of cash flows, when submitted to a one basis point increase in the current annual interest rates or index rate;

Value at Risk (VaR): maximum market value loss for a holding period with a confidence level; and

FX exposures, considering all financial positions that bring FX risk and operational expenses in other currencies.

Although there is a risk relating to the changes in the fair value of its shares and its effects to the share-based compensation and the embedded derivative conversation feature from the senior preferred share, the Group does not hedge these risks because it considers impracticable due to its nature and to the lack of instruments in the market. The risk arising from the share-based payments which can be derived from the increase in expenses due to the issuance of new grants or appreciation of the share value of the Company. The risk arising from the embedded derivative conversion features affects the statement of profit and loss until the conversion when the Group derecognizes the liability component and embedded derivative and recognizes it as equity. As a result, if the instrument is converted, the accumulated net impact on equity during the life of the convertible instrument will be zero if no cash is paid.

Current methodology for VaR is Historical Simulation, in which the current portfolio is repriced (by full valuation) considering the observed changes in risk factors in a 5-year rolling period. The market risk factors considered in the calculation of VaR are interest rates and FX.

The table below presents the VaR, calculated using a confidence level of 95% and a holding period of 1 day.

VaR - USD	3/31/2021		12/31/2020

Group		1,577		1,128
Nu Financeira		428		561
Nu Pagamentos		116		140

Currency risk

The consolidated financial statements may present volatility due to the Group’s operations in foreign currencies, such as Brazilian reais, Mexican and Colombian pesos. At the Nu Holdings level, there is no net investment hedge for the investments in other countries.

For the three-month period ended in March 31,2021, none of the entities of the Group had significant financial instruments in a currency other than their respective functional currencies.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Derivatives instruments (dollar and euro future contracts, traded in B3) are used for carrying out these hedging activities, which are supervised by the Asset & Liability Management and Capital (ALM) Forum. Residual exposures are monitored, considering the costs (objects of hedge) and the derivatives (instruments of hedge), to assure effectiveness. The currency risk in Nu Financeira is not hedged because it is deemed as not relevant.

Interest rate risk

The following analysis is the Group's sensitivity of the fair value to an increase of 1 basis point (“bp”) (DV01) in Brazilian market interest rates, assuming a parallel shift and a constant financial position:

DV01 - USD - as of	Brazilian Risk Free Curve						USD Curve

Curve	Mar-21			Dec-20			Mar-21			Dec-20

Nu Pagamentos		2			2			(1	)		(1	)
Nu Financeira		(3	)		(1	)		—			—
Nu Holdings		—			—			(1	)		(1	)

The interest rate risk in subsidiaries other than Nu Pagamentos and Nu Financeira are deemed not relevant as of March 31, 2021 and December 31, 2020.

To keep DV01 sensitivities within defined limits, derivatives are used to hedge interest rate risk. Currently, interest rate futures traded in B3 and swaps are used for hedging purposes.

Operational risk, including Information Technology risks

There is an operational risk and internal control’s structure, which is responsible for the identification and assessment of operational risks, as well as the evaluation of the design and effectiveness of the internal controls structure. This structure is also responsible for the preparation and periodic testing of the business continuity plan and to coordinate the risk assessment in new product launches and significant changes in the existing processes.

Within the governance of the risk management process, mechanisms for identifying, measuring, evaluating, monitoring, and reporting operational risk events are presented to each business area (first line of defense), as well as disseminating the control culture to other team members internally. The main results from the risk assessments are presented to the Operational Risk and Internal Controls Technical Forum and to the Risk Committee. Applicable improvement recommendations result in action plans with planned deadlines and responsibilities.

Information Technology ("IT") risk

As Nubank operates in a challenging cyber threat environment, the Company continuously invests in controls and technologies to defend against these threats. Information Technology risks, including cyber risk, is a priority area for the Group and therefore the Company has a dedicated IT Risk structure, which is part of the second line of defense. This team is independent from IT related areas, including Engineering, IT Operations, and Information Security.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

The results of the IT risk and controls assessments are regularly discussed at the IT Risk Technical Forum and also presented to the Risk Committee. Applicable improvement recommendations result in action plans with planned deadlines and responsibilities.

Reputational risk

The Group understands that the materialization of other risks can negatively impact its reputation, as they are intrinsically connected. Undesirable events in different risk dimensions such as business continuity, cyber security, ethics and integrity, social media negative mentions, among others, can bring damage to Nubank’s reputation.

Therefore, the Group has teams and processes in place dedicated to overseeing external communication and for crisis management, which are key elements to identity and mitigate reputational events, as well as to gain long-term insight to better prevent or respond to future events.

27. Capital management

The purpose of capital management is to estimate the future requirements of regulatory capital, based on the Group's growth projections, risk exposure, market movements and other relevant information. Also, the capital management structure is responsible for identifying sources of capital, for writing and submitting the capital plan for approval, as well as for monitoring the current level of the regulatory capital ratios.

The following table shows the calculation of the capital ratios and their minimum requirement for Nubank's legal entities that are required by the current regulation in Brazil.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Nu Pagamentos

	3/31/2021			12/31/2020

Adjusted Shareholder's Equity		270,256			276,672

Max Amount		1,591,839			1,538,256
Monthly average of payment transactions		1,591,839			1,538,256
Balance of electronic currencies		1,064,070			1,072,056

Capital Requirement Ratio		17.0	%		18.0	%

Nu Financeira

	3/31/2021			12/31/2020

Regulatory Capital		176,891			118,612
Tier I		160,376			101,229
Common Equity		160,376			101,229
Tier II		16,515			17,383

Risk Weighted Assets (RWA)		578,799			388,346
Credit Risk (RWA CPAD)		536,889			372,841
Market Risk (RWA MPAD)		60			63
Operational Risk (RWA OPAD)		41,850			15,442

Capital Required		60,774			40,776

Margin		116,118			77,836
Basel Ratio		30.6	%		30.5	%

RBAN - Capital Required		1,319			2,334
Margin considering RBAN		114,799			75,502

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

28. Segment information

In reviewing the operational performance of the Group and allocating resources, the Chief Operating Decision Maker of the Group (“CODM”), who is the Group’s Chief Executive Officer (“CEO”), reviews the consolidated statement of profit or loss and other comprehensive income or loss.

The CODM considers the whole Group as a single operating and reportable segment, monitoring operations, making decisions on fund allocation, and evaluating performance. The CODM reviews relevant financial data on a combined basis for all subsidiaries.

The Group’s income, results, and assets for this one reportable segment can be determined by reference to the consolidated statement of profit or loss and other comprehensive income or loss, as well as the consolidated statements of financial position.

Information about products and services

The information about products and services are disclosed in note 5.

Information about geographical area

The table below shows the revenue and non-current assets per geographical area:

	Revenues (a)				Non-current assets (b)
	3/31/2021		3/31/2020		3/31/2021		12/31/2020

Brazil		206,768		161,830		21,858		24,099
Mexico		1,902		45		1,428		1,418
Colombia		10		—		143		79
Cayman		—		—		831		831
Germany		—		—		160		181
Argentina		—		—		93		112
US		—		—		6,409		6,993
Total		208,680		161,875		30,922		33,713

(a) Includes interest income from credit cards and lending, interchange fees, recharge fees, rewards revenue, late fees and other fees and commission income.

(b) Non-current assets are comprised of right-of-use assets, property, plant and equipment, intangible assets, and goodwill.

The Group has no single customer that represents 10% or more of the Group's revenues in the three-month period ending March 31, 2021 and 2020.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

29. Earnings per share

The following table reflects the net loss and share data used in the basic and diluted earnings per share (“EPS”) calculations:

	3/31/2021			3/31/2020

Loss attributable to owners of the Company		(49,483	)		(33,433	)

Loss for the year to ordinary shareholders – basic and diluted EPS		(49,483	)		(33,433	)

Total weighted average of ordinary outstanding shares for basic and diluted EPS (in thousands of shares)		224,543			216,118

Basic and diluted EPS for ordinary shareholders (US$)		(0.2204	)		(0.1547	)

Antidilutive instruments not considered in the weighted number of shares (thousands of units)		56,537			52,599

There is no modification to the terms and conditions as described in the consolidated financial statements for the year ended December 31, 2020.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

30. Subsequent events

Easynvest’s Business Combination

On May 4, 2021, Brazilian Central Bank approved the acquisition of the companies that are part of the Easynvest investment platform:

Easynvest Holding Financeira S.A;

Easynvest Título Corretora de Valores S.A;

Easynvest Participações S.A;

Easynvest Corretora de Seguros Ltda.;

Easynvest Gestão de Recursos Ltda.; and

Easynvest Sociedade de Crédito Direto S.A.

Easynvest is an independent digital investment broker and the acquisition marks the Group’s entry into the market of investment platforms.

The acquisition price is comprised of USD297 million in cash and of 7.9 million preferred shares class F-2 which is equivalent to a total acquisition price of USD451million, subject to certain acquisition adjustments. Preferred shares class F-2 have characteristics similar to the other preferred share classes described in note 21.

The acquisition was completed on June 1, 2021 when the control over the entities was transferred upon all conditions established on the share purchase agreement and the liquidation are completed.

The transaction qualifies as a business combination and will be accounted for using the acquisition method of accounting. As a result of limited access to Easynvest’s information required to prepare initial accounting, together with the limited time since the acquisition date and the effort required to conform Easynvest’s financial statements to the Company's practices and policies, the initial accounting for the business combination is incomplete at the time of these condensed consolidated interim financial statements. As a result, the Company is unable to provide the amounts recognized as of the Acquisition date for the major classes of assets acquired and liabilities assumed, pre-acquisition contingencies and goodwill.

Senior preferred share conversion

On May 20, 2021, each senior preferred share was converted into 1 Series F-1 preferred share, with the total issuance of 16,795,799 shares at the request of the holders. The conversion resulted in a reclassification of the amount recognized as a derivative and the amount recognized as liability into share capital and share premium reserve in the total amount of USD420,012. At the date of conversion, the total fair value of the senior preferred shares, which consisted of the derivative and the liability, was determined to be equal to their values as of March 31, 2021. As a result, there was no effect on the consolidated statement of profit or loss as a result of the conversion.

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Nu Holdings Ltd.

Interim Condensed Consolidated Financial Statements

as of March 31, 2021

Capital increase

In June 2021, Nu Holdings completed the capital increase Series G-1 – in the amount of USD400 million. As a result of the transaction, 10,002,809 Series G-1 preferred shares were issued.

Changes on shares’ classes

On May 29, 2021, the issued and unissued authorized ordinary shares were converted into Class A Ordinary Shares, and it was authorized the creation of 770,625,008 Class B Ordinary Shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares are identical, except that (1) holders of Class B ordinary shares are entitled to 20 votes per share, whereas holders of Class A ordinary shares are entitled to one vote per share; (2) holders of Class B ordinary shares have certain conversion rights into Class A Ordinary Shares; (3) holders of Class B ordinary shares are entitled to preemptive rights in the event that additional Class A ordinary shares are issued in order to maintain their proportional ownership interest; and (4) Class B ordinary shares shall not be listed on any stock exchange and will not be publicly traded.

In June 2021, 184,110,692 Class A Ordinary Shares were converted into Class B Ordinary Shares.

Awards shares

On July 5, 2021, Nu Holdings issued 7,596,827 Class A ordinary shares pursuant to the achievement of market conditions from the Awards described in note 8. On July 21, 2021, these Class A Ordinary Shares were converted into Class B Ordinary Shares. There is no outstanding Awards after the issuance of these shares.

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KPMG Auditores Independentes

Rua Verbo Divino, 1400, 1º - 4º andar

Chácara Santo Antonio

04719-911 - São Paulo/SP – Brasil

Telephone + 55 (11) 3940-1500

kpmg.com.br

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Nu Holdings Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Nu Holdings Ltd. and subsidiaries (“Company”) as of December 31, 2020, 2019 and 2018, and the related consolidated statements of profit or loss, comprehensive income or loss, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, 2019 and 2018, and the consolidated results of its operations and cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG Auditores Independentes

We have served as the Company’s auditor since 2018.

São Paulo, Brazil
July 31, 2021

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Consolidated Statements of Profit or Loss

For the years ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

	Note	2020		2019		2018

Interest income and gains (losses) on financial instruments	6	382,922		337,851		161,554
Fee and commission income	6	354,211		274,258		157,365
Total revenue		737,133		612,109		318,919

Interest and other financial expenses	6	(113,924	)	(109,697	)	(45,417	)
Transactional expenses	6	(126,815	)	(79,316	)	(43,142	)
Credit loss allowance expenses	7	(169,485	)	(175,178	)	(118,628	)
Total cost of financial and transactional services provided		(410,224	)	(364,191	)	(207,187	)

Gross profit		326,909		247,918		111,732

Operating expenses
Customer support and operations	8	(123,950	)	(115,567	)	(46,668	)
General and administrative expenses	8	(266,024	)	(199,919	)	(84,678	)
Marketing expenses	8	(19,426	)	(41,817	)	(6,459	)
Other income (expenses)	8	(9,535	)	(19,914	)	(7,331	)
Total operating expenses		(418,935	)	(377,217	)	(145,136	)

Finance costs - results with convertible instruments	22	(101,152	)	-		-

Loss before income taxes		(193,178	)	(129,299	)	(33,404	)

Income taxes
Current taxes	25	(22,338	)	(3,572	)	(15,520	)
Deferred taxes	25	44,025		40,340		20,341
Total income taxes		21,687		36,768		4,821

Loss for the year		(171,491	)	(92,531	)	(28,583	)

Earnings (Loss) per share - basic and diluted	30	(0.782	)	(0.488	)	(0.156	)

Weighted average number of outstanding shares - basic and diluted (in thousands of shares)	30	219,263		189,655		183,178

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Comprehensive Income or Loss

For the years ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

	Note	2020		2019		2018
Loss for the year		(171,491	)	(92,531	)	(28,583	)

Other comprehensive income or loss:

Effective portion of changes in fair value		8,302		1,491		-
Reclassified to profit or loss		(8,223	)	(1,489	)	-
Deferred income taxes		(31	)	(1	)	-
Cash flow hedge	26	48		1		-

Currency translation on foreign operations	26	(50,100	)	(12,271	)	(35,356	)

Other comprehensive income or loss that may be reclassified to profit or loss subsequently		(50,052	)	(12,270	)	(35,356	)

Change in fair value - own credit adjustment	16	(219	)	(249	)	-

Other comprehensive income or loss that will not be reclassified to profit or loss subsequently		(219	)	(249	)	-

Total other comprehensive loss, net of tax		(50,271	)	(12,519	)	(35,356	)

Total comprehensive loss for the year		(221,762	)	(105,050	)	(63,939	)

Total comprehensive loss for year attributable to shareholders of the parent company		(221,762	)	(105,050	)	(63,939	)

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Financial Position

As of December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

	Note	2020		2019		2018
Assets
Cash and cash equivalents	10	2,343,780		1,246,566		379,207
Financial assets at fair value through profit or loss		4,378,118		2,400,691		655,472
Securities	11	4,287,277		2,237,673		570,181
Derivative financial instruments	15	80		241		-
Collateral for credit card operations	18	90,761		162,777		85,291
Financial assets at amortized cost		3,150,013		2,923,676		1,652,721
Compulsory deposits at central banks		43,542		-
Credit card receivables	12	2,908,907		2,786,524		1,623,827
Loans to customers	13	174,694		58,024		-
Interbank transactions		-		91		-
Other financial assets at amortized cost		22,870		79,037		28,894
Other assets	14	123,495		67,931		35,973
Deferred tax assets	25	125,131		94,198		55,216
Right-of-use assets		10,660		17,195		-
Property, plant and equipment		9,850		8,667		6,702
Intangible assets		12,372		1,110		503
Goodwill	3	831		-
Total assets		10,154,250		6,760,034		2,785,794

Liabilities
Financial liabilities at fair value through profit or loss		90,796		24,125		1
Derivative financial instruments	15	75,304		2,041		1
Instruments eligible as capital	16	15,492		22,084		-
Financial liabilities at amortized cost		9,421,710		5,972,989		2,419,950
Deposits	17	5,584,862		2,693,158		628,683
Payables to credit card network	18	3,331,258		2,976,505		1,675,853
Borrowings and financing	19	97,454		133,401		50,699
Securitized borrowings	19	79,742		169,925		64,715
Senior preferred shares	22	328,394		-		-
Salaries, allowances and social security contributions		25,848		11,238		5,467
Tax liabilities		30,782		12,430		17,149
Lease liabilities		12,014		18,701		-
Provision for lawsuits and administrative proceedings	20	16,469		20,952		14,276
Deferred income	21	25,965		21,154		10,829
Deferred tax liabilities	25	8,741		698		1
Other liabilities		83,814		65,496		21,389
Total liabilities		9,716,139		6,147,783		2,489,062

Equity
Share capital	26	45		45		42
Share premium reserve	26	638,007		631,246		389,394
Accumulated gains (losses)	26	(102,441	)	28,189		(57,994	)
Other comprehensive income/loss	26	(97,500	)	(47,229	)	(34,710	)
Total equity		438,111		612,251		296,732

Total liabilities and equity		10,154,250		6,760,034		2,785,794

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Changes in Equity

For the years ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

									Other comprehensive income/loss
	Share capital		Share premium reserve			Accumulated gains (losses)			Translation reserve			Cash flow hedge reserve		Own credit revaluation reserve			Total shareholders' equity

Balances as of December 31, 2017		37		146,204			(38,688	)		595			-		-			108,148

Share-based payments granted (note 9)		-	-				9,328			-			-		-			9,328
Stock options exercised		-		293			-			-			-		-			293
Shares repurchased (note 26)		-		(695	)		-			-			-		-			(695	)
Capital increase (Series E) (note 26)		4		151,245			-			-			-		-			151,249
Capital increase (Series E.1) (note 26)		1		92,347			-			-			-		-			92,348
Losses for the year		-		-			(28,583	)		-			-		-			(28,583	)
Other comprehensive income or loss, net of tax (note 26)
Currency translation on foreign entities		-		-			(51	)		(35,305	)		-		-			(35,356	)

Balances as of December 31, 2018		42		389,394			(57,994	)		(34,710	)		-		-			296,732

Losses for the year		-		-			(92,531	)		-			-		-			(92,531	)
Absorption of accumulated losses by share premium reserve (note 26)				(160,203	)		160,203			-			-		-			-
Share-based payments granted (note 9)		-		-			18,511			-			-		-			18,511
Stock options exercised		-		5,831			-			-			-		-			5,831
Shares repurchased (note 26)		-		(3,774	)		-			-			-		-			(3,774	)
Capital increase (Series F) (note 26)		3		399,998			-			-			-		-			400,001
Other comprehensive income or loss, net of tax (note 26)
Cash flow hedge		-		-			-			-			1		-			1
Currency translation on foreign entities		-		-			-			(12,271	)		-		-			(12,271	)
Own credit adjustment		-		-			-			-			-		(249	)		(249	)

Balances as of December 31, 2019		45		631,246			28,189			(46,981	)		1		(249	)		612,251

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									Other comprehensive income/loss
	Share capital		Share premium reserve			Accumulated gains (losses)			Translation reserve			Cash flow hedge reserve		Own credit revaluation reserve			Total shareholders' equity

Losses for the year		-		-			(171,491	)		-			-		-			(171,491	)
Share-based payments granted, net of shares withheld for employee taxes (note 9)		-		-			40,861			-			-		-			40,861
Stock options exercised		-		6,776			-			-			-		-			6,776
Shares repurchased (note 26)		-		(15	)		-			-			-		-			(15	)
Other comprehensive income or loss, net of tax (note 26)
Cash flow hedge		-		-			-			-			48		-			48
Currency translation on foreign entities		-		-			-			(50,100	)		-		-			(50,100	)
Own credit adjustment		-		-			-			-			-		(219	)		(219	)

Balances as of December 31, 2020		45		638,007			(102,441	)		(97,081	)		49		(468	)		438,111

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Cash Flows

For the years ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

	Note	2020		2019		2018

Cash flows from operating activities
Reconciliation of profit (loss) to net cash flows from operating activities:
Loss for the year		(171,491	)	(92,531	)	(28,583	)
Adjustments:
Depreciation and amortization		7,428		5,073		1,071
Credit loss allowance expenses	7	187,790		193,967		150,411
Deferred income taxes	25	(44,025	)	(40,340	)	(19,127	)
Provision for lawsuits and administrative proceedings	20	227		7,386		10,037
Gains (losses) on financial instruments		48,433		1,799		1
Interests accrued		39,521		17,681		19,717
Stock options granted	9	38,215		18,511		9,328
		106,098		111,546		142,855
Changes in operating assets and liabilities:
Securities		(2,008,861	)	(1,689,547	)	(608,499	)
Compulsory deposits at central banks		(43,841	)	-		-
Credit card receivables		(242,255	)	(1,414,489	)	(947,476	)
Loans to customers		(143,623	)	(63,009	)	-
Interbank transactions		93		(91	)	-
Other assets		78,319		(166,173	)	(4,807	)
Deposits		2,871,246		2,088,793		646,164
Payables to credit card network		312,607		1,365,476		740,902
Deferred income		3,621		10,325		6,718
Other liabilities		57,841		52,366		46,728

Interest paid		(6,199	)	(15,603	)	(16,389	)
Income tax paid		(7,880	)	(3,457	)	(11,642	)
Cash flows (used in)/generated from operating activities		977,166		276,137		(5,446	)

Cash flows from investing activities
Acquisition of fixed assets		(3,084	)	(2,377	)	(5,875	)
Acquisition of intangible assets		(4,902	)	(2,302	)	(505	)
Acquisition of subsidiary, net of cash acquired		(8,284	)	-		-
Cash flow (used in) generated from investing activities		(16,270	)	(4,679	)	(6,380	)

Cash flows from financing activities
Capital increase	26	-		400,001		243,597
Proceeds from senior preferred shares	22	300,000		-		-
Proceeds from securitized borrowings	19	-		126,768		34,203
Payments of securitized borrowings	19	(52,172	)	(16,835	)	-
Proceeds from borrowings and financing	19	17,974		160,577		28,394
Payments of borrowings and financing	19	(27,893	)	(78,185	)	(52,380	)
Proceeds from debt instruments eligible as capital	16	-		18,824		-
Lease payments		(4,568	)	(2,014	)	-
Exercise of stock options	26	6,776		5,831		293
Shares repurchased	26	(15	)	(3,774	)	(695	)
Shares withheld for employee’s taxes	26	(2,646	)	-		-
Cash flow (used in) generated from financing activities		237,456		611,193		253,412
Change in cash and cash equivalents		1,198,352		882,651		241,586

Cash and cash equivalents
Cash and cash equivalents - beginning of the year	10	1,246,566		379,207		201,957
Foreign exchange rate changes on cash and cash equivalents		(101,138	)	(15,292	)	(64,336	)
Cash and cash equivalents - end of the year	10	2,343,780		1,246,566		379,207

Increase in cash and cash equivalents		1,198,352		882,651		241,586

The accompanying notes are an integral part of these consolidated financial statements.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Notes to the Consolidated Financial Statements

(In thousands of U.S. Dollars, unless otherwise stated)

1. Operations

Nu Holdings Ltd. ("Company" or "Nu Holdings") was incorporated as an exempted company under the Companies Law of the Cayman Islands on February 26, 2016. The address of the Company's registered office is Willow House, 4^th floor, Cricket Square, Grand Cayman - Cayman Islands. It has no operating activities.

The Company carries investments in several operating entities and, as of December 31, 2020, the significant subsidiaries are:

●

Nu Financeira S.A. – SCFI (“Nu Financeira”), an indirect subsidiary also domiciled in Brazil, launched in February 2019, with personal loans as its main product. Nu Financeira offers customers in Brazil the possibility of loans that can be customized in relation to amounts, terms and conditions, number of installments, and transparent disclosure of any charges involved in the transaction, fully controlled through the above mentioned smartphone app. Loan issuance, repayment, and advance payments are available 24/7 through the “Conta do Nubank” account, directly in the app. Nu Financeira also grants credit to Nu Pagamento’s credit card holders, due to overdue invoices, bill installments, revolving credit, among others.

●

Nu Colombia S.A. (“Nu Colombia”), an indirect subsidiary domiciled in Colombia, launched in September 2020 with operations related to credit cards.

The Company and its consolidated subsidiaries are referred to in these consolidated financial statements as the “Group” or "Nubank”.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Nubank's business plan forecasts growth in Brazil, Mexico and Colombia’s operations related to transactions on already issued credit cards and an increase of personal loans, complemented by the issuance of new cards and new products. Accordingly, these consolidated financial statements were prepared based on the assumption of the Group continuing as a going concern due to the Group’s rapid growth.

The Company’s Board authorized the issuance of these consolidated financial statements on July 31, 2021.

a) Acquisition activities pending completion

(i)

Easynvest

In September 2020, the Group announced the acquisition, through its Brazilian subsidiary Nu DTVM, of 100% of the shares of the companies that are part of the investment platform Easynvest, the largest self-directed digital broker in Brazil. On December 31, 2020, the approval by the Brazilian Central Bank (“BACEN”) was still pending, and, therefore, there are no impacts on these financial statements. More information is disclosed in the Subsequent Events note.

(ii)

Akala

b) COVID-19

Relaxed conditions for the customers to renegotiate an extension in the maturities of the loans.

Nubank in Brazil was also responsible for assisting its customers in receiving economic support via an emergency cash assistance from the federal government.

The Group created a new function in the app so that customers can donate cash for various institutions that are actively working to combat the pandemic.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

As a result of the pandemic, there was a drop in the average volume of customer’s purchases on credit card during the critical period of the pandemic in Brazil, during the second quarter of 2020, which affected Nubank’s revenue. However, in the beginning of the third quarter of 2020, revenue returned to pre-pandemic levels.

As a result of the abovementioned situation, Nubank continues to analyze the effects of pandemic on its activities, estimates and judgements, and the application of significant accounting policies related to credit losses. Details of the impacts of the pandemic on the credit loss allowance are shown in notes 12 and 13, as well as in note 27.

2. Basis of preparation

The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Functional currency and foreign currency translation

Nu Holding’s functional and presentation currency

Nu Holdings does not have any direct customer and its main direct activities are (i) investing activities in the operating entities in Brazil, Mexico, Colombia and in other countries, (ii) financing activities, either equity or debt; and (iii) the payment of certain general and administrative expenses. As a result, these are considered its primary and secondary activities and all of them are substantially based on US Dollars (“USD”), which was selected as the functional and presentation currency of Nu Holdings.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

ii)

Subsidiary’s functional currency

iii)

Translation of transactions and balances

Foreign currency transactions and balances are translated in two consecutive stages:

The main criteria applied to the translation of financial statements of foreign subsidiaries to USD are as follows:

assets and liabilities are converted into USD at the exchange rate at the reporting date;

equity is translated into USD at historical cost;

statement of cash flow items are translated into USD using the monthly average exchange rate unless significant variances occur, when the rate of the transaction date is used instead.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

New or revised accounting pronouncements

The following new or revised standards have been issued by IASB and were effective for the periods covered by these consolidated financial statements:

Adopted in 2019

IFRS 16 - Leases

IFRS 16 Leases supersedes IAS 17 Leases along with three Interpretations (IFRIC 4 Determining whether an Arrangement contains a Lease, SIC 15 Operating Leases-Incentives, and SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease).

The adoption on January 1, 2019 of the standard has resulted in the Group recognizing a right-of-use asset and related lease liability in connection with all former operating leases except for those identified as low-value or having a remaining lease term of fewer than 12 months from the date of initial application. The new Standard has been applied using the modified retrospective approach. Prior periods have not been restated.

For contracts in place at the date of initial application, the Group has elected to apply the definition of a lease from IAS 17, and IFRIC 4, and has not applied IFRS 16 to arrangements that were previously not identified as lease under IAS 17, and IFRIC 4.

The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of initial application of IFRS 16, being January 1, 2019. At this date, the Group has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition.

Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied on its historic assessment as to whether leases were onerous immediately before the date of the initial application of IFRS 16.

On transition, for leases previously accounted for as operating leases with a remaining lease term of fewer than 12 months and for leases of low-value assets, the Group has applied for the optional exemptions not to recognize right-of-use assets but to account for the lease expense on a straight-line basis over the remaining lease term.

For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at the date of initial application at the same amounts as under IAS 17 immediately before the date of the initial application.

On January 1, 2019, the weighted average incremental borrowing rate applied to lease liabilities was 8.5%.

The Group has benefited from the use of hindsight for determining the lease term when considering options to extend and terminate leases.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

IFRIC Interpretation 23 - Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.

The Interpretation addresses explicitly the following:

Whether an entity considers uncertain tax treatments separately;

The assumptions an entity makes about the examination of tax treatments by taxation authorities;

How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits, and tax rates; and

How an entity considers changes in facts and circumstances.

The Group determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Group considered whether it has any uncertain tax positions. The Group’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Group determined, based on its tax compliance, and transfer pricing study, that it is probable that the taxation authorities will accept its tax treatments (including those for the subsidiaries). Therefore, the Interpretation did not have an impact on these consolidated financial statements when applied on January 1, 2019.

Adopted in 2020

The following revised accounting pronouncements were adopted with no impact on these consolidated financial statements:

Amendments to IFRS 9 - Negative Offsetting Payment Characteristics

Amendments to IAS 28 - Long Term Investments in Associates and Joint Ventures

Annual Improvements 2015-2017 Cycle

Amendments to IFRS 16 – COVID-19 Related Rent Concessions

Amendments to IFRS9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform

Annual Improvements to IFRS Standards - 2018-2020 Cycle

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

d) Other new standards and interpretations not yet effective

Classification of Liabilities as Current or Non-Current (Amendments to IAS1)

Amendments to References to the Conceptual Framework in IFRS Standards

Amendments to IFRS 3 - Definition of a Business

Amendments to IAS 1 and IAS 8 – Definition of Material

Amendments to IAS 37 - Onerous Contracts — Cost of Fulfilling a Contract

Amendments to IAS 16 - Property, Plant and Equipment — Proceeds before Intended Use

Management does not expect the adoption of the standards and interpretations described above to have a significant impact on these consolidated financial statements.

3. Basis of consolidation

These consolidated financial statements include the accounting balances of Nu Holdings and all those subsidiaries over which the Company exercises control, direct or indirectly. Control is achieved where the Company has (i) power over the investee; (ii) is exposed, or has rights, to variable returns from its involvement with the investee; and (iii) can use its power to affect its profits.

The Company re-assesses whether it maintains control of an investee if facts and circumstances indicate that there are changes to one or more of the three above mentioned elements of control. The consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control over the subsidiary. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated statements of profit or loss from the date the Company gains control until the date the Company ceases to control the subsidiary.

The financial statements of the subsidiaries were prepared in the same period as the Company and applying consistent accounting policies.

The financial statements of the subsidiaries are fully consolidated with those of the Company. Accordingly, all balances, transactions and any unrealized income and expenses arising between consolidated entities are eliminated on the consolidation, except for foreign-currency gain and losses on translation of intercompany loans. Profit or loss and each component of other comprehensive income or loss are attributed to the equity of the Company.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The consolidated financial statements include the subsidiaries listed below:

Principal

Functional

Entity

Control

activities

currency

Country

2020

2019

2018

Nu 1-B, LLC (“Nu 1-B”)

Direct

Holding Company

USD

USA

100

Nu 2-B, LLC (“Nu 2-B”)

Direct

Holding Company

USD

USA

100

Nu 3-B, LLC (“Nu 3-B”)

Direct

Holding Company

USD

USA

100

Nu 1-A, LLC (“Nu 1-A”)

Indirect

Holding Company

USD

USA

100

Nu 2-A, LLC (“Nu 2-A”)

Indirect

Holding Company

USD

USA

100

Nu 3-A, LLC (“Nu 3-A”)

Indirect

Holding Company

USD

USA

100

Nu Payments, LLC (“Nu Payments”)

Indirect

Holding Company

USD

USA

100

Nu MX LLC (“Nu MX”)

Direct

Holding Company

USD

USA

100

Nu Cayman Ltd (“Nu Cayman”)

Direct

Investment company

USD

Cayman

100

Nu Finanztechnologie GmbH (“Nu Finanz”)

Direct

Technology E-Hub

EUR

Germany

100

Nu BN México, S.A. de CV SOFOM

E.N.R. (“Nu Mexico”)

Indirect

Multiple purpose

financial company

MXN

Mexico

100

Nu BN Servicios México, S.A. de CV

(“Nu Servicios˜)

Indirect

Credit card operations

MXN

Mexico

100

Nu BN Tecnologia, S.A de CV (“Nu Tecnologia”)

Indirect

Computer consulting service

MXN

Mexico

100

Nu Colombia S.A. (“Nu Colombia”)

Indirect

Credit card operations

COP

Colombia

100

Nu Argentina S.A. (“Nu Argentina”)

Indirect

Talent E-Hub

ARS

Argentina

100

Cognitect, Inc. ("Cognitect")

Direct

Technology E-Hub

USD

USA

100

Internet – Fundo de Investimento em

Participações Multiestratégia (“Internet FIP”)

Indirect

Investment company

BRL

Brazil

100

Nu Pagamentos S.A. (“Nu Pagamentos”)

Indirect

Credit card and prepaid

account operations

BRL

Brazil

100

Nu Financeira S.A. – SCFI (“Nu Financeira”)

Indirect

Loan operations

BRL

Brazil

100

Nu Investimentos Ltda. (“Nu Investimentos”)

Indirect

Fund manager

BRL

Brazil

100

Nu Distribuidora de Titulos e Valores

Mobiliarios Ltda. ("Nu Distribuidora")

Indirect

Securities distribution

BRL

Brazil

100

Nu Produtos Ltda. ("Nu Produtos")

Indirect

Insurance commission

BRL

Brazil

100

In addition, the Company consolidates the following entities in which the Group’s companies hold a substantial interest or the entirety of the interests and are therefore exposed to, or have rights, to variable returns and have the ability to affect those returns through power over the fund:

Name of the entity		Country
Consolidated in 2020, 2019 and 2018:
Fundo de Investimento em Direitos Creditórios NU (“FIDC Nu”)		Brazil
Nu Fundo de Investimento Renda Fixa (“NuFundo”)		Brazil

New companies formed in 2020:
Fundo de Investimento Ostrum Soberano Renda Fixa Referenciado DI (“Fundo Ostrum”)		Brazil
Nu Fundo de Investimentos em Ações (“Nu FIA”)		Brazil

In Brazil, the subsidiaries Nu Pagamentos and Nu Financeira are regulated by the Brazilian Central Bank (“BACEN”), as such, there are some regulatory requirements that restricts the ability of the Group to access and transfer assets freely to or from these entities within the

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Group and to settle liabilities of the Group. See note 28 where capital requirements are being disclosed.

a) Business combinations

i) Acquisition of Cognitect, Inc

On August 4, 2020, Nu Holdings acquired 100% of the issued and outstanding capital stock of Cognitect, Inc. (“Cognitect”), a Delaware corporation.

Cognitect is a software engineering company responsible for developing Clojure, an open-source functional programming language, and Datomic, a database product, both of which were already used by Nubank. Cognitect licenses Datomic for customers and provides consulting services related to Datomic and Clojure. Nubank’s intention was to add the knowledge of Cognitect developers to its team to foster technology and efficiency.

Purchase consideration at closing date

The operation was consummated by means of:

As part of the purchase agreement, a contingent cash and a contingent share consideration has been agreed to be paid over 5 years in equal installments, dependent upon the former Cognitect’s shareholders’ and employees continuing to provide services to the Company, which were then considered as compensation for post-combination services and not a component of the purchase consideration transferred. The value attributable to each of the 537 thousand shares is USD 10.71 and corresponds to the estimated fair value of the ordinary share at the date of the acquisition. The fair value of the shares was calculated using methodologies similar to the share-based payment (note 9). Further, there is also an escrow deposit which will be released on the 5^th anniversary of the acquisition.

The difference between the amount paid and the net assets acquired at fair value resulted in the recognition of goodwill.

Assets acquired and liabilities assumed

The fair values of the identifiable assets and liabilities as at the date of acquisition were:

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	Fair value recognized on acquisition
Identifiable assets and liabilities
Cash and cash equivalents		2,148
Software		5,173
Customer relationship		2,689
Other assets (liabilities)		(409	)
Total identifiable net assets at fair value		9,601

Goodwill arising on acquisition		831
Total consideration		10,432
Purchased consideration transferred		10,432

Contingent liabilities have not been recorded due to the acquisition.

Identifiable intangible assets are amortized for a period of 2.25 to 5 years, according to the useful life defined based on the expected future economic benefits generated by the asset. The goodwill does not have defined useful life and will have its recoverability tested at least annually.

If the business combination had taken place at the beginning of the year, the Group’s revenue and loss for the year would not have been materially impacted.

4. Significant accounting policies

The accounting policies described below have been applied consistently through the periods presented in these consolidated financial statements.

Financial instruments

Initial recognition and measurement

Financial assets and liabilities are initially recognized when the Group becomes a party to the contractual terms of the instrument. The Group determines the classification of its financial assets and liabilities at initial recognition and measures a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss (FVTPL), transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in profit or loss. Immediately after initial recognition, an expected credit loss (ECL) allowance is recognized for financial assets measured at amortized cost and investments in debt instruments measured at fair value through other comprehensive income (FVOCI), if any.

There were no defaults or breaches in any financial liability during 2020 and 2019.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Classification and subsequent measurement

Financial assets and financial liabilities are classified as FVTPL where there is a requirement to do so or where they are otherwise designated at FVTPL on initial recognition. Financial assets and financial liabilities which are required to be held at FVTPL include:

●

Financial assets and financial liabilities held for trading;

●

Debt instruments that do not have payments of principal and interest (SPPI) characteristics solely. Otherwise, such instruments must be measured at amortized cost or FVOCI, and;

●

Equity instruments that have not been designated as held at FVOCI.

Financial assets and financial liabilities are classified as held for trading if they are derivatives or if they are acquired or incurred mainly for the purpose of selling or being repurchased in the near-term, or form part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit-taking.

In certain circumstances, other financial assets and financial liabilities are designated at FVTPL where this results in the more relevant information. This may arise because it significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on a different basis, where the assets and liabilities are managed and their performance evaluated on a fair value basis or, in the case of financial liabilities, where it contains one or more embedded derivatives which are not closely related to the host contract.

The classification and measurement requirements for financial asset debt and equity instruments and financial liabilities are set out below.

Financial assets - debt instruments

Debt instruments are those instruments that meet the definition of financial liability from the issuer's perspective, such as loans and government and corporate bonds.

The classification criteria and subsequent measurement for financial assets depends on the business model for their management and the characteristics of their contractual flows. The business models refer to the way in which the Group manages its financial assets to generate cash flows. In this definition, the following factors are taken into consideration, among others:

How key management staff assess and report on the performance of the business model and the financial assets held in the business model;

The risks that affect the performance of the business model (and the financial assets held in the business model) and, specifically, the way in which these risks are managed and

The frequency and volume of sales in previous years, as well as expectations of future sales.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Depending on these factors, the asset can be measured at amortized cost, at fair value with changes in other comprehensive income, or at fair value with changes through profit and loss.

Business model: The business model reflects how the Group manages the assets to generate cash flows and, specifically, whether the Group’s objective is solely to (i) collect the contractual cash flows from the assets or (ii) is to collect both the contractual cash flows and cash flows arising from the sale of the assets. If neither of these is applicable, such as where the financial assets are held for trading purposes, then the financial assets are classified as part of an "other” business model and measured at FVTPL. To assess business models, the Group considers risks that affect the performance of the business model; how the managers of the business are compensated; and how the performance of the business model is assessed and reported to Management.

When a financial asset is subject to business models (i) and (ii), the application of the SPPI test is required, as explained below.

Solely Payments of Principal and Interest – SPPI test: Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the Group assesses whether the assets’ cash flows represent SPPI. In making this assessment, the Group considers whether the contractual cash flows are consistent with a basic lending arrangement (i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks, and a profit margin that is consistent with a basic lending arrangement). Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending arrangement, the related asset is classified and measured at FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are SPPI.

Based on these factors, the Group classifies its instruments into one of the following measurement categories. Currently, the Group does not have any financial asset classified as FVTOCI.

Amortized cost:

Financial assets that are held for collection of contractual cash flows where those cash flows represent SPPI, and that are not designated at FVTPL, are measured at amortized cost. The carrying amount of these assets is adjusted by any ECL recognized and measured. Interest income from these financial assets is included in the statement of profit or loss using the effective interest rate method. When estimates of future cash flows are revised, the carrying amount of the respective financial assets or financial liabilities is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are recognized in the statement of profit or loss.

FVTPL:

Financial assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt instrument that is subsequently measured at FVTPL, including any debt instruments designated at fair value, is recognized in profit or loss, and presented in the statement of profit or loss in the period in which it arises.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The Group reclassifies financial assets when and only when its business model for managing those assets changes. The reclassification takes place from the start of the first period following the change. For the years ended December 31, 2020, 2019 and 2018, no changes have occurred.

Classification of financial assets for presentation purposes

Financial assets are classified by nature into the following items in the Consolidated Statements of Financial Position:

Cash and cash equivalents;

Securities;

Collateral for credit card operations;

Derivative financial instruments;

Compulsory deposits at central banks;

Credit card receivables and loans to customers;

Interbank transactions and other financial assets at amortized cost.

Financial liabilities

Financial liabilities are initially classified into the various categories used for management and measurement purposes, unless they have to be presented as liabilities associated with non-current assets held for sale or they relate to hedging derivatives or changes in the fair value of hedged items in portfolio hedges of interest rate risk, which are reported separately.

Financial liabilities are included for measurement purposes in one of the following categories:

Financial liabilities held for trading (at fair value through profit or loss): this category includes financial liabilities incurred for the purpose of generating a profit in the near term from fluctuations in their prices and financial derivatives not designated as hedging instruments.

Financial liabilities designated at fair value through profit or loss: financial liabilities are included in this category when they provide more relevant information, either because this eliminates or significantly reduces recognition or measurement inconsistencies (accounting mismatches) that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases, or because a group of financial liabilities or financial assets and liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided on that basis to the Group’s key management personnel. Liabilities may only be included in this category on the date when they are incurred or originated. This classification is applied to

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

derivatives, financial liabilities held for trading, and other financial liabilities designated as such at initial recognition. The Group has designated the instruments eligible as capital as fair value through profit or loss at its initial recognition. Gains or losses on financial liabilities designated at fair value through profit or loss are presented partially in other comprehensive income (the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability) and partially in profit or loss (the remaining amount of change in the fair value of the liability).

Financial liabilities at amortized cost: financial liabilities, irrespective of their instrumentation and maturity, not included in any of the above-mentioned categories which arise from the ordinary borrowing activities carried on by financial institutions.

Convertible instruments

Convertible instruments, which corresponds to the Company’s senior preferred shares, are separated into the financial liability and equity components based on the terms of the contract. On issuance of the convertible instrument, the fair values of the financial liability components are determined based on their characteristics, using a market rate for an equivalent non-convertible instrument for the contractual obligation to deliver cash and valuation models to the convertible embedded derivative into a variable number of shares. The financial liability due to the obligation to deliver cash is classified as a financial liability measured at amortized cost (net of transaction costs) until it is extinguished on conversion or redemption; and the convertible embedded derivative is measured at fair value and presented as “Derivative financial instruments” in the Consolidated Statements of Financial Position. No gain or loss arises from initially recognizing the components of the convertible instrument separately.

On conversion of convertible instruments, the Company no longer recognizes the liability component and recognizes it as equity, without any effect in the statement of profit and loss. The expenses relating to the measurement of the financial liability components are presented as expenses with convertible instruments in the statement of profit and loss.

Classification of financial liabilities for presentation purposes

Financial liabilities are classified by nature into the following items in the Consolidated Statements of Financial Position:

Derivative financial instruments;

Instruments eligible as capital;

Deposits,

Payables to credit card network;

Borrowings and financing, and securitized borrowings;

Senior preferred shares.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Credit loss allowance of financial assets

The Group calculates an expected credit loss (ECL) for its financial assets. This way, ECLs should account for forecast elements such as undrawn limits and macroeconomic conditions that might affect the Group’s receivables today.

The Group calculates different provisions for the financial instruments classified into:

Stage 1 - no significant increase in credit risk (“SICR”);

Stage 2 - significant increase in credit risk subsequent to recognition;

Stage 3 - credit impaired.

Based on these concepts, Nubank’s approach was to calculate ECL through the probability of default (PD), exposure at default (EAD) and loss given default (LGD) methodology.

Definitions of stages

Stage 1 definition – no significant increase in credit risk

All receivables not classified in stages 2 and 3.

Stage 2 definition – significant increase in credit risk subsequent to recognition

The Group utilizes two guidelines for determining stage 2:

(i)

absolute criteria: the financial asset is more than 30 (thirty) days in arrears, or;

(ii)

relative criteria: in addition to the absolute criteria, the Group analyzes monthly the evolution of the risk of each financial instrument, comparing the current behavior score attributed to a given client with the one given in the moment of recognition of the financial asset. The behavior score considers credit behavior variables, such as delinquency in other products and market data about the client.

The Group has also assumed a cure period for stage 2, where all receivables in arrears between 30 and 89 days at least once in the last six months are classified as stage 2.

Stage 3 definition – credit impaired

Stage 3 definition follows the definition of default:

(i)

The financial asset is more than 90 (ninety) days in arrears; or

(ii)

There are indicatives that the financial asset will not be fully paid without a collateral or financial guarantee being triggered.

Indication that an obligation will not be fully paid includes forbearance of financial instruments that implies advantages being granted to the counterparty as a result of deterioration in the credit quality of the counterparty.

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Consolidated Financial Statements

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A probation period is also considered: customers that were more than 90 days in arrears at the last six months are also classified as stage 3.

Lifetime definition

The maximum period over which expected credit losses shall be measured is the maximum contractual period over which the entity is exposed to credit risk. For loan commitments, this is the maximum contractual period over which an entity has a present contractual obligation to extend credit. Thus for the lending product, the lifetime is straightforward, being equal to the number of months for the remaining loan instalments to be defaulted on.

However, the credit card includes both a loan and an undrawn commitment component and does not have a fixed term or repayment structure. Thus the period over which to measure expected credit losses are based on historical information and experience about the length of time for related default to occur on similar financial instruments following a significant increase in credit risk.

Therefore, a study was conducted for stage 2 credit cards portfolio tracking it over a time period to measure how long it takes for the cumulative default rate to stabilize, understanding this as the moment as the entity is not expected to be exposed to credit risk.

Forward-looking – macroeconomic scenarios

The Group calculates the expected credit loss (ECL) considering the current macroeconomic environment and changes in future macroeconomic scenarios. The macroeconomic forecasts are based on market expectations for Brazilian Gross Domestic Product (“GDP”) for the next two years as disclosed by the Brazilian Central Bank. These forecasts are constantly monitored by the Group.

The Group also builds Pessimistic and Optimistic scenarios, which are based on the variance of future market expectations, information that is also disclosed by the Brazilian Central Bank. The scenarios weighting depends on the Group’s expectations regarding the likelihood of each scenario to happen. The weighting is reviewed whenever there is a substantial change in economic environment that causes different macroeconomics outlooks’ expectation.

The scenarios probability of occurrence and their severity are factored into the estimation of the expected credit loss (ECL) final number. This methodology allows a timelier response to changes in local or global macroeconomic trends.

Measuring ECL

The final ECL was calculated using the following parameters:

PD: it is the likelihood that a receivable will reach default in a time window. For Stage 1 customers, PDs are calculated for the next 12-month period, while for Stage 2, its calculation is done through the lifetime of the instrument. For Stage 3, PD is considered to be 100% since the credit has already defaulted.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

EAD: the discounted balance that, in the event of a default, a customer is expected to have. For revolving facilities, it is a function of the customer’s current limit (total credit exposure) and the expected limit utilization percentage at the moment of default. The expected limit utilization is driven by different customer behavior. In contrast the EAD of a personal loan product is the expected balance value at default after considering the instalments payments behavior.

LGD: the percentage expected not to be recovered from a defaulted balance. This ratio represents the present value of the expected losses divided by the defaulted balances.

Discount rate: it is the average effective interest rate calculated using historical data.

The parameters mentioned above are segmented in homogeneous risk groups, determined by internal scoring models, relying on, among others, customer behavioral information, internal and external, including delinquency and credit utilization.

Governance around ECL

The Group’s Credit Risk Team has developed the current ECL method. Monthly results are monitored and discussed in appropriate forums involving credit businesses and finance teams.

The Group assesses the performance of ECL estimations through the following methods:

●

Back testing: running the model at prior reference dates allows the Group to evaluate how the model’s predictions have paired with actual data.

●

Coverage duration: while back testing, the Group analyzes how many months it is covered for losses while provisioning the ECL.

Post-Model Adjustments

Limitations in the Group's provisions model may be identified, and in these circumstances the management might suggest appropriate adjustments to the Group's provisions by applying post-model adjustments.

Presentation of allowance for ECL in the Consolidated Statement of Financial Position

Loss allowances for ECL are presented in the consolidated statement of financial position as follows:

financial assets measured at amortized cost: as a deduction from the gross carrying amount of the assets;

any excess of the loss allowance over the gross amount is presented as a provision in “Other liabilities”.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Write-off

The Group directly reduces the gross carrying amount of a financial asset when it has no reasonable expectation of recovering it in its entirety or a portion thereof. For unsecured loans, a write-off is made when all internal avenues of collecting the debt have been exhausted, and the debt is handed over to external collection agencies or it has no reasonable expectation of recovering. Significant portion of the write-offs of credit card receivables and loans to customers are done when the client is twelve months in arrears, and all balances are written-off are subject to enforcement activity. Contact is made with customers with the aim of achieving a realistic and sustainable repayment arrangement.

Recoveries

Recoveries of credit losses are registered as an income and offset against credit losses. Recoveries of credit losses are classified in the consolidated statements of profit or loss as “Credit loss allowance expenses”.

Modifications of financial assets

The factors used by the Group to determine whether there is a substantial modification of a contract are: evaluation if there is a renegotiation that is not part of the original contractual terms, change to contractual cash flows and significant extensions of the term of the transaction due to the debtor's financial constraint and significant changes to the interest rate, among others.

The major modifications in the Company’s financial assets correspond to changes in contractual cash flows when credit card receivables, current or revolving, are modified to receivables in installments or changes in the instalments profile in loans to customers. These modifications occur as a result of commercial restructuring activity or due to the credit risk of the borrower, an assessment must be performed to determine whether the terms of the new agreement are substantially different from the terms of the existing agreement. This assessment considers both the change in cash flows arising from the modified terms as well as the change in overall instrument risk profile.

Where terms are substantially different, the existing receivable will be derecognized and a new one will be recognized at fair value, with any difference in valuation recognized immediately within the statement of profit or loss, subject to observability criteria. Where terms are not substantially different, the receivables carrying value will be adjusted to reflect the present value of modified cash flows discounted at the original effective interest rate, with any resulting gain or loss recognized immediately within the statement of profit or loss.

For expected credit losses (ECL) purposes, any modification that implies a forbearance will be recognized as stage 3. A forbearance implies advantages being granted to the counterparty as a result of deterioration in the credit quality of the counterparty. For this definition, the following are considered advantages (I) any material discounts applied to the current obligation and (II) changes in prices that does not represent the customer credit risk profile.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Derivative financial instruments

Derivatives are contracts or agreements whose value is derived from one or more underlying indexes or asset values inherent in the contract or agreement, which require little or no initial net investment and are settled at a future date. Transactions are undertaken in interest rate, cross-currency, and other index related swaps and forwards.

Derivatives are held for risk management purposes and are classified as held for trading unless they are designated as being in a hedge accounting relationship. Derivatives are recognized initially at cost (on the date on which a derivative contract is entered into) and are subsequently re-measured at their fair value. Fair values of exchange-traded derivatives are obtained from quoted market prices. Fair values of over-the-counter derivatives are estimated using valuation techniques, including discounted cash flow and option pricing models.

All derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative, except where netting is permitted. The method of recognizing fair value gains and losses depends on whether derivatives are held for trading or are designated as hedging instruments and, if the latter, the nature of the risks being hedged. Gains and losses from changes in the fair value of derivatives held for trading are recognized in the consolidated statements of profit or loss and included within “Interest and other financial income” or “Interest and other financial expenses”.

Hedge accounting

The Group applies hedge accounting to represent the economic effects of its risk management strategies. At the time a financial instrument is designated as a hedge (i.e., at the inception of the hedge), the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), its risk management objective and strategy for undertaking the hedge. The documentation includes the identification of each hedging instrument and the respective hedged item, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value attributable to the hedged risk is to be assessed. Accordingly, the Group formally assesses, both at the inception of the hedge and on an ongoing basis, whether the hedging derivatives have been and will be highly effective in offsetting changes in the fair value attributable to the hedged risk during the period that the hedge is designated.

A hedge is usually regarded as highly effective if, at inception and throughout its life, the Group can expect, and actual results indicate, that changes in the fair value or cash flow of the hedged items are effectively offset by changes in the fair value or cash flow of the hedging instrument. If, at any point, it is concluded that it is no longer highly effective in achieving its documented objective, hedge accounting is discontinued.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Where derivatives are held for risk management purposes, and when transactions meet the required criteria for documentation and hedge effectiveness, the derivatives may be designated as either: (i) hedges of the change in fair value of recognized assets or liabilities or firm commitments (fair value hedges); (ii) hedges of the variability in highly probable future cash flows attributable to a recognized asset or liability, or a forecast transaction (cash flow hedges); or (iii) a hedge of a net investment in a foreign operation (net investment hedges). The Group applies cash flow hedge accounting in Nu Pagamentos that is exposed to foreign currency risk (dollar and euro) on forecast transactions, as described below.

(a) Cash flow hedge accounting - The effective portion of changes in the fair value of qualifying cash flow hedges are recognized in other comprehensive income in the cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit or loss. Amounts accumulated in equity are reclassified to the statement of profit or loss in the periods in which the hedged item affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized in the statement of profit or loss when the forecast transaction is ultimately recognized in the statement of profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of profit or loss. The Group is exposed to foreign currency risk on forecast transactions, mainly expenses related to the cost of services and administrative expenses.

Offsetting financial assets and liabilities

Financial asset and liability balances, including derivatives, are offset (i.e. reported in the Statements of Financial Position at their net amount) only if the Group entities have a legally enforceable right to set off the recognized amounts and intend either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The Group has not offset financials assets or liabilities.

Fair value

Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. The fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are described below:

Level 1: Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Valuation is based on observable market-based inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Level 3: Valuation is generated from techniques that use significant assumptions, not observable in the market. Valuation techniques include pricing models, discounted cash flow methodologies, or similar techniques.

Valuation techniques include net present value and discounted cash flow models, comparison with similar instruments for which observable market prices exist, Black-Scholes pricing model and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other inputs used in estimating discount rates. The availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determining fair values.

Significant judgment may be required to determine whether certain financial instruments measured at fair value are classified as Level 2 or Level 3. In making this determination, the Group considers all available information that market participants use to measure the fair value of the financial instrument, including observable market data, indications of market liquidity and orderliness, and Group’s understanding of the valuation techniques and significant inputs used. Based upon the specific facts and circumstances of each instrument or instrument category, judgments are made regarding the significance of the Level 3 inputs to the instruments’ fair value measurement in its entirety. If Level 3 inputs are considered significant, the instrument is classified as Level 3. The process for determining fair value using unobservable inputs is generally more subjective and involves a high degree of management judgment and assumptions.

The Group has in place controls to ensure that the fair value measurements are appropriate and reliable, including review and approval of new transaction types, price verification, and review of valuation judgments, methods, models, process controls, and results.

The financial instruments measured at fair value at the reporting date by the level in the fair value hierarchy are disclosed in note 24.

Accounting for acquisitions

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value, if any, or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The Company determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.

When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions as at the acquisition date.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as equity is not re-measured and its subsequent settlement is accounted for within equity.

Revenue recognition

Interest income and gains (losses) on financial instruments

Interest income on loans, credit card operations (revolving and interest-bearing installment transactions) and short-term investments are calculated using the effective interest method, which allocates interest, and direct and incremental fees and costs over the expected lives of the assets. Gains (losses) on financial instruments comprises the changes in fair value recognized in the statement of profit or loss. For the revolving balances, the interest is calculated from the due date of the credit card bill that was not fully paid.

Fee and commission income

Interchange fees

Interchange fee income represents fees to authorize and provide settlement on credit and debit card transactions processed through the Mastercard networks and are determined as a percentage of the total payment processed. Interchange fees, net of rewards revenues, are recognized and measured upon recognition of the transaction with the interchange networks, when performance obligation is considered satisfied. The interchange rates agreed with Mastercard are fixed and it depends on the segment of each merchant. The interchange income is withheld from the amount to be paid to Mastercard.

ii)

Rewards revenues

It comprises revenues related to the Nubank’s Rewards subscription fee and the related interchange fee, initially apportioned in accordance with the relative stand-alone selling prices of the performance obligation assumed, as described below in item “Deferred income”. It is recorded in the income statement when the performance obligation is satisfied, which is when the reward points are redeemed by the customers.

Fee and commission income are shown net of federal revenue taxes.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

iii)

Recharge fees

Recharge fees are recognized at the date the customers acquire the right to the telecom services and comprises the selling price of telecom prepaid cards to customers, net of its acquisition costs.

Expenses recognition

Expenses are recorded in the statement of profit or loss under the accrual method, regardless of receipt or payment.

Cash and cash equivalents

Cash and cash equivalents includes (i) bank deposits on local institutions and abroad and highly liquid short-term investments with original maturities up to 90 days, convertible into a known amount of cash, subject to insignificant risk of change in value and used for cash management of short-term commitments and not for investment and financing purposes; and (ii) balances with central banks which are part of the Group’s liquidity management activities.

Credit card receivables

Credit card receivables are reported at their amortized cost, net of the credit loss allowance.

Chargebacks refer to the amounts disputed by clients generally due to fraud transactions on the Mastercard network process. Losses are recorded based on the estimated amount expected to be reduced from the Group’s client’s receivables when the event impacting the client occurred on activities that the Company is responsible for on the referred network.

Loans to customers

Loans to customers are related to Nubank’s lending products. The personal loans can be paid in 1 to 24 installments, depending on the conditions agreed on Nubank’s app. Loans are reported at their amortized cost, which is the outstanding principal balance, adjusted for any unearned income, unamortized deferred fees and costs, unamortized premiums and discounts, and charge-offs. Loans are reported net of the estimated uncollectible amount (credit loss allowance).

Leasing

The Group as a lessee

For any new contracts entered on or after January 1, 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration”. To apply this definition, the Group assesses whether the contract meets three criteria, which are whether:

the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

the Group has the right to obtain all of the economic benefits from use of the identified asset throughout the period of use substantially, considering its rights within the defined scope of the contract; and

the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.

Measurement and recognition of leases as a lessee

At the lease commencement date, the Group recognizes a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee, and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes on in-substance fixed payments.

When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Property, plant and equipment and intangible assets

Property, plant, and equipment are measured at historical cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset and are depreciated from the date they are available for use. Depreciation is calculated to amortize the cost of items of fixed assets less their estimated residual values using the linear method based on the useful economic life of the items and is reviewed annually and adjusted prospectively if appropriate.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Intangible assets, including software and other assets, are recognized if they arise from contractual or other legal rights or if they are capable of being separated or divided from the Group and sold, transferred, licensed, rented, or exchanged. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives and are evaluated for impairment whenever events or changes in circumstances indicate the carrying amount of the assets.

Directly attributable expenditures related to internally generated intangible assets, mainly software systems, are capitalized from the date on which the entity is able to demonstrate, among others, its technical feasibility, intention to complete, ability to use and can demonstrate probable future economic benefits.

Expenditures for improvements in third-party real estate are amortized over the term of the property lease.

The useful life of fixed and intangible assets items are as follows:

Furniture and other office equipment		10 years
Computer equipment		5 years
Software		5 years
Intangible assets - customer relationship (business combination)		2.25 years

Goodwill

Goodwill represents the excess of the acquisition price of an acquired business over the fair value of assets acquired and liabilities assumed. The Company’s goodwill rose from Cognitect’s business combination, described in note 3a.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for any non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Goodwill is not amortized but is tested for impairment annually or more frequently if adverse circumstances indicate that it is more likely than not that the carrying amount exceeds its fair value. These indicators could include a sustained, significant decline in the Company’s stock price, a decline in expected future cash flows, significant disposition activity, a significant adverse change in the economic or business environment, and the testing for recoverability of a significant asset group, among others.

Impairment of non-financial assets

At each reporting date, or more frequently when events or changes in circumstances dictate, property, plant and equipment and intangible assets with a defined useful life are assessed for indicators of impairment. If indications are present, these assets are subject to an impairment review.

The carrying values of property, plant and equipment, goodwill and other intangible assets should be written down by the amount of any impairment and the loss is recognized in the statement of profit or loss in the period in which it occurs. A previously recognized impairment loss relating to property, plant and equipment may be reversed in part or in full when a change in circumstances leads to a change in the estimates used to determine the property, plant, and equipment recoverable amount. The carrying amount of the property, plant and equipment will only be increased up to the amount that would have been had the original impairment not been recognized.

For the years ended on December 31, 2020, 2019 and 2018, no adjustment to the recoverable amount for non-financial assets was recorded on the financial statements.

Other assets

Other assets includes the amount of assets not recorded in other items, including prepaid expenses and deferred expenses. Deferred expenses are mostly related to certain issuance costs incurred on the credit and debit card operations, as embossing and shipping costs, among others. Card issuance costs are amortized over the card's expected life, adjusted for any cancelations.

Deposits

Corresponds to:

amounts deposited by customers in:

(i)

“Conta do Nubank”, the prepaid account, which is remunerated at 100% of the Brazilian CDI rate. Nubank is required to invest and pledge amounts received in government securities; and

(ii)

Bank Receipt of Deposits ("RDB") and Linked Bank Receipt of Deposits (“RDB-V”), which are also remunerated at 100% of the DI rate. The amounts deposited by customers in these modalities can be used as a financing source for the Group’s operation and may or may not be invested in government securities.

time deposits; and

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other deposits.

For those deposits, the interest expense is recognized using the effective interest rate method.

Payables to credit card network

Payables to credit card network correspond to financial liabilities recognized at amortized cost to be paid through clearing houses to the credit card brand Mastercard and to other clearing houses that are also part of the credit card network.

Borrowings and financing

Correspond to borrowings obtained with third parties that are initially recognized at cost and subsequently at amortized cost using the effective interest rate.

Deferred income

Comprises revenues related to the Nubank Rewards which is initially apportioned, from the interchange and reward fees charged to customers, in accordance with the relative stand-alone selling prices of the performance obligation assumed. The revenues apportioned are recorded as deferred income until it is recorded in the income statement when the performance obligation is satisfied. Deferred income also contains amounts related to the rewards fees which are paid annually by customers until they are earned and are included on the reward revenue apportion calculation.

The Group evaluates the deferred income amount and the assumptions based on developments in redemption patterns, changes to the terms and conditions of the rewards program and other factors.

Provisions and contingent assets and liabilities

Provisions are accounted to cover present obligations at the reporting date arising from past events which could give rise to a loss for the Group, which is considered probable to occur and certain as to its nature but uncertain as to its amount and/or timing.

Contingent liabilities are possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the Group. They include the present obligations of the Company and its subsidiaries when it is not probable that an outflow of resources embodying economic benefits will be required to settle them. The Group does not recognize the contingent liability. Instead, the Group disclose in the financial statements the contingent liability, unless the possibility of an outflow of resources embodying economic benefits is remote.

Contingent assets are possible assets that arise from past events and whose existence is conditional on, and will be confirmed only by, the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Contingent assets are not recognized in the consolidated statement of financial position or in the consolidated statement of profit or loss, but rather are disclosed in the notes, provided that it is probable that these assets will give rise to an increase in resources embodying economic benefits.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

These consolidated financial statements include all the material provisions with respect to which it is considered that it is probable to occur and to be settled. Provisions are quantified on the basis of the best information available on the consequences of the event giving rise to them and are reviewed and adjusted at each reporting period and are fully or partially reversed when such obligations cease to exist or are reduced.

Provision for lawsuits and administrative proceedings

The Company and its subsidiaries are subject to certain court and administrative proceedings arising from the ordinary course of their operations. Those proceedings are classified according to their likelihood of loss as:

Probable: liabilities are recognized on the Consolidated Statements of Financial Position as “provision for lawsuits and administrative proceedings”;

Possible: disclosed in the financial statements, but for which no provision is recognized; and

Remote: require neither provision nor disclosure on the financial statements.

The amount of court escrow deposits is adjusted in accordance with current legislation.

Other liabilities

Other liabilities includes the balances of any other liabilities not included in other categories.

Share premium reserve

Share premium is the difference between the fair value of the consideration receivable for the issue of shares and the nominal value of the shares. The share premium account can only be used for limited purposes.

Share-based payments

The Group maintains a long-term incentive plan, structured through grants of stock options (“SOPs”) and restricted stock units (“RSUs”). The objective is to provide to the Group's employees the opportunity to become shareholders of the Company, creating greater alignment of the interests of key employees with those of shareholders and allowing the Group to attract and retain key employees. These share-based payments are classified as equity-settled share-based payment transactions. The Company also issues awards linked to market conditions ("Awards").

Share-based payments expenses are recorded based on the fair value at the grant date, which is estimated using different valuation models. Significant judgment is required when determining the inputs into the fair value model. The fair values of SOPs, RSUs and Awards granted are recognized as an expense over the period in which they vest (during which specific vesting conditions and milestone events must be met). The vesting requirements are basically related to the passage of time for SOPs and RSUs and market conditions for Awards. The Group recognizes the expenses considering the individual vesting tranches of the SOPs and RSUs.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The Group revises its estimate of the number of SOPs and RSUs that will vest based on the historical experience at each reporting period. The Group recognizes the impact of the revision to original estimates, if any, in the statement of profit or loss and the accumulated loss reserve in Equity. The Awards' expected vesting period is not subsequently revised, and the expenses are recorded irrespective of whether that market condition is satisfied.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are incurred as an expense as the corresponding service is provided. The liability is recognized for the amount expected to be paid for the short-term if there is a present legal or constructive obligation to pay and if the amount can be estimated reliably.

Income taxes, including deferred taxes

Income tax payable on profits, based on the applicable tax law in each jurisdiction, is recognized as an expense in the period in which profits arise. There is no taxation in the Cayman Islands on the income earned by the Company, and, as such, there are no tax impacts at Nu Holdings. The tax expense represents the sum of the income tax currently payable and deferred income tax.

Nu Holdings is incorporated in the Cayman Islands which does not impose corporate income taxes or tax capital gains.

In Brazil, the country that its most significant subsidiaries operate, income tax is comprised of IRPJ (income tax for companies) and CSLL (social contribution on profits), with rates as shown below.

Tax	Rate
Income tax - IRPJ	15% plus a surcharge of 10% on taxable income exceeding R$240 thousand per year
Social contribution - CSLL	15%

Taxable profit differs from net profit as reported in the statement of profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Current tax liability for the current or prior period is measured at the amount expected to be paid to the tax authorities. The Group considers whether it is probable that a taxation authority will accept an uncertain tax treatment. If the Group considers probable that the taxation authority will accept an uncertain tax treatment, the Group determines the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment used or planned to be used in its income tax filings. When the Group concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, the effect of uncertainty is reflected in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates using either of the following methods:

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the most likely amount - the single most likely amount in a range of possible outcomes or

the expected value - the sum of the probability-weighted amounts in a range of possible outcomes.

Deferred income tax is the tax expected to be payable or recoverable on income tax losses available to carry forward and on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all temporary taxable differences, and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the assets may be utilized as they reverse.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realized based on rates enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the statement of profit or loss, except when it relates to items recognized in other comprehensive income or directly in equity, in which case the deferred tax is also recognized in other comprehensive income or directly in equity.

The Group reviews the carrying amount of deferred tax assets at each balance sheet date and reduces it to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax relating to fair value re-measurements of financial instruments accounted for at FVOCI and cash flow hedging instruments is charged or credited directly to other comprehensive income and is subsequently recognized in the statement of profit or loss when the deferred fair value gain or loss is recognized in the statement of profit or loss.

Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where there is both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the year, excluding treasury shares.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

5. Significant accounting judgments, estimates and assumptions

Use of estimates and judgments

The preparation of financial statements requires judgments, estimates, and assumptions from management that affect the application of accounting policies, and reported amounts of assets, liabilities, revenues, and expenses. Actual results may diverge from these estimates; and estimates and assumptions are reviewed continuously. Revisions to the estimates are recognized prospectively.

a) Credit losses on financial instruments

The Group recognizes a loss allowance for expected credit losses on credit cards and loans receivables that represents management’s best estimate of allowance as of each reporting date.

Management performs an analysis of the credit card and loan amounts to determine if credit losses have occurred and to assess the adequacy of the allowance based on historical and current trends as well as other factors affecting credit losses.

Key areas of judgment

The critical judgments made by management in applying the ECL allowance methodology are:

Definition of default;

Forward-looking information used to the projection of macroeconomic scenarios;

Probability weights of future scenarios;

Definition of Significant Increase in Credit Risk and Lifetime; and

Look-back period, used for parameters estimation (PD, EAD and LGD).

Sensitivity analysis

On December 31, 2020, the probability weighted ECL allowance totaled USD243,752 of which USD217,542 related to credit cards operations and USD26,210 to loans. The ECL allowance is sensitive to the methodology, assumptions and estimations underlying its calculation. One key assumption is the probability weights of the macroeconomic scenarios. The table below illustrates the ECL that would have arisen if management had applied a 100% weighting to each macroeconomic scenario.

This sensitivity analysis does not consider the effects of post-model adjustments described below and was performed only for the Brazilian credit card and loan operations.

	Upside		Base case		Downturn

Credit card and lending ECL		233,404		242,571		253,054

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The table below discloses the forecast used in each scenario for the Brazilian ECL allowance:

	Upside			Base case			Downturn

Brazilian GDP growth		6.7	%		3.5	%		0.4	%

Post-model adjustments

Throughout the year, the COVID-19 pandemic has drastically changed credit risk on the Group's portfolio. Credit risk metrics deteriorated in the beginning of the Brazil crisis, reaching its highest levels in April. Since then, the Group has been observing a constant improvement in delinquency and other risk indicators, the effect of which feeds through to the ECL calculated by the models.

The Group’s Management believes there is a risk that these improvements may only be temporary, and the situation could reverse with a possible second COVID-19 wave in Brazil and reductions in future government economic stimulus, a post-model adjustment was deemed necessary to take into account possible future deterioration, as shown below.

	Modeled ECL		Post-model Adjustments		Total ECL

Credit card		168,733		48,809		217,542
Personal loan		23,903		2,307		26,210
Total		192,636		51,116		243,752

As of December 31, 2020, post-model adjustments amounted USD51,116, explained by three main assumptions:

(i)

(ii)

a possible COVID-19 second wave and its future impacts in the population; and

(iii)

compensated by a possible risk reversion to pre-crisis levels.

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b) Share-based payments

The Group measures the costs of transactions with employees eligible to share-based remuneration based on the fair value of the ordinary share on the grant date. Estimating the fair value of share-based payment transactions requires determining the most appropriate valuation model to the ordinary share, options and other awards issued linked to the ordinary shares, which depends on the terms and conditions of each grant. The valuation model of the ordinary shares using one or a combination of a discounted cash flow model (CFM) and a reverse option pricing model (OPM) based substantially on the previous preferred share price transactions. This estimate also requires determining the most appropriate inputs for the SOPs, RSUs and Awards’ valuation models to determine the fair value of the ordinary shares, including the expected term, volatility and dividend yield for the Black-Scholes model applied to the SOPs, achievement of the market conditions to the Awards, and discount rates.

Key areas of judgment

The fair values of the SOPs, RSUs and Awards take into account, among other things, contract terms and observable market data, which includes a number of factors and judgments from management, as disclosed in note 9. In exercising this judgement, a variety of tools are used including proxy observable data, historical data, and extrapolation techniques. Extrapolation techniques consider behavioral characteristics of equity markets that have been observed over time, and for which there is a strong case to support an expectation of a continuing trend in the future. Estimates are calibrated to observable market prices when they become available.

The Group believes its valuation methods are appropriate and consistent with other market participants. Nevertheless, the use of different valuation methods or assumptions, including imprecision in estimating unobservable market inputs, to determine the fair value of the SOPs, RSUs and Awards could result in different estimates of fair value.

c) Provision for lawsuits and administrative proceedings

The Group and its subsidiaries are parties to lawsuits and administrative proceedings. Provisions are recognized for all cases representing reasonably estimated probable losses. The assessment of the likelihood of loss considers available evidence, the hierarchy of laws, former court decisions, and their legal significance, as well as the legal counsel’s opinion.

The provision mainly represents management’s best estimate of the Group’s future liability in respect of civil and labor complaints. Significant judgment by management is required in determining appropriate assumptions, which include the level of complaints expected to be received, of those, the number that will be upheld, and redressed (reflecting legal and regulatory responsibilities, including the determination of liability and the effect of the time bar). The complexity of such matters often requires the input of specialist professional advice in making assessments to produce estimates.

The amount that is recognized as a provision can also be susceptible to the assumptions made in calculating it. This gives rise to a broad range of potential outcomes that require judgment in determining an appropriate provision level. The Group believes its valuation methods of contingent liabilities are appropriate and consistent through the periods. Management believes

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as of December 31, 2020, 2019 and 2018

that, due to the current quantity of claims and the total amount involved, if he used different assumptions that were to be used, no material impact on the provision would occur.

d) Fair value of financial instruments

The fair value of financial instruments, including derivatives that are not traded in active markets and convertible embedded derivatives, is calculated by the Group by using valuation techniques based on assumptions that consider market information and conditions.

Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. Management’s significant judgment may be required to determine whether certain financial instruments measured at fair value are classified as Level 2 or Level 3. For this determination, the Group considers all available information that market participants use to measure the fair value of the financial instrument, including observable market data, indications of market liquidity and orderliness, and the understanding of the valuation techniques and significant inputs used.

More information about the significant unobservable inputs and other information are disclosed in note 24.

6. Income and related expenses

Interest income and gains (losses) on financial instruments

	12/31/2020		12/31/2019			12/31/2018
Interest income – credit card		217,505		214,589			128,522
Interest income - lending		38,926		8,613			-
Interest income – other assets at amortized cost		37,833		56,817			14,168
Interest income and gains (losses) on financial instruments at fair value		88,658		57,832			18,864
Financial assets at fair value		84,819		60,151			18,864
Other		3,839		(2,319	)		-
Total interest income and gains (losses) on financial instruments		382,922		337,851			161,554

The interest income presented above from credit card, lending and other assets at amortized cost represents interest revenue calculated using the effective interest method. Financial

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assets at fair value comprises the interest and the fair value changes on financial assets at fair value.

Fee and commission income

	12/31/2020		12/31/2019		12/31/2018
Interchange fees		254,327		203,871		116,482
Recharge fees		15,287		358		-
Rewards revenue		23,524		21,071		12,628
Late fees		31,237		27,889		17,143
Other fee and commission income		29,836		21,069		11,112
Total fee and commission income		354,211		274,258		157,365

Fee and commission income are presented by fee types that reflect the nature of the services offered by the Group.

Recharge fees comprises the selling price of telecom prepaid cards to customers, net of its acquisition costs.

Interest and other financial expenses

	12/31/2020		12/31/2019		12/31/2018

Interest expense on deposits (i)		87,325		81,049		16,887
Other interest and similar expenses		26,599		28,648		28,530
Interest expenses		113,924		109,697		45,417

(i)

Nubank pays interest equivalent to 100% of the Brazilian CDI rate to all deposits from customers with daily maturity, and from 102% to 125% of the Brazilian CDI rate to time deposits from customers.

Transactional expenses

	12/31/2020		12/31/2019		12/31/2018

Bank slip costs		46,480		31,536		18,235
Rewards expenses		29,624		21,533		10,298
Credit and debit card network costs		24,986		14,703		10,206
Other transactional expenses		25,725		11,544		4,403
Total transactional expenses		126,815		79,316		43,142

Transactional expenses comprise all the costs that are directly attributable to the payment network cycle. Payment network cycle costs include amounts related to data processing, payment scheme license fees, losses from chargeback relating to the credit and debit card transactions, costs relating to rewards program in order to fulfill the use of the points by customers, and other costs related to the connection to the payment.

Credit and debit card network costs are related to the payment programs license, that is a variable fee paid to Mastercard and other card programs to enable communications between

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

network participants, access to specific reports, expenses related to projects involving the development of new functions, operational fixed fees, fees related to chargeback restatements and royalties. The fixed part of the Mastercard fee is presented as “Customer support and operations”.

7. Credit loss allowance expenses

	12/31/2020			12/31/2019			12/31/2018
Credit card receivables		142,568			170,193			118,628
Additions (note 12)		312,446			324,326			150,411
Reversals (note 12)		(151,676	)		(135,344	)		(17,699	)
Recovery		(18,202	)		(18,789	)		(14,084	)

Loans to customers		26,917			4,985			-
Additions (note 13)		41,105			4,985			-
Reversals (note 13)		(14,085	)		-			-
Recovery		(103	)		-			-
Total		169,485			175,178			118,628

8. Operating expenses

	12/31/2020
	Customer support and operations		General and administrative expenses		Marketing expenses		Other income (expenses)

Infrastructure and data processing costs		45,725		29,111		-		-
Credit analysis and collection costs		21,737		12,352		-		-
Customer services		34,075		5,488		-		-
Salaries and associated benefits		13,862		95,060		2,807		-
Credit and debit card issuance costs		6,074		11,822		-		-
Share-based compensation (note 9)		-		56,273		-		-
Specialized services expenses		-		17,429		-		-
Other personnel costs		1,827		10,121		140		-
Depreciation and amortization		79		7,351		-		-
Marketing expenses		-		-		16,479		-
Others		571		21,017		-		9,535
Total		123,950		266,024		19,426		9,535

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as of December 31, 2020, 2019 and 2018

	12/31/2019
	Customer support and operations		General and administrative expenses		Marketing expenses		Other income (expenses)

Infrastructure and data processing costs		56,502		22,460		-		-
Credit analysis and collection costs		11,498		12,364		-		-
Customer services		21,027		4,171		-		-
Salaries and associated benefits		12,395		59,829		2,700		-
Credit and debit card issuance costs		10,350		35,905		-		-
Share-based compensation (note 9)		-		18,511		-		-
Specialized services expenses		-		17,311		-		-
Other personnel costs		2,257		11,066		177		-
Depreciation and amortization		-		5,073		-		-
Marketing expenses		-		-		38,940		-
Others		1,538		13,229		-		19,914
Total		115,567		199,919		41,817		19,914

	12/31/2018
	Customer support and operations		General and administrative expenses		Marketing expenses		Other income (expenses)

Infrastructure and data processing costs		26,043		10,250		-		-
Credit analysis and collection costs		3,987		7,228		-		-
Customer services		1,552		239		-		-
Salaries and associated benefits		9,400		27,359		1,272		-
Credit and debit card issuance costs		3,480		12,340		-		-
Share-based compensation (note 9)		-		9,328		-		-
Specialized services expenses		-		6,571		-		-
Other personnel costs		1,713		3,519		75		-
Depreciation and amortization		-		957		-		-
Marketing expenses		-		-		5,112		-
Others		493		6,887		-		7,331
Total		46,668		84,678		6,459		7,331

Infrastructure and data processing costs includes technology, non-capitalized software costs, and other related costs, primarily related to the cloud infrastructure used by the Group and other software used in the service of the customers. These costs associated exclusively with customer’s transactions are presented as “Customer support and operations” and the remaining costs as “General and Administrative expenses”. Infrastructure and data processing costs also includes costs associated with credit and debit card fees paid to Mastercard on a quarterly basis based on the number of active cards. The software costs related to developing new modules are recognized as intangible assets.

Credit analysis and collection costs includes fees paid to the credit bureaus and costs related to collection agencies. The credit analysis costs associated with the initial credit analysis of an applicant is presented as “General and administrative expenses” and the remaining is presented as “Customer support and operations”.

Customer services includes basically costs with customer services provided by service providers. These costs exclusively related to acquisition of new clients are presented as “General and administrative expenses” and all other is presented as “Customer support and operations”.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Salaries and associated benefit expenses for customer services employees not associated with the acquisition of new clients is presented as “Customer support and operations” and salaries and associated benefit expenses for marketing employees is presented as “Marketing expenses”. All activities from other employees and the activities related to acquisition of new clients performed by customer service employees is presented as “General and administrative expenses”.

Credit and debit card issuance costs includes printing, packing, shipping costs and other costs. Costs related to the first issued card to a customer are initially recorded as a “Deferred expenses” asset included in “Other assets” and then amortized. The amortization related to the first card of customer is presented as “General and administrative expenses” and the remaining costs, including the ones related to subsequent cards, are presented as “Customer support and operations”.

9. Share-based payments

The Group's employee incentives include share settled awards in the form of SOPs and RSUs, offering employees the opportunity to purchase ordinary shares by exercising the options or receiving ordinary shares upon vesting of the RSUs. The cost of the employee services received in respect of the SOPs and RSUs granted is recognized in the statement of profit or loss over the period that employees provide services and according to the vesting conditions. The Group has also issued Awards where it will grant shares upon the achievement of market conditions related to the valuation of the Company. RSU incentive was implemented in 2020 and is expected to be the main incentive going forward.

At the end of 2016, the subsidiary Nu Pagamentos transferred its SOP plan to its indirect Parent Company, Nu Holdings, which became the issuer of the SOPs to all subsidiaries under the program. The strike price of the options was determined in Brazilian reais (R$) until the transfer of the plan to Nu Holdings and thereafter in USD, accompanying the functional currency of the issuer. The plan was initially approved by the Board of Directors of Nu Pagamentos in July 2013. On January 30, 2020, Nu Holdings approved its Omnibus Incentive Plan which included the issuance of restricted stock units (“RSU”).

SOPs and RSUs are issued as part of the performance cycle, without a cliff vesting period, and as a signing bonus generally containing a cliff vesting period of one year. Over time, SOPs and RSUs have been issued with different vesting periods. Once vested, the options can be exercised up to 10 years after the grant date.

The overall cost of the grants is calculated using the number of SOPs and RSUs expected to vest and their fair values at the date of the grant. The number of SOPs and RSUs expected to vest considers the likelihood that service conditions included in the terms of the awards will be met and it is based on historical forfeiture. Failure to meet the vesting condition is treated as a forfeiture, resulting in ceasing the recognition of the expense.

The fair value of SOPs granted is determined using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model takes into account the exercise price of the option, the share price at the grant date, the expected term, the risk-free interest rate, the expected volatility of the share, and other relevant factors. The expected term of the SOPs was

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calculated based as mid-point between the weighted-average time to vesting and the contractual maturity because the Group does not have a significant historical post-vesting activity. The expected term for SOPs with vesting periods of 4 and 5 years is 6.25 and 6.50 years, respectively.

The terms and conditions of the RSUs plans require the Group to withhold shares from the settlement to its employee to settle the employee’s tax obligation. Accordingly, the Group settles the transaction on a net basis by withholding the number of shares with a fair value equal to the monetary value of the employee’s tax obligation and issues the remaining shares to the employee on the vesting date. The employee’s tax obligation associated with the award is calculated substantially based on the expected employee's personal tax rate and the fair value of the shares on the vesting date. In addition, for the countries where the Group is required to pay taxes and social wages charges, the Group recognizes expenses related to corporate taxes and social wages on SOPs and RSUs calculated mainly by applying the taxes rates to the fair value of the ordinary shares at the reporting dates; and presents them as “taxes expenses” in the consolidated statements of profit or loss.

The fair value of the Awards was determined using a Monte Carlo simulation model to estimate its fair value. The Monte Carlo model takes into account the expected time until the market condition is satisfied, the share price at the grant date, the risk-free interest rate, the expected volatility of the share, and other relevant factors. The vesting period reflects the estimate of the length to when the Company reaches the valuation determined as the market condition and will not be subsequently revised. The Company may issue up to 1% of its total share capital, on a fully-diluted basis, as a result of the achievement of the market conditions. The expenses will be recorded during the vesting period irrespective of whether that market condition is satisfied.

The expected life of the stock options was calculated as described above and is not necessarily indicative of exercise patterns that may occur. The expected volatility was calculated, up to 2018, based on a hypothetical peer-leveraged volatility based on available data reflecting small-cap Brazilian companies through the Ishares MSCI Brazil Small-Cap ETF (EWZS”) due to available peers having short trading histories; and after 2019, on a leverage-adjusted peer-based volatility. The volatility reflects the assumption that the historical volatility over a period similar to the life of the stock options or to the Award over the expected time until the market condition is satisfied is indicative of future trends, which may not necessarily be the actual outcome.

The share price used as an input to the Black-Scholes and Monte Carlo models and for the RSUs is calculated using one or a combination of a discounted cash flow model (CFM) and an option pricing model (OPM) based substantially on the previous preferred share price transactions. The dividend expected was determined to be zero because the Company does not expect to pay it in the foreseeable future, and the holders of SOPs, RSUs and Awards do not have rights to dividends. The Company applied a discount for the lack of marketability, calculated based on a Finnerty model, to results of the models to reflect the lack of publicly or active market for selling the shares.

Neither the Company nor any of its subsidiaries, in its financial statement, hedge the risks related to share-based payments derived from the increase in expenses due to the issuance of new grants or appreciation of the share value of the Company.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

There were no modifications to the terms and conditions of the SOPs, RSUs and Award after the grant date.

The movements in the number of SOPs and RSUs is as follows:

SOPs	2020			WAEP (USD)	2019			WAEP (USD)	2018			WAEP (USD)

Outstanding on January 1		51,034,938		0.91		2,728,085		9.19		2,681,398		7.09
Granted during the year		3,376,767		9.92		4,297,030		72.68		225,709		42.18
Exercised during the year		(6,804,750	)	0.24		(999,466	)	3.09		(151,053	)	3.02
Forfeited during the year		(5,091,134	)			(3,984,251	)			(27,969	)
Outstanding on December 31, before forward share split		42,515,821				2,041,398				2,728,085		9.19

Issuance due to 25-for-1 forward share split		-				48,993,540		22.81		-

Outstanding on December 31, after forward share split		42,515,821		1.58		51,034,938		0.91		2,728,085

Exercisable on December 31		30,190,826		0.56		29,883,161		0.39		1,844,773		4.27

RSUs	2020			WAGDFV (USD)

Outstanding on January 1		-
Granted during the year		6,048,335			10.45
Vested during the year		(430,680	)		10.46
Forfeited during the year		(323,201	)
Outstanding on December 31		5,294,454			10.47

WAEP is weighted average exercise price and WAGDF is weighted average grant date fair value.

	12/31/2020		12/31/2019		12/31/2018

SOP, RSU and Awards granted during the year - equity		40,861		18,511		9,328
Total expenses for taxes and social charges, with corresponding increase in liability		9,431		4,968		-
Total liability provision for taxes and social charges		10,334		4,968		-

The following table presents additional information relating to the SOP characteristics and the valuation model:

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020			12/31/2019			12/31/2018

Weighted average fair value of options granted during the year (USD)		7.45			68.90			36.40
Weighted average share fair value of options granted during the year (USD)		10.53			99.90			53.90
Exercised price of options granted during the year (USD)	6.70 to 10.4			20.5 to 166.5			12.9 to 64.2
Expected volatility of options issued (%)	69.5 and 77.9			64.3 and 77.9			58.2 and 64.2
Risk–free interest rate p.y. (%)	1.3 to 1.7			1.2 to 2.6			1.3 to 3.1
Weighted average share price of options exercised during the year		10.6			234.5			21.1

Range of exercise prices remaining at year end (USD)
Zero to USD 3.0		90.8	%		26.7	%		50.0	%
USD 3.1 to USD 6.0		-		-			-
USD 5.1 to USD 10.0		2.3	%		10.8	%		8.6	%
USD 10.1 to USD 50.0		6.9	%		45.6	%		41.4	%
USD 50.1 to USD 100.0		-			15.4	%		-
USD 100.1 and above		-			1.5	%		-

Total cash to be received upon exercise of SOPs outstanding at year end
Vested		16,761			11,690			7,875
Unvested		50,375			34,873			17,204

Weighted remaining contractual life (in years)		6.0			6.9			6.5

The information for 2019 in the table above is provided before the forward share split effects, except for the year end information.

The following table presents additional information relating to the RSUs and Awards characteristics and the valuation model:

	12/31/2020
Most relevant vesting periods for the RSUs grants outstanding
3 years		57.30	%
5 years		35.00	%
Volatility (%)	62.4 to 74.25
Discount for the lack of marketability (%)	21.4 to 23.0
Risk free interest rate (%)	0.41
Awards vesting period	Up to 4.5 years

10. Cash and cash equivalents

	12/31/2020		12/31/2019		12/31/2018
Reverse repurchase agreement in foreign currency		1,783,988		806,656		177,556
Short-term investments		389,399		228,542		-
Bank balances		142,934		128,351		79,612
Short-term investments in foreign currency		18,121		67,655		102,639
Other cash and cash equivalents		9,338		15,362		19,400
Total		2,343,780		1,246,566		379,207

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Cash and cash equivalents are held to meet short-term cash needs. It includes deposits with banks and other short-term highly liquid investments with original maturities of three-month or less and with an immaterial risk of change in value.

The reverse repurchase agreements and short-term investments in foreign currency are mainly in Brazilian Reais, and its average rate of remuneration as of December 31, 2020, 2019 and 2018 is substantially 100% of the Brazilian CDI rate, which represents the average rate at which Brazilian banks were willing to borrow/lend to each other for one day.

11. Financial assets at fair value through profit or loss – securities

	12/31/2020
					Maturities
	Cost		Fair Value		No maturity		Up to 12 months		Over 12 months
Financial treasury bills (LFT) (i)		1,836,519		1,836,139		-		1,470,052		366,087
National treasury bills (LTN) (i)		2,284,701		2,300,676		-		169,873		2,130,803
National treasury notes (NTN) (i)		392		408		-		-		408
Bank receipt of deposits (RDB) (ii)		-		1		-		-		1
Investment funds (iii)		146,394		150,030		150,030		-		-
Bill of credit (LC)		22		23		-		-		23
Total financial instruments		4,268,028		4,287,277		150,030		1,639,925		2,497,322

	12/31/2019										12/31/2018
					Maturities
	Cost		Fair Value		No maturity		Up to 12 months		Over 12 months		Fair Value

Financial treasury bills (LFT) (i)		1,681,010		1,680,994		9,573		240,336		1,431,085		541,775
National treasury bills (LTN) (i)		543,463		543,463	-		-			543,463	-
Certificate of bank deposits (CDB)		-		-		-		-		-		166
National treasury notes (NTN) (i)		511		527	-			527	-			-
Bank receipt of deposits (RDB) (ii)		230		230	-		-			230		-
Investment funds (iii)		12,431		12,431		12,431	-		-			28,212
Bill of credit (LC)		28		28	-		-			28		28
Total financial instruments		2,237,673		2,237,673		22,004		240,863		1,974,806		570,181

(i)

Includes USD1,534,858 (USD1,848,668 in 12/31/2019 and USD530,981 in 12/31/2018) held by the subsidiaries for regulatory purposes, required to be maintained with the Brazilian Central Bank. It also includes Brazilian government securities margins pledged by the Group in transactions on the stock exchange (USD112,412 in 12/31/2020 and USD76,754 in 12/31/2019). The LFTs, LTNs and NTNs have an average return of 89.5% of the Brazilian CDI rate in 2020 (97% in 12/31/2019 and 100% in 12/31/2018) and are classified as Level 1 in the fair value hierarchy, as described on note 24.

(ii)

Refers to CDBs and RDBs with floating interest rates, classified as Level 2 in the fair value hierarchy, as described on note 24.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

(iii)

Refers to investments in fund quotas that invest mostly in Brazilian sovereign bonds. The fair value of these investments is determined based on the quota value, and these instruments are classified as level 2 in the fair value hierarchy. The assets held by those funds are classified as level 1. Such investments are indexed to the Brazilian CDI rate and had an average return of 89.5% of the Brazilian CDI rate in 12/31/2020 (97% in 12/31/2019 and 12/31/2018).

12. Credit card receivables

a) Breakdown of receivables

	12/31/2020			12/31/2019			12/31/2018
Receivables - current (i)		1,475,417			1,424,758			835,010
Receivables - installments (i)		1,443,793			1,316,235			766,444
Receivables - revolving (ii)		199,662			269,428			168,400
Total receivables		3,118,872			3,010,421			1,769,854

Credit card ECL allowance
Presented as deduction of receivables		(209,965	)		(223,897	)		(146,027	)
Presented as liability		(7,577	)		-			-
Total credit card ECL allowance		(217,542	)		(223,897	)		(146,027	)
Receivables, net		2,901,330			2,786,524			1,623,827
Total receivables presented as assets		2,908,907			2,786,524			1,623,827

(i)

Current receivables are related to purchases made by customers due on the next credit card billing date. “Receivables – installments” is related to purchases in installments (“parcelado” in Brazil) which are financed by the merchant. Under this product, the cardholder makes a purchase in up to 12 equal monthly installments. The cardholder’s credit limit is initially reduced by the total amount and the installments become due and payable on the cardholder’s subsequent monthly credit card statements. The Group makes the corresponding payments to the credit card network (see note 18) following a similar schedule. As receipts and payments are aligned, the Group does not incur significant financing costs with this product, however it is exposed to the credit risk of the cardholder as it is obliged to make the payments to the credit card network even if the cardholder does not pay. “Receivables – installments” also includes the amounts of credit card bills not fully paid by the customers and that have been converted into payments in installments with a fixed interest rate (“fatura parcelada”).

(ii)

Revolving receivables are amounts due from customers that have not paid in full their credit card bill. Customers may request to convert these receivables in loans to be paid in installments. In accordance with Brazilian regulation, revolving balances that are outstanding for more than 2 months have to be mandatorily converted into “fatura parcelada” - a type of installment loan which is settled through the customer’s monthly credit card bills.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Breakdown by maturity

	12/31/2020					12/31/2019					12/31/2018
	Amount		%			Amount		%			Amount		%

In arrears		30,554		1	%		189,786		7	%		119,000		7	%
<= 30 days		1,534,759		49	%		1,303,527		43	%		794,126		45	%
30 < 60 days		578,941		19	%		657,202		21	%		356,895		20	%
> 60 days		974,618		31	%		859,906		29	%		499,833		28	%
Total		3,118,872		100	%		3,010,421		100	%		1,769,854		100	%

Credit loss allowance - by stages and stage 2 trigger

As of December 31, 2020, the provision for credit losses totaled USD217,542 (USD223,897 in 12/31/2019 and USD146,027 in 12/31/2018). The provision is provided by a model estimation, which is sensitive to the methods, assumptions, and risk parameters underlying its calculation.

The amount that the provision for losses represents in comparison to the Group’s total receivables is also monitored, in order to anticipate trends that could indicate credit risk increases. This metric is considered a key risk indicator. It is monitored according to the Group's RAS - Risk Appetite Statement, supporting the decision-making process and being discussed in the primary credit forums along with the Group.

Distribution within the stages as of December 31, 2020 had a greater concentration in stage 1 portfolio if compared to December 31, 2019 and 2018.

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Stage 1		2,799,999		89.8	%		79,296		36.5	%		2.8	%

Stage 2		202,673		6.5	%		60,391		27.8	%		29.8	%
Absolute Trigger (Days Late)		50,375		24.9	%		22,172		36.7	%		44.0	%
Relative Trigger (PD deterioration)		152,298		75.1	%		38,219		63.3	%		25.1	%

Stage 3		116,200		3.7	%		77,855		35.7	%		67.0	%
Total		3,118,872		100	%		217,542		100	%		7.0	%

	12/31/2019
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Stage 1		2,484,556		82.5	%		68,437		30.6	%		2.8	%

Stage 2		389,734		13.0	%		75,531		33.7	%		19.4	%
Absolute Trigger (Days Late)		82,050		21.1	%		20,277		26.8	%		24.7	%
Relative Trigger (PD deterioration)		307,684		78.9	%		55,254		73.2	%		18.0	%

Stage 3		136,131		4.5	%		79,929		35.7	%		58.7	%
Total		3,010,421		100	%		223,897		100	%		7.4	%

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2018
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Stage 1		1,452,751		82.0	%		46,688		32.0	%		3.2	%

Stage 2		229,401		13.0	%		48,592		33.3	%		21.2	%
Absolute Trigger (Days Late)		54,353		23.7	%		14,030		28.9	%		25.8	%
Relative Trigger (PD deterioration)		175,048		76.3	%		34,562		71.1	%		19.7	%

Stage 3		87,702		5.0	%		50,747		34.7	%		57.8	%
Total		1,769,854		100	%		146,027		100	%		8.3	%

As of December 31, 2020, 2019 and 2018, most of the stage 2 exposure comes from contracts that had a significant increase in their PDs. Stage 2 exposure distribution between absolute and relative triggers is relatively the same on December 31, 2020, 2019 and 2018.

Credit loss allowance - by credit quality vs. stages

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Strong (PD < 5%)		2,524,909		81.0	%		40,629		18.7	%		1.6	%
Stage 1		2,523,792		100.0	%		40,540		99.8	%		1.6	%
Stage 2		1,117		0.0	%		89		0.2	%		8.0	%

Satisfactory (5% <= PD <= 20%)		320,492		10.3	%		39,089		18.0	%		12.2	%
Stage 1		244,979		76.4	%		28,645		73.3	%		11.7	%
Stage 2		75,513		23.6	%		10,444		26.7	%		13.8	%

Higher Risk (PD > 20%)		273,471		8.7	%		137,824		63.3	%		50.4	%
Stage 1		31,228		11.4	%		10,111		7.3	%		32.4	%
Stage 2		126,043		46.1	%		49,858		36.2	%		39.6	%
Stage 3		116,200		42.5	%		77,855		56.5	%		67.0	%
Total		3,118,872		100	%		217,542		100	%		7.0	%

	12/31/2019
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Strong (PD < 5%)		2,133,504		70.9	%		27,386		12.2	%		1.3	%
Stage 1		2,133,504		100.0	%		27,386		100.0	%		1.3	%

Satisfactory (5% <= PD <= 20%)		467,070		15.5	%		41,384		18.5	%		8.9	%
Stage 1		306,326		65.6	%		29,200		70.6	%		9.5	%
Stage 2		160,744		34.4	%		12,184		29.4	%		7.6	%

Higher Risk (PD > 20%)		409,847		13.6	%		155,127		69.3	%		37.8	%
Stage 1		44,726		10.9	%		11,851		7.7	%		26.5	%
Stage 2		228,990		55.9	%		63,347		40.8	%		27.7	%
Stage 3		136,131		33.2	%		79,929		51.5	%		58.7	%
Total		3,010,421		100	%		223,897		100	%		7.4	%

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2018
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio (%)
Strong (PD < 5%)		1,117,250		63.1	%		16,438		11.3	%		1.5	%
Stage 1		1,117,250		100.0	%		16,438		100.0	%		1.5	%

Satisfactory (5% <= PD <= 20%)		405,148		22.9	%		31,248		21.4	%		7.7	%
Stage 1		311,431		76.9	%		23,607		75.5	%		7.6	%
Stage 2		93,717		23.1	%		7,641		24.5	%		8.2	%

Higher Risk (PD > 20%)		247,456		14.0	%		98,341		67.3	%		39.7	%
Stage 1		24,070		9.7	%		6,643		6.8	%		27.6	%
Stage 2		135,684		54.8	%		40,951		41.6	%		30.2	%
Stage 3		87,702		35.5	%		50,747		51.6	%		57.9	%
Total		1,769,854		100	%		146,027		100	%		8.3	%

There is a significant concentration of receivables at stage 1 based on credit quality. Receivables with satisfactory risk are distributed between stages 1 and 2, mostly at stage 1.

Defaulted assets (stage 3) are classified at higher risk, which also accounts for a large amount of stage 2 exposure. Stage 1 receivables classified as higher risk are those customers with low credit risk scores.

Coverage ratios for each risk and stage classification are higher on December 31, 2020 when compared with 2019 and 2018. This is a result of the current and expected impacts of the crisis due to COVID-19, see section f) Credit loss allowance - COVID 19 Impacts.

Credit loss allowance - changes

The following tables show reconciliations from the opening to the closing balance of the credit loss allowance by the stages of the financial instruments.

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		68,437			75,531			79,929			223,897
Transfers from Stage 1 to Stage 2		(4,252	)		4,252			-			-
Transfers from Stage 2 to Stage 1		27,974			(27,974	)		-			-
Transfers to Stage 3		(3,929	)		(11,252	)		15,181			-
Transfers from Stage 3		246			129			(375	)		-
Write-offs		-			-			(116,856	)		(116,856	)
Net increase of loss allowance		6,154			36,643			117,973			160,770
Effect of changes in exchange rates (OCI)		(15,334	)		(16,938	)		(17,997	)		(50,269	)
Loss allowance at end of the year		79,296			60,391			77,855			217,542

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2019
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		46,688			48,592			50,747			146,027
Transfers from Stage 1 to Stage 2		(6,217	)		6,217			-			-
Transfers from Stage 2 to Stage 1		15,397			(15,397	)		-			-
Transfers to Stage 3		(4,197	)		(12,328	)		16,525			-
Transfers from Stage 3		181			174			(355	)		-
Write-offs		-			-			(103,680	)		(103,680	)
Net increase of loss allowance		18,902			50,780			119,300			188,982
Effect of changes in exchange rates (OCI)		(2,317	)		(2,507	)		(2,608	)		(7,432	)
Loss allowance at end of the year		68,437			75,531			79,929			223,897

	12/31/2018
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		33,944			34,452			35,551			103,947
Transfers from Stage 1 to Stage 2		(3,954	)		3,954			-			-
Transfers from Stage 2 to Stage 1		9,294			(9,294	)		-			-
Transfers to Stage 3		(2,869	)		(6,406	)		9,275			-
Transfers from Stage 3		79			192			(271	)		-
Write-offs		-			-			(71,875	)		(71,875	)
Net increase of loss allowance		16,221			31,884			84,607			132,712
Effect of changes in exchange rates (OCI)		(6,027	)		(6,190	)		(6,540	)		(18,757	)
Loss allowance at end of the year		46,688			48,592			50,747			146,027

The following table presents changes in the gross carrying amount of the credit card portfolio to help explain their effects to the changes in the credit loss allowance for the same portfolio as discussed above. “Net increase of gross carrying amount” includes acquisitions, payments, and interest accruals.

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		2,484,556			389,734			136,131			3,010,421
Transfers from Stage 1 to Stage 2		(79,734	)		79,734			-			-
Transfers from Stage 2 to Stage 1		162,232			(162,232	)		-			-
Transfers to Stage 3		(43,582	)		(49,951	)		93,533			-
Transfers from Stage 3		435			226			(661	)		-
Write-offs		-			-			(116,856	)		(116,856	)
Net increase of gross carrying amount		839,461			31,990			34,640			906,091
Effect of changes in exchange rates (OCI)		(563,369	)		(86,828	)		(30,587	)		(680,784	)
Gross carrying amount at end of the year		2,799,999			202,673			116,200			3,118,872

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2019
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		1,452,751			229,401			87,702			1,769,854
Transfers from Stage 1 to Stage 2		(131,443	)		131,443			-			-
Transfers from Stage 2 to Stage 1		87,250			(87,250	)		-			-
Transfers to Stage 3		(47,879	)		(45,940	)		93,819			-
Transfers from Stage 3		311			299			(610	)		-
Write-offs		-			-			(103,680	)		(103,680	)
Net increase of gross carrying amount		1,203,286			174,355			63,291			1,440,932
Effect of changes in exchange rates (OCI)		(79,720	)		(12,574	)		(4,391	)		(96,685	)
Gross carrying amount at end of the year		2,484,556			389,734			136,131			3,010,421

	12/31/2018
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		951,143			153,158			58,469			1,162,770
Transfers from Stage 1 to Stage 2		(76,581	)		76,581			-			-
Transfers from Stage 2 to Stage 1		47,168			(47,168	)		-			-
Transfers to Stage 3		(31,294	)		(25,853	)		57,147			-
Transfers from Stage 3		134			325			(459	)		-
Write-offs		-			-			(71,875	)		(71,875	)
Net increase of gross carrying amount		739,670			100,665			55,255			895,590
Effect of changes in exchange rates (OCI)		(177,489	)		(28,307	)		(10,835	)		(216,631	)
Gross carrying amount at end of the year		1,452,751			229,401			87,702			1,769,854

f) Credit loss allowance – COVID-19 impacts

In March 2020, the Brazilian macroeconomic expectations experienced a reversal from an improving scenario to a downturn due to the first impacts of COVID-19. In turn, the credit risk metrics reached the highest negative levels during April 2020 due to the first economic impacts from the pandemic, increasing the credit loss allowance.

The Group continues to monitor the crisis and the government responses to the crisis and its effects on changes in Nubank’s customer behavior.

13. Loans to customers

Breakdown of receivables

	12/31/2020			12/31/2019
Lending to individuals		200,904			63,014
Loan ECL allowance		(26,210	)		(4,990	)
Total		174,694			58,024

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Breakdown by maturity

The following table shows loans to customers by maturity on December 31, 2020 and 2019.

	12/31/2020
	Overdue		%			Less than 1 year		%			Between 1 and 5 years		%

Installment loans to individuals		7,369		3	%		170,077		85	%		23,458		12	%
Total		7,369		3	%		170,077		85	%		23,458		12	%

Of which:		7,369		3	%		170,077		85	%		23,458		12	%
Fixed interest rate		7,369		3	%		170,077		85	%		23,458		12	%

	12/31/2019
	Overdue		%			Less than 1 year		%			Between 1 and 5 years		%

Installment loans to individuals		1,852		3	%		51,284		81	%		9,878		16	%
Total		1,852		3	%		51,284		81	%		9,878		16	%

Of which:		1,852		3	%		51,284		81	%		9,878		16	%
Fixed interest rate		1,852		3	%		51,284		81	%		9,878		16	%

Credit loss allowance - by stages and stage 2 trigger

The tables below show the credit loss allowance by stages as of December 31, 2020 and 2019.

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Stage 1		168,744		84.0	%		10,532		40.2	%		6.2	%

Stage 2		22,634		11.3	%		7,136		27.2	%		31.5	%
Absolute Trigger (Days Late)		3,819		16.9	%		2,873		40.3	%		75.2	%
Relative Trigger (PD deterioration)		18,815		83.1	%		4,263		59.7	%		22.7	%

Stage 3		9,526		4.7	%		8,542		32.6	%		89.7	%
Total		200,904		100.0	%		26,210		100.0	%		13.0	%

	12/31/2019
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Stage 1		44,513		70.6	%		1,300		26.1	%		2.9	%

Stage 2		16,335		25.9	%		2,072		41.5	%		12.7	%
Absolute Trigger (Days Late)		2,414		14.8	%		401		19.4	%		16.6	%
Relative Trigger (PD deterioration)		13,921		85.2	%		1,671		80.6	%		12.0	%

Stage 3		2,166		3.5	%		1,618		32.4	%		74.7	%
Total		63,014		100.0	%		4,990		100.0	%		7.9	%

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The increase in coverage ratios per stage follows the risk expectations update abovementioned and also the uncertainty regarding the COVID-19 crisis, with a possible future deterioration expected by the Group being embedded in the post-model adjustment (note 5).

d) Credit loss allowance - by credit quality vs stages

The majority of personal loans portfolio is classified as strong risk, with an average coverage ratio of 1.4 % as of December 31, 2020 and 2019.

	12/31/2020
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Strong (PD < 5%)		66,754		33.2	%		947		3.6	%		1.4	%
Stage 1		66,607		99.8	%		939		99.2	%		1.4	%
Stage 2		147		0.2	%		8		0.8	%		5.4	%

Satisfactory (5% <= PD <= 20%)		99,909		49.7	%		8,416		32.1	%		8.4	%
Stage 1		97,421		97.5	%		8,175		97.1	%		8.4	%
Stage 2		2,488		2.5	%		241		2.9	%		9.7	%

Higher Risk (PD > 20%)		34,241		17.1	%		16,847		64.3	%		49.2	%
Stage 1		4,716		13.8	%		1,418		8.4	%		30.1	%
Stage 2		19,998		58.4	%		6,888		40.9	%		34.4	%
Stage 3		9,527		27.8	%		8,541		50.7	%		89.7	%
Total		200,904		100.0	%		26,210		100.0	%		13.0	%

	12/31/2019
	Gross					Loss					Coverage
	Exposures		%			Allowance		%			Ratio
Strong (PD < 5%)		32,891		52.2	%		462		9.3	%		1.4	%
Stage 1		32,891		100	%		462		100.0	%		1.4	%

Satisfactory (5% <= PD <= 20%)		12,053		19.1	%		645		12.9	%		5.4	%
Stage 1		8,388		69.6	%		340		52.7	%		4.1	%
Stage 2		3,665		30.4	%		305		47.3	%		8.3	%

Higher Risk (PD > 20%)		18,070		28.7	%		3,883		77.8	%		21.5	%
Stage 1		3,234		17.9	%		498		12.8	%		15.4	%
Stage 2		12,670		70.1	%		1,767		45.5	%		13.9	%
Stage 3		2,166		12.0	%		1,618		41.7	%		74.7	%
Total		63,014		100	%		4,990		100	%		8	%

e) Credit loss allowance - changes

The following tables show reconciliations from the opening to the closing balance of the credit loss allowance by stages of the financial instruments. The explanation of each stage and the basis for determining transfers due to changes in credit risk is set out in note 4.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Loss allowance at beginning of year		1,300			2,072			1,618			4,990
Transfers from Stage 1 to Stage 2		(54	)		54			-			-
Transfers from Stage 2 to Stage 1		346			(346	)		-			-
Transfers to Stage 3		(164	)		(176	)		340			-
Transfers from Stage 3		-			6			(6	)		-
Write-offs		-			-			(4,525	)		(4,525	)
Net increase of loss allowance		9,462			6,030			11,528			27,020
Effect of changes in exchange rates (OCI)		(358	)		(504	)		(413	)		(1,275	)
Loss allowance at end of the year		10,532			7,136			8,542			26,210

	12/31/2019
	Stage 1		Stage 2		Stage 3		Total

Loss allowance at beginning of the year		-		-		-		-
Net increase of loss allowance		1,299		2,070		1,616		4,985
Effect of changes in exchange rates (OCI)		1		2		2		5
Loss allowance at end of the year		1,300		2,072		1,618		4,990

The following table further explains changes in the gross carrying amount of the loan portfolio to help explain their significance to the changes in the loss allowance for the same portfolio as discussed above. “Net increase of gross carrying amount” Includes the principal issuances net of payments or interest recognized net of payment.

	12/31/2020
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		44,513			16,335			2,166			63,014
Transfers from Stage 1 to Stage 2		(1,951	)		1,951			-			-
Transfers from Stage 2 to Stage 1		2,621			(2,621	)		-			-
Transfers to Stage 3		(2,997	)		(1,314	)		4,311			-
Transfers from Stage 3		-			8			(8	)		-
Write-offs		-			-			(4,525	)		(4,525	)
Net increase of gross carrying amount		137,483			12,013			8,123			157,619
Effect of changes in exchange rates (OCI)		(10,925	)		(3,738	)		(541	)		(15,204	)
Gross carrying amount at end of the year		168,744			22,634			9,526			200,904

	12/31/2019
	Stage 1			Stage 2			Stage 3			Total

Gross carrying amount at beginning of year		-			-			-			-
Net increase of loss allowance		45,486			16,692			2,213			64,391
Effect of changes in exchange rates (OCI)		(973	)		(357	)		(47	)		(1,377	)
Gross carrying amount at end of the year		44,513			16,335			2,166			63,014

f) Credit loss allowance – COVID-19 impacts

As a result of an unprecedented health crisis in the first quarter of 2020, followed by a deterioration in credit risk indicators, the Group adopted a more conservative approach - restricting its loan originations credit policies, which led to a reduction in the total lending portfolio balance. Consequently, portfolios migrated to riskier stages, increasing loan allowances coverage ratios.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Social distancing measures, followed by lockdowns, unfolded new behaviors in credit, culminating in a risk reduction, being captured by the Group’s models which allowed a steady recovery of originations.

Meanwhile, restructurings, in the form of loan extensions, were offered in response to the adverse conditions caused by the pandemic, all of which classified as stage 2, contributing to a higher concentration of loans in this stage on December 31, 2020 when compared to December 31, 2019.

The Group continues to monitor the crisis and the government responses and its effects on changes in Nubank’s personal loan customer behavior.

14. Other assets

	12/31/2020		12/31/2019		12/31/2018

Taxes recoverable		31,702		22,051		14,290
Deferred expenses (i)		24,953		-		-
Judicial deposits (note 20)		16,440		21,177		13,628
Advances to suppliers and employees		10,192		1,546		1,448
Prepaid expenses		8,301		10,428		5,505
Other assets		31,907		12,729		1,102
Total		123,495		67,931		35,973

(i)

Refers to credit card issuance costs that includes printing, packing, and shipping costs, among others. The expenses are amortized based on the card’s life, adjusted for any cancelations. Prior to 2020, these costs were not deferred because the Group changed customers’ credits cards more frequently such that the estimated lifetime of the client was lower (less than 2 years).

15. Derivative financial instruments

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020							12/31/2019							2018
	Notional		Fair values					Notional		Fair values					Fair values
	amount		Assets		Liabilities			amount		Assets		Liabilities			Liabilities
Derivatives at fair value through profit or loss
Interest rate contracts - Future		2,964,368		5		(2,421	)		1,169,701		80		(1,376	)		-
Exchange rate contracts - Future		65,961		27		(217	)		75,888		-		(388	)		(1	)
Interest rate contracts - Swap		10,214		48		-			13,175		161		-			-

Derivatives held for hedging
Designated as cash flow hedges
Exchange rate contracts - Future		44,140		-		(145	)		53,444		-		(277	)		-

Embedded derivatives in convertible instruments (note 22)		-		-		(72,521	)		-		-		-			-
Total		3,084,683		80		(75,304	)		1,312,208		241		(2,041	)		(1	)

Futures contracts are traded on the Brazilian stock exchange (B3 S.A. - Brasil, Bolsa, Balcão or “B3”), with B3 itself as a counterparty.

The table below shows the breakdown by maturity of the notional amounts:

12/31/2020

Up to 3 months

3 to 12 months

Over 12

months

Total

Assets

Interest rate contracts - Future

368,048

143,381

3,488

514,917

Exchange rate contracts - Future

110,101

Total assets

478,149

143,381

3,488

625,018

Liabilities

Interest rate contracts - Future

39,393

242,931

2,167,127

2,449,451

Interest rate contracts - Swap

10,214

Total liabilities

39,393

242,931

2,177,341

2,459,665

Total

517,542

386,312

2,180,829

3,084,683

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

12/31/2019

Up to 3 months

3 to 12 months

Over 12

months

Total

Assets

Interest rate contracts - Future

409,120

9,348

81,349

499,817

Exchange rate contracts - Future

129,332

Total assets

538,452

9,348

81,349

629,149

Liabilities

Interest rate contracts - Future

31,436

74,519

563,929

669,884

Interest rate contracts - Swap

13,175

Total liabilities

31,436

74,519

577,104

683,059

Total

569,888

83,867

658,453

1,312,208

Analysis of derivatives designated as hedges

Hedges of foreign currency risk

The Group is exposed to foreign currency risk on forecast transactions expenses, primarily related to the cloud infrastructure and certain software licenses used by Nubank. The Group managed its exposures to the variability in cash flows of foreign currency forecast transactions to movements in foreign exchange rates by entering foreign exchange contracts (exchange futures). These instruments are entered into to match the cash flow profile of the estimated forecast transaction. They are exchange traded and settled on a daily basis.

Sources of effectiveness are differences in the amount and timing of forecast and actual payment of expenses.

	12/31/2020			12/31/2019


Balance at beginning of the year		1			-
Fair value change recognized in OCI during the year		8,302			1,491
Total amount reclassified from cash flow hedge reserve to income statement during the year		(8,223	)		(1,489	)
to "Customer support and operation"		(5,480	)		(943	)
to "General and administrative expenses"		(4,925	)		(597	)
Effect of changes in exchange rates (OCI)		2,182			51
Deferred income taxes		(31	)		(1	)
Balance at end of the year		49			1

Main future transactions and commitments of the hedge accounting object:

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

12/31/2020

12/31/2019

Up to 3 months

3 to 12 months

Total

Expected foreign currency transactions

11,678

34,721

46,399

20,166

Total

11,678

34,721

46,399

20,166

16. Instruments eligible as capital

	12/31/2020		12/31/2019
Financial liabilities at fair value through profit or loss
Instruments eligible as capital		15,492		22,084
Total		15,492		22,084

In June 2019, the subsidiary Nu Financeira issued a subordinated financial letter in the amount equivalent to USD18,824, which is Tier 2 capital upon approval of the Brazilian Central Bank in September 2019. The note bears a fixed interest rate of 12.8% and maturity in 2029, callable in 2024.

The Group designated the instruments eligible as capital as fair value through profit or loss at its initial recognition. The losses of fair value changes arising from its own credit risk in the amount of USD219, in 2020, were recorded in other comprehensive income (USD249 in 2019). All other fair value changes and interests in the amount of USD1,984 in 2020 (USD3,491 in 2019) were recognized in profit or loss. The Group entered derivatives contracts to hedge the exposure to the fixed interest rate.

	12/31/2020			12/31/2019
Balance at beginning of the year		22,084		-
New issuances		-			18,824
Interest accrued		1,689			1,306
Fair value changes		(3,673	)		2,185
Own credit transferred to OCI		219			249
Effect of changes in exchange rates (OCI)		(4,827	)		(480	)
Balance at end of the year		15,492			22,084

17. Financial liabilities at amortized cost – deposits

	12/31/2020		12/31/2019		12/31/2018

Deposits by customers (i)
Deposits in electronic money ("Conta do Nubank")		1,029,284		1,323,592		628,683
Bank receipt of deposits (RDB)		4,445,705		1,015,789		-
Bank receipt of deposits (RDB-V)		90,360		353,777		-
Time deposit (ii)		19,513		-		-
Total		5,584,862		2,693,158		628,683

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

(i)

In June 2019, Nu Financeira's Bank Receipt of Deposits (“RDB”) was launched as an investment option in “Conta do Nubank”. Different from the deposits in electronic money, Nubank can use the resources from RDB’s deposits in other operations and as fund to the lending and credit card. RDB’s deposits have a special guarantee from the Brazilian Deposit Guarantee Fund (“FGC”). Deposits in electronic money through “Conta do Nubank" and part of the RDBs correspond to customer deposits on-demand with daily maturity made in the prepaid account, bearing interest equivalent to 100% of the Brazilian CDI rate, denominated in Brazilian Reais. In November 2019, Nu Financeira launched another type of RDB, the Linked Bank Receipt of Deposit (“RDB-V”), which has the same remuneration characteristics and daily liquidity as RDB.

(ii)

In July 2020, the subsidiary Nu Financeira issued a time deposit instrument (“DPGE”), also with a special guarantee from FGC, without the sale of receivables, in the amount of R$ 100 million (equivalent to USD 19 million), remunerated at the Brazilian DI rate + 1% per annum and maturity date on July 7, 2022.

Breakdown

	12/31/2020						12/31/2019				12/31/2018
	Up to 12 months		Over 12 months		Total		Up to 12 months		Total		Up to 12 months		Total
.
Deposits by customers		5,535,536		29,813		5,565,349		2,693,158		2,693,158		628,683		628,683
Deposits in electronic money ("Conta do Nubank")		1,029,284				1,029,284		1,323,592		1,323,592		628,683		628,683
Bank receipt of deposits (RDB)		4,415,892		29,813		4,445,705		1,015,789		1,015,789		-		-
Bank receipt of deposits (RDB-V)		90,360		-		90,360		353,777		353,777		-		-
Time deposit		-		19,513		19,513		-		-		-		-
Total		5,535,536		49,326		5,584,862		2,693,158		2,693,158		628,683		628,683

18. Financial liabilities at amortized cost – payables to credit card network

12/31/2020

12/31/2019

12/31/2018

Payables to credit card network

Payables to credit card network (i)

3,329,879

2,976,505

1,675,853

Payables to clearing houses

1,379

Total

3,331,258

2,976,505

1,675,853

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

(i)

Corresponds to the amount payable to Mastercard brand related to credit card transactions. This amount is settled according to the transaction installments, substantially in up to 27 days for Brazilian transactions with no installments and 1 business day for international transactions. For Mexican and Colombian operation, the amounts are settled in 1 business day. The segregation of the settlement is demonstrated on the table below:

Payables to credit card network	12/31/2020

Up to 30 days		1,703,826
30 to 90 days		885,367
More than 90 days		740,686
Total		3,329,879

Collateral for credit card

As of December 31, 2020, the Group has USD90,761 (USD162,777 in 12/31/2019 and USD 85,291 in 12/31/2018) of security deposits granted in favor of Mastercard. These securities are measured at fair value through profit and loss and are held as collateral for the amounts payable to the network and can be replaced by other securities with similar characteristics. The average remuneration rate of those deposits was 0.34% p.m. in 12/31/20 (1.4% in 12/31/2019 and 1.75% in 12/31/2018).

19. Financial liabilities at amortized cost – borrowing, financing and securitized borrowings

	12/31/2020		12/31/2019		12/31/2018

Borrowings and financings		97,454		133,401		50,699
Securitized borrowings		79,742		169,925		64,715
Total		177,196		303,326		115,414

Borrowings and financings

Borrowings and financings balances are as follows:

	12/31/2020
	Up to 3 months		3 to 12 months		Over 12 months		Total
Borrowings and financings
Financial letter (i)		-		60,126		-		60,126
Bills of exchange (iii)		5,620		1,588		10,476		17,684
Term loan credit facility (iv)		-		254		19,390		19,644
Total borrowings and financings		5,620		61,968		29,866		97,454

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Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2019
	Up to 3 months		3 to 12 months		Over 12 months		Total
Borrowings and financings
Financial letter (i)		-		-		77,061		77,061
Bank credit bill (ii)		4,969		29,214		-		34,183
Bills of exchange (iii)		-		324		21,833		22,157
Total borrowings and financings		4,969		29,538		98,894		133,401

	12/31/2018
	Over 12 months		Total
Borrowings and financings
Bank credit bill (ii)		50,386		50,386
Bills of exchange (iii)		313		313
Total borrowings and financings		50,699		50,699

(i)

In June 2019, the Group issued a floating interest rate note in R$ in the amount equivalent to USD76 million, with maturity in June 2021 and an average interest of 116% of the Brazilian CDI rate.

(ii)

During 2019, the Group obtained floating interest borrowings in R$ in the total amount equivalent to USD63 million, with interest on floating rates between 100% of the Brazilian CDI rate plus + 1.05% to + 1.60% per annum. The maturity dates of these borrowings were between March 2020 and October 2020.

(iii)

Corresponds to pre and post-fixed bills of exchange in the amount equivalent to USD22 million, with maturity dates between December 2020 and September 2021 and interest on floating rates between 113% and 119% of the Brazilian CDI rate for the floating rate bills and between 8.35% and 9.09% for the fixed rate bills.

(iv)

Corresponds to two term loan credit facilities obtained by the subsidiary Nu Servicios, in Mexican pesos, from:

Bank of America México, S.A., Institución de Banca Múltiple and (“BofA”) in MXN in the amount equivalent to USD10 million, with interest equivalent to 6% per annum (Mexican Interbanking Equilibrium Interest Rate (“TIIE”) + 1.45%) and maturity dates between January 2021 and July 2023.

JPMorgan México in MXN in the amount equivalent to USD10 million. As of December 31, 2020, Nu Servicios withdraw the equivalent to USD7 million with interest equivalent to 6% per annum (TIIE + 1.45%). The maturity dates are between July 2021 and December 2023.

Changes to borrowings and financings are as follows:

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020
	Financial letter			Bank credit bill			Bills of exchange			Term loan credit facility		Total

Balance at beginning of the year		77,061			34,183			22,157			-		133,401
New borrowings		-			-			-			17,974		17,974
Payments – principal		(1,508	)		(26,148	)		(237	)		-		(27,893	)
Payments – interest		(45	)		(1,279	)		(24	)		-		(1,348	)
Interest accrued		1,936			743			770			236		3,685
Effect of changes in exchange rates (OCI)		(17,318	)		(7,499	)		(4,982	)		1,434		(28,365	)
Balance at end of the year		60,126			-			17,684			19,644		97,454

	12/31/2019
	Financial letter			Bank credit bill			Bills of exchange			Total

Balance at beginning of the year		-			50,386			313			50,699
New borrowings		76,061			63,384			21,132			160,577
Payments – principal		-			(78,185	)		-			(78,185	)
Payments – interest		-			(2,654	)		-			(2,654	)
Interest accrued		2,684			2,886			1,201			6,771
Effect of changes in exchange rates (OCI)		(1,684	)		(1,634	)		(489	)		(3,807	)
Balance at end of the year		77,061			34,183			22,157			133,401

	12/31/2018
	Bank credit bill			Bills of exchange			Total

Balance at beginning of the year		83,977			-			83,977
New borrowings		28,394			334			28,728
Payments – principal		(52,380	)		-			(52,380	)
Payments – interest		(16,393	)		-			(16,393	)
Interest accrued		16,174			-			16,174
Borrowing costs		39			-			39
Effect of changes in exchange rates (OCI)		(9,425	)		(21	)		(9,446	)
Balance at end of the year		50,386			313			50,699

Guarantees

The Company, together with the subsidiary Nu Pagamentos, are guarantors to the abovementioned loan agreements between BofA, JP Morgan and Nu Servicios. The total amount of both guarantees is USD20,000.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Securitized borrowings

Securitized borrowings balances are as follows:

12/31/2020

Until 3

months

3-12

months

Over 12

months

Total

Securitized borrowings

2nd series

1,214

3,623

4,837

3rd series

16,128

48,091

10,686

74,905

Total securitized borrowings

17,342

51,714

10,686

79,742

	12/31/2019
	Until 3 months		3-12 months		Over 12 months		Total
Securitized borrowings
1st series		8,289		24,867	-			33,156
2nd series		1,556		4,665		6,225		12,446
3rd series	-			27,607		96,716		124,323
Total securitized borrowings		9,845		57,139		102,941		169,925

12/31/2018

3-12

months

Over 12

months

Total

Securitized borrowings

1st series

17,254

34,509

51,763

2nd series

12,952

Total securitized borrowings

17,254

47,461

64,715

As of December 31, 2020, 2019 and 2018, securitized borrowings correspond to senior notes issued by FIDC Nu, with maturity dates between December 2020 and February 2022 and interest rates of 130% of Brazilian CDI for 1^st series, Brazilian CDI +4% for 2^nd series and CDI + 1.1% for 3^rd series. The subsidiary Nu Pagamentos is the quota holder for the subordinated notes. The underlying assets of the FIDC correspond to credit card receivables.

In February 2019, the 3rd series was issued in the amount equivalent to USD126,768, with a floating interest rate of 100% of the Brazilian CDI rate plus spread of 1.1% per annum and 36 months of maturity.

As of December 31, 2020, FIDC Nu has receivables in the amount equivalent to USD56,989 (USD174,727 in 12/31/2019 and USD76,486 in 12/31/2018). These assets are not available for transfer to settle liabilities in other entities of the Group.

Changes to securitized borrowings are as follows:

	12/31/2020			12/31/2019			12/31/2018
Balance at beginning of the year		169,925			64,715			38,027
New borrowings		-			126,768			34,203
Interest accrued		4,633			11,846			5,035
Payments – principal		(52,172	)		(16,835	)	-
Payments – interest		(4,819	)		(11,717	)		(5,039	)
Effect of changes in exchange rates (OCI)		(37,825	)		(4,852	)		(7,511	)
Balance at end of the year		79,742			169,925			64,715

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

20. Provision for lawsuits and administrative proceedings

	12/31/2020		12/31/2019		12/31/2018

Tax risks		15,995		20,631		14,067
Civil risks		470		300		209
Labor risks		4		21		-
Total		16,469		20,952		14,276

Provision

Civil lawsuits are mainly related to credit card operations. Based on Management’s assessment and the opinion of the Nubank’s external legal advisors, the Group has a provision in the amount of USD470 on December 31, 2020 (USD300 in 12/31/2019 and USD209 in 12/31/2018) considered sufficient to cover estimated losses from civil suits and current consumption ratio.

Regarding tax risks, a provision in the amount of USD15,995 on December 31, 2020 (USD20,631 in 12/31/2019 and USD14,067 in 12/31/2018) was recorded as a legal obligation related to the increase in the contribution of certain Brazilian taxes (PIS and COFINS). The Group has a judicial deposit in the amount related to this claim, as shown below in item d). In July 2019, Nubank decided to withdraw the lawsuit and is currently awaiting the judicial deposits’ release to the Brazilian Tax Authorities, which is expected to occur in up to two years.

Changes

	12/31/2020
	Tax			Civil			Labor

Balance at beginning of the year		20,631			300			21
Additions		-			1,472			2
Payments / Reversals		-			(1,234	)		(13	)
Effect of changes in exchange rates (OCI)		(4,636	)		(68	)		(6	)
Balance at end of the year		15,995			470			4

	12/31/2019
	Tax			Civil			Labor

Balance at beginning of the year		14,067			209			-
Additions		7,263			743			21
Payments / Reversals		-			(641	)		-
Effect of changes in exchange rates (OCI)		(699	)		(11	)		-
Balance at end of the year		20,631			300			21

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2018
	Tax			Civil			Labor

Balance at beginning of the year		5,783			111			-
Additions		9,607			430			-
Payments / Reversals	-				(293	)		-
Effect of changes in exchange rates (OCI)		(1,323	)		(39	)		-
Balance at end of the year		14,067			209			-

Contingencies

The Group is a party of civil and labor cases, involving risks classified by management and the legal advisors as possible losses, totaling approximately USD4,054 and USD242, respectively, on December 31, 2020 (USD 1,212 and USD44 in 12/31/2019 and USD497 and USD44 in 12/31/2018). Based on Management’s assessment and the opinion of the Group’s external legal advisors, Nubank concluded for the outcome of these proceedings as possible losses and therefore no provision was recognized.

Judicial deposits

As of December 31, 2020, the total amount of judicial deposits, shown as “Other assets”, is USD16,440 (USD21,177 in 12/31/2019 and USD13,628 in 12/31/2018) and is substantially related to the tax proceeding.

21. Deferred income

	12/31/2020		12/31/2019		12/31/2018
Deferred revenue from points		19,256		15,412		7,443
Deferred annual fee		5,773		5,742		3,386
Other deferred income		936		-		-
Total		25,965		21,154		10,829

The Group has created a reward program for its credit card customers called "Nubank Rewards". The program consists of accumulating points according to the use of the credit card in the ratio of R$1.00 (one Brazilian real, equivalent to USD0.19) equal to 1 point. The number of points generated may be higher for transactions with some partner companies or for transactions that meet Nubank pre-conditions. The points do not expire, and there is no limit on the amount of rewards an eligible card member can earn.

The redemption of the points occurs when the customers uses them which can be in various expense categories, such as air tickets, hotels, transportation services, and music.

Nubank uses financial models to estimate the redemption rates of rewards earned to date by current card members, and, therefore, the estimated financial value of the points, based on historical redemption trends, current enrollee redemption behavior, among others. The estimate financial value is recorded in the income statement when the performance obligation is satisfied, which is when the reward points are redeemed.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Deferred annual fees comprises amounts related to the rewards fees which are paid annually by customers until they are earned.

22. Senior preferred shares

On June 18, 2020, the Company concluded the issuance of senior preferred shares in the amount of USD300 million. The senior preferred shares are considered a host financial instrument with convertible features that were considered embedded derivatives. The financial liability components are the contractual obligation to deliver cash and the convertible embedded derivative into a variable number of shares.

The senior preferred shares have similar features to the preferred shares (note 26), except for (i) are senior to preferred shares upon the distribution of proceeds due to the liquidity events described in note 26, (ii) have the rights to cumulative dividends payments equivalent to 18.5% p.y. after December 2026, (iii) redeemable in cash at the option of the holder upon the occurrence of mandatory redemption events, (iv) redeemable in cash at the option of the Company at any time, (v) convertible initially into a fixed number of ordinary shares at the option of the holder at any time, or in a variable number of ordinary shares if a down-round feature is triggered (vi) automatically convertible upon the occurrence of a qualified initial public offering or liquidation event into a fixed number of ordinary shares or variable number of shares due to down-round features. Upon the exercise of the redeemable option in cash by the Company, the holders of the senior preferred shares can request the conversion of the senior preferred shares into a fixed or variable number of preferred shares prior to the redemption.

The fair value of the convertible embedded derivative, which can be exercised by the holder at any time, was measured using methodology consistent with the share price valuation described on share-based payments (note 9).

	12/31/2020

Balance at beginning of the year		-
New issuances		300,000
Deferred expenses		(236	)
Expenses with convertible instruments		101,151
Interest accrued		28,630
Changes in the fair value of the embedded derivative conversion feature		72,521
Balance at end of the year		400,915
Presented at amortized cost		328,394
Embedded derivative at fair value		72,521

On the conversion of the senior preferred shares, the entity no longer recognizes the liability component and recognizes it as equity. As a result, the total effects on changes in equity during the life of the convertible instrument may be zero if no cash is paid.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

23. Related parties

Related parties are shareholders with significant participation, companies linked to them, including their managers and board members, key management members and their relatives.

As described on note 3 Basis for consolidation, all subsidiaries are consolidated in these financial statements.

The exchange differences arising from intercompany loans between entities of the group with different functional currencies are shown as “Other income (expenses)” on the statement of profit or loss.

a) Management compensation

There are no post-employment benefits, such as pensions and other retirement benefits. The remuneration of the directors and other key management personnel of the Group is set out in aggregate below.

12/31/2020

12/31/2019

12/31/2018

Consolidated statements of income or loss

Fixed and variable compensation

18,950

10,544

480

24. Fair value measurement

The main valuation techniques employed in internal models to measure the fair value of the financial instruments on December 31, 2020, 2019 and 2018 are set out below. The principal inputs into these models are derived from observable market data. The Group did not make any material changes to the valuation techniques and internal models it used in those years.

Fair value of financial instruments carried at amortized cost

The following tables demonstrate the fair value of the financial instruments carried at amortized cost on December 31, 2020, 2019 and 2018.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020
	Book value		Fair value - Level 2		Fair value - Level 3
Assets
Financial assets at amortized cost
Compulsory deposits at central banks		43,542		43,542		-
Credit card receivables		2,908,907		-		2,720,518
Loans to customers		174,694		-		242,305
Interbank transactions		-		-		-
Other financial assets at amortized cost		22,870		22,870		-
Total		3,150,013		66,412		2,962,823

Liabilities
Financial liabilities at amortized cost		9,093,316		9,075,145		-
Deposits by customers		5,565,349		5,565,421		-
Deposits in electronic money ("Conta do Nubank")		1,029,284		1,029,356		-
Bank receipt of deposits (RDB) and RDB-V		4,536,065		4,536,065		-
Time deposit (DPGE)		19,513		19,513		-
Payables to credit card network		3,331,258		3,313,608		-
Borrowings and financing		97,454		96,877		-
Securitized borrowings		79,742		79,726		-
Total		9,093,316		9,075,145		-

	12/31/2019
	Book value		Fair value - Level 2		Fair value - Level 3
Assets
Financial assets at amortized cost
Credit card receivables		2,786,524		-		2,534,226
Loans to customers		58,024		-		72,399
Interbank transactions		91		91		-
Other financial assets at amortized cost		79,037		79,037		-
Total		2,923,676		79,128		2,606,625

Liabilities
Financial liabilities at amortized cost		5,972,989		5,952,320		-
Deposits by customers		2,693,158		2,693,629		-
Deposits in electronic money ("Conta do Nubank")		1,323,592		1,324,050		-
Bank receipt of deposits (RDB) and RDB-V		1,369,566		1,369,579		-
Payables to credit card network		2,976,505		2,953,604		-
Borrowings and financing		133,401		134,143		-
Securitized borrowings		169,925		170,944		-
Total		5,972,989		5,952,320		-

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2018
	Book value		Fair value - Level 2		Fair value - Level 3
Assets
Financial assets at amortized cost
Credit card receivables		1,623,827		-		1,454,134
Other financial assets at amortized cost		28,894		28,894		-
Total		1,652,721		28,894		1,454,134

Liabilities
Financial liabilities at amortized cost		2,419,950		2,399,864		-
Deposits by customers		628,683		628,683		-
Deposits in electronic money ("Conta do Nubank")		628,683		628,683		-
Payables to credit card network		1,675,853		1,655,767		-
Borrowings and financing		50,699		50,699		-
Securitized borrowings		64,715		64,715		-
Total		2,419,950		2,399,864		-

The valuation approach to specific categories of financial instruments is described below.

i) Fair value level 2 inputs

Credit card: Credit card receivables and payables to credit card network’s fair values are calculated using the discounted cash flow method. Fair values are determined discounting the contractual cash flows by the interest rate curve. For receivables, fair values exclude expected losses. For payables, cash flows are also discounted by the Group's own credit spread.

Loans to customers: Fair value is estimated based on groups of clients with similar risk profiles, using valuation models. The fair value of a loan is determined discounting the contractual cash flows by the interest rate curve, excluding expected losses.

Deposits: The majority of deposit liabilities are payable on demand and therefore can be deemed short-term in nature with the fair value equal to the carrying value.

ii) Fair value level 3 inputs

Credit card and loan receivables: For the fair value receivables of both credit card and loans to customers, the Group used two inputs that are not directly observable: the probability of payment on time by customers and the rate of recovery of late payments. Both are estimated using the Group's internal databases.

Fair values of financial instruments measured at fair value

The following table shows a summary of the fair values, as of December 31, 2020, 2019 and 2018, of the financial assets and liabilities indicated below, classified on the basis of the various measurement methods used by the Group to determine their fair value:

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020
	Published price quotations in active markets (Level 1)		Internal Models (Level 2)		Internal Models (Level 3)		Total
Assets
Securities
Financial treasury bills (LFT)		1,836,139		-		-		1,836,139
National treasury bills (LTN)		2,300,676		-		-		2,300,676
National treasury notes (NTN)		408		-		-		408
Bank receipt of deposits (RDB)		-		1		-		1
Investment funds		-		150,030		-		150,030
Bill of credit (LC)		-		23		-		23
Derivative financial instruments		32		48		-		80
Collateral for credit card operations		-		90,761		-		90,761

Liabilities
Derivative financial instruments		2,783		-		72,521		75,304
Instruments eligible as capital		-		15,492		-		15,492

	12/31/2019						12/31/2018
	Published price quotations in active markets (Level 1)		Internal Models (Level 2)		Total		Published price quotations in active markets (Level 1)		Internal Models (Level 2)		Total
Assets
Securities
Financial treasury bills (LFT)		1,680,994		-		1,680,994		541,775		-		541,775
National treasury bills (LTN)		543,463		-		543,463	-			-		-
Certificate of bank deposits (CDB)								166		-		166
National treasury notes (NTN)		527				527		-		-		-
Bank receipt of deposits (RDB)		-		230		230		-		-		-
Investment funds		-		12,431		12,431		-		28,212		28,212
Bill of credit (LC)		-		28		28		-		28		28
Derivative financial instruments		80		161		241		-		-		-
Collateral for credit card operations		-		162,777		162,777		-		85,291		85,291

Liabilities
Derivative financial instruments		2,041		-		2,041		1		-		1
Instruments eligible as capital		-		22,084		22,084		-		-		-

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Securities: The securities with high liquidity and quoted prices in the active market are classified as Level 1. All the Brazilian Government Bonds are included in Level 1 since they are traded in an active market. Fair values are the quoted prices of the secondary market, published by Brazilian Association of Financial and Capital Market Entities (“Anbima”).

Derivatives: Derivatives traded on stock exchanges are classified in Level 1 of the hierarchy. Derivatives traded on the Brazilian stock exchange (“B3”) are fair valued using B3 quotations. Interest rate OTC Swaps are valued discounting future expected cash flows to present values using interest rate curves based in interest rate futures and are classified as Level 2. The embedded derivative conversion feature from the senior preferred share was calculated based on methodologies for the share price described in note 9.

There were no differences between the fair value at initial recognition and the transaction prices.

Transfers between levels of the fair value hierarchy

Transfers between levels of the fair value hierarchy are reported regularly throughout the year. In 2020, 2019 and 2018, there were no transfers of financial instruments between Levels 1 and 2 or between Levels 2 and 3.

25. Income tax

Current and deferred tax are accounted for all transactions that have been recognized in the consolidated financial statements using the provisions of the current tax laws. The current income tax expense or benefit represents the estimated taxes to be paid or refunded, respectively, for the current period. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities. They are measured using the tax rates and laws that will be in effect when the differences are expected to reverse.

Income tax reconciliation

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

	12/31/2020			12/31/2019			12/31/2018
Net loss before income tax		(193,178	)		(129,299	)		(33,404	)
Tax rate (i)		40	%		40	%		40	%
Income tax		77,271			51,720			13,362

Permanent additions/exclusions
Share-based payments		(8,639	)		(5,509	)		(3,731	)
Customers gifts		(375	)		(1,685	)		(433	)
Operational losses		(4,741	)		(2,343	)		(860	)
Effect of different tax rates - subsidiaries		(3,781	)		(2,546	)		-
Results with convertible instruments		(29,008	)		-			-
Other non-deductible expenses		(9,040	)		(2,869	)		(3,517	)
Income tax for the year		21,687			36,768			4,821

Current tax expense		(22,338	)		(3,572	)		(15,520	)
Deferred tax benefit		44,056			40,341			20,341
Deferred tax recognized in OCI		(31	)		(1	)		-
Income tax for the year		21,687			36,768			4,821
Effective tax rate		-11.2	%		-28.4	%		-14.4	%

(i)

For reconciliation purposes, the tax rate used was the one applicable to the Brazilian subsidiaries, which represent the most significant portion of the operations of the Group.

Deferred income taxes

The following tables presents significant components of the Group’s deferred tax assets and liabilities as of December 31, 2020, 2019 and 2018, and its changes for the years then ended. The accounting records of deferred tax assets on income tax losses and/or social contribution loss carryforwards, as well as those arising from temporary differences, are based on technical feasibility studies which consider the expected generation of future taxable income, considering the history of profitability for each subsidiary individually. The Group has no time limit for use the deferred tax assets, but its use is limited to 30% of taxable profit.

Reflected in the statement of profit or loss	12/31/2019			Constitution			Realization/ Reversal			Foreign exchange			12/31/2020

Provisions for credit losses		63,846			79,383			(60,808	)		(14,266	)		68,155
Provision PIS/COFINS - Financial Revenue		8,252			-			-			(1,854	)		6,398
Other provisions		14,944			27,125			(5,242	)		(3,504	)		33,323
Fair value of securities		2,177			8,945			(1,791	)		(672	)		8,659
Total deferred tax assets on temporary differences		89,219			115,453			(67,841	)		(20,296	)		116,535

Tax loss and negative basis of social contribution		4,979			7,150			(3,724	)		191			8,596
Deferred tax assets		94,198			122,603			(71,565	)		(20,105	)		125,131

Fair value changes - government securities		(698	)		(7,013	)		-			(1,030	)		(8,741	)
Deferred tax liabilities		(698	)		(7,013	)		-			(1,030	)		(8,741	)
Deferred tax assets net of deferred tax liabilities		93,500			115,590			(71,565	)		(21,135	)		116,390

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as of December 31, 2020, 2019 and 2018

Reflected in equity, in other comprehensive income	12/31/2019			Constitution			12/31/2020

Fair value changes - cash flow hedge		(1	)		(31	)		(32	)
Total		(1	)		(31	)		(32	)

Reflected in the statement of profit or loss	12/31/2018			Constitution			Realization			Foreign exchange			12/31/2019

Provisions for credit losses		35,375			81,165			(51,636	)		(1,058	)		63,846
Provision PIS/COFINS - Financial Revenue		5,627			2,905			-			(280	)		8,252
Other provisions		6,603			8,784			-			(443	)		14,944
Fair value of securities		331			2,225			(326	)		(53	)		2,177
Total deferred tax assets on temporary differences		47,936			95,079			(51,962	)		(1,834	)		89,219

Tax loss and negative basis of social contribution		7,280			-			(2,063	)		(238	)		4,979
Deferred tax assets		55,216			95,079			(54,025	)		(2,072	)		94,198

Fair value changes - government securities		(1	)		(714	)		-			17			(698	)
Deferred tax liabilities		(1	)		(714	)		-			17			(698	)
Deferred tax assets net of deferred tax liabilities		55,215			94,365			(54,025	)		(2,055	)		93,500

Reflected in equity, in other comprehensive income	12/31/2018		Constitution			12/31/2019

Fair value changes - cash flow hedge		-		(1	)		(1	)
Total		-		(1	)		(1	)

Reflected in the statement of profit or loss	12/31/2017		Constitution			Realization			Foreign exchange			12/31/2018

Provisions for credit losses		22,757		34,956			(18,380	)		(3,958	)		35,375
Provision PIS/COFINS - Financial Revenue		1,032		5,759		-				(1,164	)		5,627
Other provisions		2,921		4,986		-				(1,304	)		6,603
Fair value of securities	-			402		-				(71	)		331
Total deferred tax assets on temporary differences		26,710		46,103			(18,380	)		(6,497	)		47,936

Tax loss and negative basis of social contribution		15,571		-			(7,381	)		(910	)		7,280
Deferred tax assets		42,281		46,103			(25,761	)		(7,407	)		55,216

Fair value changes - government securities		-		(1	)		-			-			(1	)
Deferred tax liabilities		-		(1	)		-			-			(1	)
Deferred tax assets net of deferred tax liabilities		42,281		46,102			(25,761	)		(7,407	)		55,215

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as of December 31, 2020, 2019 and 2018

26. Equity

The tables below present the changes in the quantity of shares issued and fully paid by class of share capital on December 31, 2020, 2019 and 2018 and the total quantity of shares authorized by class of share capital as of December 31, 2020.

Shares authorized and fully paid	Ordinary shares			Preferred shares		*Senior preferred shares ()**		Management shares		Total

Total as of December 31, 2017		7,225,758			13,423,883	-			100		20,649,741

Stock options exercised		151,053		-		-		-			151,053
Shares repurchased		(7,752	)	-		-		-			(7,752	)
Capital increase (Series E)	-				1,724,695	-		-			1,724,695
Capital increase (Series E.1)	-				658,770	-		-			658,770

Total as of December 31, 2018		7,369,059			15,807,348	-			100		23,176,507

Stock options exercised		999,466		-		-		-			999,466
Shares repurchased		(26,520	)	-		-		-			(26,520	)
Awards issued		279,482		-		-		-			279,482
Capital increase (Series F)	-				1,074,934	-		-			1,074,934

Subtotal before the 25-for-1 forward share split		8,621,487			16,882,282	-			100		25,503,869

Issuance of shares due to the 25-for-1 forward share split on December 31, 2019		206,915,688			405,174,768	-			2,400		612,092,856

Total as of December 31, 2019		215,537,175			422,057,050	-			2,500		637,596,725

SOPs exercised and RSUs vested		7,235,430		-		-		-			7,235,430
Shares withheld for employees' taxes (note 9)		(114,341	)	-		-		-			(114,341	)
Shares repurchased		(1,171	)	-		-		-			(1,171	)
Capital increase (Series F-1)	-			-			16,795,799	-			16,795,799

Total as of December 31, 2020		222,657,093			422,057,050		16,795,799		2,500		661,512,442

Shares authorized and not paid	Ordinary shares		Preferred shares		*Senior preferred shares ()**		Management shares		Total

Contingent share consideration granted in a business combination for management services		700,000	-		-		-			700,000
Preferred and senior preferred shares conversion		438,852,849	-		-		-			438,852,849
Reserved for the share-based payments (note 9)		53,916,446	-		-		-			53,916,446
Total shares authorized and not paid		493,469,295		-		-		-		493,469,295

Shares authorized and fully paid		222,657,093		422,057,050		16,795,799		2,500		661,512,442
Total shares authorized, paid and not paid		716,126,388		422,057,050		16,795,799		2,500		1,154,981,737

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

(*) According to the Company’s bylaws, the senior preferred shares are considered capital but are presented as liability due to their characteristics (note 22).

Share classes

The main features of the Company's share classes are as follows:

(i)

Ordinary shares

Ordinary shares are not redeemable, do not have mandatory dividends and are non-voting shares except in certain events.

(ii)

Preferred shares

The preferred shares (i) have the rights to non-cumulative dividends, when distributed by the Company, equal to 8% of their issuance prices and on a pari passu basis to senior preferred shares but prior and in preference to dividends to ordinary shares, (ii) are not redeemable at the option of the holders or the Company, (iii) have the rights to receive proceeds available, if any, due to liquidation events, voluntary or involuntary, in preference to ordinary shares, (iv) automatically convertible upon the occurrence of a qualified initial public offering or liquidation event into a fixed number of ordinary shares, (v) compensatory anti-dilutive rights relating to the issuance of new shares with prices below their issuance prices, (vi) and non-voting except in certain events mostly relating to conversion and liquidation events.

Liquidation events consist of (i) the closing of the sale, transfer or other disposition of all or substantially all of the assets of the Company and its subsidiaries, (ii) the consummation of a merger or consolidation with or into another entity, except if the current shareholders continue to hold at least 50% of the voting power or economic interests of the Company or the surviving or acquiring entity, (iii) the closing of any transaction where an investor becomes the holder of at least 50% of the voting power or economic interests of the Company, (iv) an irrevocable and exclusive licensing of all or substantially all of the intellectual property of the Company, or (v) a liquidation, dissolution or winding up of the Company. The conclusion of these events is deemed under the control of the Company.

(iii)

Senior preferred shares

See note 22.

(iv)

Management shares

The management shares are not redeemable, do not have any economic rights, and are the only voting shares.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Share capital and share premium reserve

All shares’ classes of the Company have a nominal par value of USD0.00004 on December 31, 2020 and 2019 (USD0.0001 as of December 31, 2018), and the total amount of share capital is USD45 (USD45 as of December 31, 2019 and USD42 as of December 31, 2018).

Share premium reserve relates to amounts contributed by shareholders over the par value at the issuance of shares. On December 31, 2019, the accumulated losses until that date were entirely absorbed by the share premium reserve.

In December 2019, the Company performed a 25-for-1 forward share split, pursuant to which each share of the Company was split into twenty-five (25) shares of the same class and series.

Capital increases

The table above presents the number of shares issued, and the following table presents the number of shares issued, increase in capital and premium reserve in transactions other than the exercise of the SOPs and vesting of RSUs:

Date	Capital and share premium reserve
2/15/2018 - Series E		151,249
9/26/2018 - Series E.1		92,348
7/31/2019 - Series F		400,001
Total presented as equity		643,598

June 18, 2020 (*) - Series F-1		300,000
Total presented as liability		300,000

(*) According to the Company’s bylaws, the senior preferred shares are considered capital but are presented as liability due to their characteristics (note 22).

Accumulated losses

The accumulated losses include the share-based payment reserve amount, as demonstrated below.

As described in note 9, the Group's share-based payments includes incentives in the form of SOPs, RSUs and Awards. Further, the Company can use the reserve to absorb accumulated losses.

	12/31/2020			12/31/2019		12/31/2018
Accumulated losses		(171,491	)		-		(83,446	)
Share-based payments reserve		69,050			28,189		25,452
Total		(102,441	)		28,189		(57,994	)

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Shares repurchase and withheld

Shares may be repurchased from former employees when they leave the Group or withheld because of RSUs plans in order to settle the employee’s tax obligation. These shares repurchased or withheld are canceled and cannot be reissued or subscribed. During the years ended on December 31, 2020, 2019 and 2018, the following shares were repurchased:

	12/31/2020		12/31/2019		12/31/2018
Quantity of shares		1,171		663,000		19,150
Total value of shares repurchased		15		3,774		695
Total value of shares withheld - RSU (note 9)		2,646		-		-

Accumulated other comprehensive income

Other comprehensive income that may be reclassified to profit or loss subsequently is related to cash flow hedges that qualify as effective hedges and currency translation that represents the cumulative gains and losses on the retranslation of the Group’s investment in foreign operations. These amounts will remain under this heading until they are recognized in the consolidated income statement in the periods in which the hedged items affect it.

The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities designated at fair value. Amounts in the own credit reserve are not recycled to profit or loss in future periods.

The accumulated balances are as follows:

	12/31/2020			12/31/2019			12/31/2018
Cash flow hedge effects		81			2			-
Deferred income taxes		(32	)		(1	)		-
Currency translation on foreign entities		(97,081	)		(46,981	)		(34,710	)
Own credit adjustment effects		(468	)		(249	)		-
Total		(97,500	)		(47,229	)		(34,710	)

27. Management of financial risks, financial instruments, and other risks

Overview

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Risks that the Company actively monitored include:

Credit risk;

Liquidity risk;

Market Risk and Interest Rate Risk in the Banking Book (IRRBB);

Operational risk; and

Reputational risk.

Structure

The Group's Management has overall responsibility for establishing and supervising the risk management structure. Risk Management function is under an independent structure from business areas, reporting directly to senior management, to ensure exemption of conflict of interest and segregation of functions appropriate to good corporate governance and market practices.

The risk management process permeates the whole Group, being in line with the guidelines of management and executives, which, through committees and other internal meetings, define the Group’s objectives, including risk appetite. On the other hand, capital control supports management through risk and capital monitoring and analysis processes.

Nubank considers that a risk appetite statement (“RAS”) is a key instrument to support risk management and decision making. Therefore, its development is aligned with the business plan, strategy development and capital planning. Nubank implemented a RAS that prioritizes the top risks and, for each of these risks, it has implemented: qualitative statements, quantitative measures expressed relative to earnings, capital, liquidity, and other relevant information, as appropriate.

Nubank's risk management structure allows inherent risks to be appropriately identified, measured, mitigated, tracked, and reported to support the development of its activities. Thus, Nubank's Management adopts the three-line of defense model, as follows:

The first line of defense: business functions or activities that generate exposure to a risk, whose managers are responsible for their management in accordance with policies, limits and other conditions defined and approved by the Executive Directors. The first line of defense should have the means to identify, measure, treat and report the risks taken.

The second line of defense: consists of areas of risk management, internal controls, and compliance. It ensures effective risk control and ensures that risks are managed according to the defined appetite level. Responsible for proposing risk management policies, developing risk models, methodologies and supervising the first line of defense.

The third line of defense: composed of Internal Audit, is responsible for periodically and independently assessing whether policies, methods and procedures are appropriate, as well as proving their effective implementation.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Another essential element of Nubank's risk management framework is the structure of committees and technical forums. These governance bodies are designed to follow up and make decisions on aspects associated with the Group's risk management and control. The main committees and forums are described below:

Risk Committee: Non-statutory committee, has a permanent and consultative nature. Its purpose is to assist the CEO and other Directors in the performance of their duties in risk management and control, monitoring the level of risk exposure in accordance with the Risk Appetite Statement (RAS). It also aims to adopt strategies, policies, and measures aimed at spreading the culture of internal controls and risk mitigation applicable to Nubank. Its attributions and competences are established in its Internal Regulation. This Committee is composed of at least 3 members, with the CEO, CRO and an independent member being mandatory. It meets at least monthly, and its decisions are formalized in minutes.

Credit Committee: Non-statutory committee, has a permanent and consultative nature. Its purpose is to review and supervise credit strategies, as well as to review their impacts on the Group’s results, macroeconomic environment and information regarding risk, the credit market, and competitors. It takes place monthly, with the main topics recorded in minutes. The Credit Committee is composed by the Chief Risk Officer and members of the Business and Credit areas.

Audit Committee: Statutory committee, has a permanent and advisory nature. Its main duties are to evaluate the performance and progress of the work of the Internal Audit, the independent audit, as well as the relevant reports related to the internal control systems, to follow the recommendations made by the internal and independent auditors to Management, as well as to evaluate and give opinions about the financial statements as a whole. Its attributions and competences are established in the Company’s bylaws and in the Committee's Internal Regulations. Is composed of three to seven members and it has independent members. It meets at least monthly and its decisions are formalized in minutes.

Technical Forums: meets regularly to discuss and propose recommendations to the Risk Committee. Each of the following topics has its own technical forum, with the participation of executives from associated areas: Controllership (Accounting & Tax); Operational Risk and Internal Controls; Assets & Liabilities and Capital Management ("ALM”); Credit Risk, Information Technology ("IT") Risks; Data Privacy, Fraud Prevention, Anti-money Laundering ("AML") and Stress Testing. Each Technical Forum meets monthly, with the exception of the Data Privacy and Fraud Prevention Forums, which take place every two months.

The risk management structure above mentioned is fully implemented within the companies operating in Brazil, more specifically Nu Pagamentos and Nu Financeira. Nubank is aiming to implement similar structures to other operating companies within the Group as their operations grow.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Risks actively monitored

The Group is exposed to different risks arising from its activities. Risk monitoring adapts as new risks and threats emerge. Currently, the Group is focused on the following risks:

Credit Risk

The credit risk is defined, among other things, as:

Counterparty risk: the possibility of failure to meet contractual obligations related to the settlement of transactions with financial assets, which also includes derivative financial instruments;

The possibility of losses associated with the failure of a signatory to loan operations to meet the financial obligations under the contractual agreed terms;

The possibility of depreciation or reduction in financial instruments expected earnings due to observed credit quality deterioration of a signatory to loan operations; and

The Group credit decision-making follows a governance, with decisions being taken and approved according to their sizing and levelling definition. The credit decisions approvals take place in committees, technical forums, and the designated decision forums, with the involvement of the first and second lines of defense, as described above. For the decision-making process, information arising from historical performance is presented and discussed using predictive models that analyze and score existing and potential customers based on their profitability and credit risk profile.

The Group uses customers’ internal information, statistical models, and other quantitative analyses to determine the risk profile of each customer in the portfolio. The information collected is used to manage the portfolio credit risk and to measure expected credit losses with periodical assessment of changes in the provision amounts. More details about the methodology for measuring credit allowances are presented on note 4.

Regarding past due customers, their behavior is continuously tracked and monitored in order to improve policies and approaches to collect debt. The collection strategies and policies of the Group depend on customer profiles and model scores and they aim to maximize the recovery amounts.

With the economic crisis caused by COVID-19, the Group monitors daily the evolution of the portfolio's risk profile and needs emerging from the new scenario during and after the crisis. In order to mitigate major impacts on liquidity and continue to support customers financially during

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

the crisis, new productions analyses were intensified in order to meet customer needs, always considering the pre-established acceptable levels of risk.

There was no significant increase in credit risk of financial instruments, except for the ones disclosed as credit card receivables and loans to customers (notes 12 and 13). Further, there is no collateral held or credit enhancements to mitigate the Company’s credit risk, except when the Group enters into reverse repos and their carrying amounts represents the maximum exposure to credit risk.

Management also monitors exposures from financial derivatives instruments. They are traded in the Brazilian stock exchange (B3 S.A. - Brasil, Bolsa, Balcão), which is recognized as qualifying central counterparty (QCCP) by the European Securities and Markets Authority (ESMA) and subject to master netting agreements. Securities balances are significantly comprised by Brazilian government securities.

The Group’s outstanding balance of financial assets is shown in the table below:

Financial assets	12/31/2020		12/31/2019		12/31/2018

Cash and cash equivalents		2,343,780		1,246,566		379,207

Financial assets at fair value through profit or loss		4,378,118		2,400,691		655,472
Securities		4,287,277		2,237,673		570,181
Derivative financial instruments		80		241		-
Collateral for credit card operations		90,761		162,777		85,291

Financial assets at amortized cost		3,150,013		2,923,676		1,652,721
Compulsory deposits at central banks		43,542		-		-
Credit card receivables		2,908,907		2,786,524		1,623,827
Loans to customers		174,694		58,024		-
Interbank transactions		-		91		-
Other financial assets at amortized cost		22,870		79,037		28,894
Total		9,871,911		6,570,933		2,687,400

Liquidity Risk

Liquidity risk is defined as the possibility that the Group will not be able to meet its current and future financial obligations when they fall due. There is a liquidity risk management and control structure in place, independent from the business units, which is responsible for the processes, assessments, monitoring, controlling, and reporting of liquidity risk, continuously verifying the adherence with the approved policies and limit’s structure.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The Group has a Contingency Funding Plan that describes possible management actions that should be taken in the case of a deterioration of the liquidity indicators.

The following items, applied to monitor and support decisions, are periodically prepared, and submitted to the ALM Technical Forum and to the Risk Committee:

Evolution of cash positions according to financial forecasts of the Group's portfolios;

Reports and charts of risk indicators; and

Assessment of alternative sources of funding.

Primary sources of funding

	12/31/2020									12/31/2019
Funding Sources	Up to 12 months		Over 12 months		Total		%			Up to 12 months		Over 12 months		Total		%

Deposits by customers		4,506,252		29,813		4,536,065		100	%		1,369,566		-		1,369,566		100	%
Bank receipt of deposits (RDB)		4,415,892		29,813		4,445,705		98	%		1,015,789		-		1,015,789		74	%
Bank receipt of deposits (RDB-V)		90,360		-		90,360		2	%		353,777		-		353,777		26	%
Time deposit		-		19,513		19,513		0	%		-		-		-		0	%
Instruments eligible as capital		-		15,492		15,492		0	%		-		22,084		22,084		0	%
Senior preferred shares		-		328,394		328,394		0	%		-		-		-		0	%
Total		4,506,252		393,212		4,899,464		100	%		1,369,566		22,084		1,391,650		100	%

Maturities of financial liabilities

The tables below summarize the Group’s financial liabilities into groupings based on their contractual maturities:

	12/31/2020
Financial liabilities	Carrying amount		Gross nominal outflow		Up to 1 month		1 to 3 months		3-12 months		Over 12 months

Derivative financial instruments		75,304		2,783		2,783		-		-		-
Instruments eligible as capital		15,492		26,511		-		-		-		26,511
Deposits
Deposits in electronic money ("Conta do Nubank")		1,029,284		1,029,284		1,029,284		-		-		-
Bank receipt of deposits (RDB)		4,445,705		4,451,069		4,243,533		89,287		85,886		32,363
Bank receipt of deposits (RDB-V)		90,360		90,360		90,360		-		-		-
Time deposit		19,513		21,072		-		-		-		21,072
Payables to credit card network		3,331,258		3,331,258		1,705,205		885,367		740,686		-
Borrowings and financing		97,454		103,306		1,389		4,242		64,204		33,471
Securitized borrowings		79,742		81,075		5,943		11,818		52,587		10,727
Senior preferred shares		328,394		910,372		-		-		-		910,372
Total		9,512,506		10,047,090		7,078,497		990,714		943,363		1,034,516

The Company manages the cash flow profile of its assets and liability by investing in securities, mainly issued by government bond, which are readily converted into cash, and also monitoring the stickiness of the deposits. It also has in a place a minimum cash policy based on the expected cash out flow from its operations.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The gross nominal outflow was projected considering the exchange rate of reais to USD as of December 31, 2020 (R$5.1985 per USD1) and the projected Brazilian CDI, obtained in B3’s website, for the deposits.

For senior preferred shares, the calculation considers the payments on the 6th anniversary of the issuance.

Market Risk and Interest Rate Risk in the Banking Book (IRRBB)

Market risk is defined as the risk of losses arising from movements in market prices, including the risk factors: interest rates, equities, foreign exchange rates and commodities. IRRBB refers to the current or prospective risk to the bank’s capital and earnings arising from adverse movements in interest rates that can affect the bank’s banking book positions.

There is a market risk and IRRBB control and management structure, independent from the business units, which is responsible for the processes and tools to measure, monitor, control and report the market risk and IRRBB, continuously verifying the adherence with the approved policies and limit’s structure.

Management of market risk and interest rate risk in the Banking Book (IRRBB) is based on the following metrics:

Interest Rate Sensitivity (DV01): impact on the market value of cash flows, when submitted to a one basis point increase in the current annual interest rates or index rate;

Value at Risk (VaR): maximum market value loss for a holding period with a confidence level; and

FX exposures, considering all financial positions that bring FX risk and operational expenses in other currencies.

Results are reported to the ALM Technical Forum and to the Risk Committee. Management is authorized to use financial instruments as outlined in the Group's internal policies to hedge market risk & IRRBB exposures.

Although the risk relating to the changes in the fair value of its shares and its effects to the share-based compensation and the embedded derivative conversion feature from the senior preferred share is discussed, the Group does not hedge these risks because it considers impracticable due to its nature and to the lack of instruments in the market. The risk arising from the share-based payments can be derived from the increase in expenses due to the issuance of new grants or appreciation of the share value of the Company. The risk arising from the embedded derivative conversion feature affects the statement of profit and loss until the conversion the entity derecognizes the liability component and recognizes it as equity. As a result, the total effects on changes in equity during the life of the convertible instrument can be zero if no cash is paid.

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Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

The table below presents the VaR, calculated using a confidence level of 95% and a holding period of 1 day.

VaR - USD	12/31/2020		12/31/2019		12/31/2018

Group		1,128		1,828		53
Nu Financeira		561		274		-
Nu Pagamentos		140		392		53

Currency risk

The consolidated financial statements may present volatility due to the Group’s operations in foreign currencies, such as R$ and Mexican and Colombian pesos. At the Nu Holdings level, there is no net investment hedge for the investments in other countries.

As of December 31, 2020, 2019 and 2018 none of the entities in the Group had significant financial instruments in a currency other than their respective functional currencies.

In Brazil, Nubank faces currency risks, mainly due to operational costs linked to its operations activities. In order to mitigate foreign exchange risk, the Group hedges the expected costs in USD and EUR in Nu Pagamentos which has the Brazilian Real as its functional currency. Derivatives instruments (dollar and euro future contracts, traded in B3) are used for carrying out these hedging activities, which are supervised by the Asset & Liability Management and Capital (ALM) Forum. Residual exposures are monitored, considering the costs (objects of hedge) and the derivatives (instruments of hedge), to assure effectiveness. The currency risk in Nu Financeira is not hedged because it is deemed as not relevant.

Interest rate risk

The following analysis is the Group's sensitivity of the mark to market fair value to an increase of 1 basis point (“bp”) (DV01) in Brazilian market interest rates, assuming a parallel shift and a constant financial position:

DV01 - USD - as of December 31	Brazilian Risk Free Curve							USD Curve

Curve	2020			2019		2018		2020			2019			2018

Nu Pagamentos		2			1		8		(1	)		(1	)		-
Nu Financeira		(1	)		-		-		-			-			-
Nu Holdings		-			2		8		(1	)		(1	)		-

The interest rate risk in subsidiaries other than Nu Pagamentos and Nu Financeira are deemed not relevant as of December 31, 2020, 2019 and 2018.

To keep DV01 sensitivities within defined limits, derivatives are used to hedge interest rate risk. Currently, interest rate futures traded in B3 and swaps are used for hedging purposes.

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Operational risk, including Information Technology risks

Operational risk is defined as the possibility of losses resulting from external events or failure, weakness or inadequacy of internal processes, people, or systems. It includes within this definition, the legal risk associated with the lack or deficiency in contracts signed by the Group and to fines due to failure to abide by legal provisions and indemnities for damages to third parties arising from activities performed.

Within the governance of the risk management process, mechanisms for identifying, measuring, evaluating, monitoring, and reporting operational risk events are presented to each business area (first line of defense), as well as disseminating the control culture to other collaborators internally. The main results from the risk assessments are presented to the Operational Risk and Internal Controls Technical Forum and to the Risk Committee. Applicable improvement recommendations result in action plans with planned deadlines and responsibilities.

The main responsibility for the development and implementation of controls to mitigate operational risks is attributed to the first line of defense teams.

The financial and payments institutions of the Group, in compliance with the regulatory requirements, have processes that encompass institutional policies, procedures, systems and contingency plans and business continuity for the occurrence of undesirable events.

Information Technology ("IT") risk

IT Risk is defined as the undesirable effects arising from a range of possible threats to the information technology infrastructure, including cybersecurity (occurrence of information security incidents), incidents management (ineffective incidents/problem management process, impact on service levels, costs, and customer dissatisfaction), data management (lack of compliance with data privacy laws or gaps in data management governance or data leakage issues), among others.

As Nubank operates in a challenging cyber threat environment, the Group continuously invest in controls and technologies to defend against these threats. Information Technology risks, including cyber risk, is a priority area for the Group and therefore it has a dedicated IT Risk structure, which is part of the second line of defense. This team is independent from IT related areas, including Engineering, IT Operations, and Information Security.

IT Risk is responsible for identifying, assessing, measuring, monitoring, controlling, and reporting Information Technology risks in relation to risk appetite levels approved by the Board of Executive Officers. The Group continually assess its risk exposure to threats and their potential impacts on the Group’s business and customers. The Company continues to improve the IT and cybersecurity features and controls, also considering that people are a key

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as of December 31, 2020, 2019 and 2018

component of the security strategy, ensuring that the Group’s employees and third party contributors remain aware of prevention measures and also know how to report incidents.

Reputational risk

28. Capital management

At the executive level, the ALM Technical Forum is responsible for approving risk assessment and capital calculation methodologies, as well as reviewing, monitoring, and recommending capital-related action plans to the Risk Committee.

Minimum capital requirements

The Group must comply with two different regulatory capital requirements: one for the subsidiary Nu Financeira and the other applicable to Nu Pagamentos:

Nu Financeira: minimum level of capital, considering the minimum requirements for financial institutions according to Brazilian Federal Monetary Council (“CMN”) Resolution 4,193/13.

Nu Pagamentos: minimum level of capital, considering the minimum requirements for payment institutions, according to Circular BACEN 3,681/13.

According to its strategy, Nubank implemented a capital management structure aiming to maintain a higher level of capital than the minimum regulatory requirements. Additionally, the Group has started operations both in Mexico and Colombia and will comply with local rules as soon as regulatory requirements are applicable in these jurisdictions.

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as of December 31, 2020, 2019 and 2018

Composition of capital

i) Nu Financeira

The Regulatory Capital (PR) of Nu Financeira used to monitor the compliance with the Basel operating limits imposed by BACEN, is the sum of three items, namely:

Tier I Capital: the sum of Common Equity Tier I, which consists of Paid In Capital, capital, reserves and retained earnings, less deductions, and prudential adjustments and the Additional Tier I, which consists of subordinated debt instruments without a defined maturity that meet eligibility requirements. It is important to note that Nu Financeira does not hold any debt eligible to Additional Tier I on the date of these consolidated financial statements.

Tier II Capital: consists of subordinated debt instruments with defined maturity dates that meet eligibility requirements. Together with the Common Equity Tier I it makes up the Total Capital.

Funds from the issuance of subordinated debt securities are considered Tier II capital for the purpose of capital to risk-weighted assets ratio, as shown below. According to current legislation, the balance of subordinated debt was used for calculating the regulatory capital as of December 2020 and 2019 (more information on note 16). The following table shows the calculation of the capital ratios and their minimum requirement for Nubank's legal entities that are required by the current regulation in Brazil.

ii) Nu Pagamentos

Nu Pagamentos’ capital management aims to determine the capital needed for its growth and to plan as additional sources of capital, in order to permanently maintain equity in amounts higher than the requirements defined by BACEN.

The subsidiary permanently maintains its shareholders' equity adjusted by the income accounts in an amount corresponding to, at least, the highest amount between i) 2% of the monthly average of payment transactions carried out by the subsidiary in the last 12 (twelve) months; or ii) 2% of the balance of electronic coins issued by the Nu Pagamentos, calculated daily.

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Table of Contents

Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Nu Pagamentos
	12/31/2020			12/31/2019			12/31/2018

Adjusted Shareholder's Equity		276,672			248,571			277,505

Max Amount		1,538,256			1,409,858			811,526
Monthly average of payment transactions		1,538,256			1,399,017			811,526
Balance of electronic currencies		1,072,056			1,409,858			635,031

Capital Requirement Ratio		18.0	%		17.6	%		34.2	%


Nu Financeira
	12/31/2020			12/31/2019			12/31/2018

Regulatory Capital		118,612			46,200			19,690
Tier I		101,229			26,313			19,690
Common Equity		101,229			26,313			19,690
Tier II		17,383			19,887		-
							-
Risk Weighted Assets (RWA)		388,346			128,578			22,960
Credit Risk (RWA CPAD)		372,841			111,878			117
Market Risk (RWA MPAD)		63			-		-
Operational Risk (RWA OPAD)		15,442			16,700			22,842
							-
Capital Required		40,776			13,501			2,411
							-
Margin		77,836			32,699			17,279
Basel Ratio		30.5	%		35.9	%		85.8	%

RBAN - Capital Required		2,334			4,898		-
Margin considering RBAN		75,502			27,801			17,279

29. Segment Information

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Table of Contents

Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Information about products and services

The information about products and services are disclosed in note 6.

Information about geographical areas

The table below shows the revenue and non-current assets per geographical area:

	Revenues (a)
	12/31/2020		12/31/2019		12/31/2018

Brazil		609,232		497,446		285,887
Mexico		1,409		14		-
Colombia		1		-		-
Total		610,642		497,460		285,887

	Non-current assets (b)
	12/31/2020		12/31/2019		12/31/2018

Brazil		24,099		26,427		7,205
Mexico		1,418		233		-
Colombia		79		-		-
Cayman		831		-		-
Germany		181		130		-
Argentina		112		182		-
United States		6,993		-		-
Total		33,713		26,972		7,205

(a)

Includes interest income from credit cards and lending, interchange fees, recharge fees, rewards revenue, late fees and other fees and commission income.

(b)

Non-current assets are comprised by right-of-use assets, property, plant and equipment, intangible assets, and goodwill.

The Group has no single customer that represents 10% or more to Group's revenues in the years ending December 2020, 2019 and 2018.

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Table of Contents

Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

30. Earnings per share

The following table reflects the net loss and share data used in the basic and diluted earnings per share (“EPS”) calculations:

	12/31/2020			12/31/2019			12/31/2018

Loss attributable to owners of the Company		(171,491	)		(92,531	)		(28,583	)

Loss for the year to ordinary shareholders – basic and diluted EPS		(171,491	)		(92,531	)		(28,583	)

Total weighted average of ordinary outstanding shares for basic and diluted EPS (in thousands of shares)		219,263			189,655			183,178

Basic and diluted EPS for ordinary shareholders (US$)		(0.7821	)		(0.4879	)		(0.1560	)

Antidilutive instruments not considered in the weighted number of shares (thousands of units)		67,565			51,034			68,202

The basic and diluted earnings per ordinary shares reflect the 25-for-1 forward share split described in note 26, occurred on December 31, 2019 to allow comparability between years.

Although the Company has instruments that could become ordinary share upon the exercise or vesting, they were determined to be antidilutive. These antidilutive instruments were not included in the weighted number of shares for the diluted earnings per share and they comprise SOPs, RSUs and Awards described in note 9, the preferred shares described on note 26 and the senior preferred shares described in note 22.

31. Subsequent events

Capital increase

In January 2021, Nu Holdings completed another capital increase – Series G – in the amount of USD400 million. As a result of the transaction, 11,758,704 Series G preferred shares were issued and 7,466,778 ordinary shares were made available for issuance under the Group’s share-based compensation program. As a result of the capital increase, one of the market conditions of the Award described in note 9 has been achieved and consequently 0.5% of its total shares could be issued, upon the approval of the Board of Directors.

In June 2021, Nu Holdings concluded the capital increase Series G-1 – in the amount of USD400 million. As a result of the transaction, 10,002,809 Series G-1 preferred shares were issued.

Series G and series G-1 preferred shares have characteristics similar to the other preferred share classes described in note 26.

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Table of Contents

Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

Increase of income tax rate for the Brazilian subsidiaries

In March 2021, the Social Contribution tax rate in Brazil for financial institutions increased 5 percentage points, thus the combined income tax rate will increase from 40% to 45%. The change is effective from July 1 to December 31, 2021 and it mainly affects mainly the subsidiaries Nu Pagamentos and Nu Financeira.

Easynvest’s Business Combination

On May 4, 2021, Brazilian Central Bank approved the acquisition of the companies that are part of the Easynvest investment platform:

Easynvest Holding Financeira S.A;

Easynvest Título Corretora de Valores S.A;

Easynvest Participações S.A;

Easynvest Corretora de Seguros Ltda.;

Easynvest Gestão de Recursos Ltda.; and

Easynvest Sociedade de Crédito Direto S.A.

Easynvest is an independent digital investment broker and the acquisition marks the Group’s entry into the market of investment platforms.

The acquisition price is comprised of USD297 million in cash and of 7.9 million preferred shares class F-2 which is equivalent to a total acquisition price of USD451 million, subject to certain acquisition adjustments. Preferred shares class F-2 have characteristics similar to the other preferred share classes described in note 26.

The acquisition was completed on June 1, 2021 when the control over the entities was transferred upon all conditions established on the share purchase agreement and the liquidation are completed.

The transaction qualifies as a business combination and will be accounted for using the acquisition method of accounting. As a result of limited access to Easynvest’s information required to prepare initial accounting, together with the limited time since the acquisition date and the effort required to conform Easynvest’s financial statements to the Company's practices and policies, the initial accounting for the business combination is incomplete at the time of these consolidated financial statements. As a result, the Company is unable to provide the amounts recognized as of the Acquisition date for the major classes of assets acquired and liabilities assumed, pre-acquisition contingencies and goodwill.

Senior preferred share conversion

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Table of Contents

Nu Holdings Ltd.

Consolidated Financial Statements

as of December 31, 2020, 2019 and 2018

e) Changes on shares’ classes

In June 2021, 184,110,692 Class A Ordinary Shares were converted into Class B Ordinary Shares.

f) Awards shares

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Table of Contents

Class A ordinary shares

Shape

Description automatically generated

Nu Holdings Ltd.

PROSPECTUS

Global Coordinators

Morgan Stanley

Goldman Sachs & Co. LLC

Citigroup

NuInvest

, 2021

Through and including , 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in our Class A ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an international underwriter and with respect to an unsold allotment or subscription.

Part II
Information Not Required in Prospectus

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Cayman Islands law does not limit the extent to which a company’s articles of association may provide indemnification of officers and directors, except to the extent that it may be held by the Cayman Islands courts to be contrary to public policy, such as providing indemnification against civil fraud or the consequences of committing a crime.

Any repeal or modification of the foregoing provisions of this Article by the Members of the Company shall not adversely affect any right or protection of a Director, agent or officer of the Company existing at the time of, or increase the liability of any Director, agent or officer of the Company with respect to any acts or omissions of such Director, agent or officer occurring prior to, such repeal or modification.

In addition, our Memorandum and Articles of Association, which will become effective immediately prior to the completion of this offering, contains provisions that indemnify every director, agent or officer of the Company out of the assets of the Company against any liability incurred by them as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur (i) arising from their own fraud, willful default or dishonesty, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which such person derived any improper benefit.

In connection with this offering, we expect to obtain insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters.

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The underwriting agreement to be filed as Exhibit 1.1 to this registration statement will provide for indemnification by the international underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

ITEM 7. RECENT SALES OF UNREGISTERED SECURITIES.

Since January 1, 2018, we have issued the following unregistered securities:

Preferred Share Issuances

On September 26, 2018, we sold an aggregate of 658,770 shares of our Series E1 preferred shares to one accredited investor at a purchase price of US$140.1823 per share, for an aggregate purchase price of US$92,347,894. The number of shares of Series E-1 reflect the number of shares at the time of the sale, without giving effect to the subsequent 25-to-one forward share split on December 30, 2019 or the Share Split.

On July 31, 2019, we sold an aggregate of 1,074,934 shares of our Series F preferred shares to 16 accredited investors at a purchase price of US$372.1169 per share, for an aggregate purchase price of US$400,001,108. The number of shares of Series F reflect the number of shares at the time of the sale, without giving effect to the subsequent 25-to-one forward share split on December 30, 2019 or the Share Split.

On June 18, 2020, we sold an aggregate of 16,795,799 shares of our senior preferred shares to five accredited investors, in exchange of the same amount of senior preferred shares issued by them at a purchase price of US$17.861611 per share, for an aggregate purchase price of US$300,000,028. On May 20, 2021, all senior preferred shares were converted into Series F-1 preferred shares. The number of shares in this paragraph does not reflect the Share Split.

On January 27, 2021, we sold an aggregate of 11,758,704 shares of our Series G preferred shares to 15 investors at a purchase price of US$34.017352 per share, for an aggregate purchase price of US$339,999,973. The number of shares in this paragraph does not reflect the Share Split.

On June 1, 2021, we sold an aggregate of 8,019,426 shares of our Series F2 preferred shares to 18 investors at a purchase price of US$14.884676 per share, for an aggregate purchase price of US$119,366,558. The number of shares in this paragraph does not reflect the Share Split.

On June 11, 2021, we sold an aggregate of 10,002,809 shares of our Series G1 preferred shares to 25 investors at a purchase price of US$39.988768 per share, for an aggregate purchase price of US$400,000,008. The number of shares in this paragraph does not reflect the Share Split.

Options, RSU and Award Issuances

From January 1, 2018 through the filing date of this registration statement, we granted to our directors, officers, employees, consultants, and other service providers options to purchase an aggregate of Class A ordinary shares under our equity compensation plans at exercise prices ranging from approximately US$ to US$ per share. As of December 31, 2020, we had options outstanding under our existing plans, of which were exercisable (compared to options outstanding as of December 31, 2019, of which were exercisable). For more information, see note 9 to our audited consolidated financial statements.

From January 1, 2018 through the filing date of this registration statement, we granted to our directors, officers, employees, consultants, and other service providers an aggregate of restricted stock units, or “RSUs,” to be settled in shares of our Class A ordinary shares under our equity compensation plans. On January 30, 2020, we approved our Omnibus Incentive Plan which included the issuance of RSUs. As of December 31, 2020, we had RSUs outstanding under our existing plan. For more information, see note 9 to our audited consolidated financial statements.

From January 1, 2018 through the filing date of this registration statement, we issued ordinary shares underlying share-settled awards, upon the achievements of certain market conditions. For more information, see notes 9, 26 and 31 to our audited consolidated financial statements.

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Shares Issued in Connection with Acquisitions

In connection with our acquisition of the Easynvest Companies, we issued an aggregate of 7.9 million Series F-2 preferred shares and sold 159,981 Series F-2 preferred shares to certain executives of the Easynvest Companies. In addition, in connection with our acquisitions of Cognitect, we expect to issue: (i) Class A ordinary shares commencing in August 2021 in connection with the first anniversary of our acquisition of Cognitect, upon the satisfaction of the conditions precedent from the contingent consideration for post-combination services rendered to us by Cognitect’s former shareholders and employees; and (ii) Class A ordinary shares in equal installments over a four year period commencing in August 2021, subject to the satisfaction of certain conditions precedent. The number of shares in this paragraph does not reflect the Share Split.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe the offers, sales, and issuances of the above securities were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) or Regulation S because the issuance of securities to the recipients did not involve a public offering or an offering to U.S. persons, or in reliance on Rule 701 because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation as provided under such rule. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.

ITEM 8. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

The following documents are filed as part of this registration statement:

Exhibit No.	Description
1.1*	Form of Underwriting Agreement.
3.1*	Memorandum and Articles of Association of the registrant, as currently in effect.
3.2*	Form of Memorandum and Articles of Association of the registrant, to be in effect upon completion of this offering.
4.2*	Registration Rights Agreement by and among the registrant and certain holders of its shares, dated as of , 2021, to be in effect upon completion of this offering.
4.3*	Shareholder’s Agreement by and among the registrant, David Vélez Osorno and Rua California Ltd., dated as of , 2021, to be in effect upon completion of this offering.
5.1*	Opinion of Campbells LLP, Cayman Islands counsel of Nu, as to the validity of the Class A ordinary shares.
5.2*	Opinion of Pinheiro Neto Advogados, Brazilian counsel of Nu, as to the validity of the BDRs.

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10.1+*	Form of Indemnification Agreement between the registrant and each of its directors and executive officers.
10.2+*	Nu Holdings Ltd. 2021 Equity Incentive Plan and related form agreements.
10.3+*	Nu Holdings Ltd. 2021 Employee Share Purchase Plan and related form agreements.
10.4+*	Nu Holdings Ltd. 2020 Omnibus Incentive Plan and related form agreements.
10.5+*	Nu Holdings Ltd. 2016 Share Option Plan and related form agreements.
10.6#*	License Agreement, dated as of January 29, 2014, between Mastercard International Incorporated and EO2 Soluções de Pagamento S.A., including the Acceptance Letter, dated as of January 29, 2014, from Mastercard International Incorporated to and EO2 Soluções de Pagamento S.A.; the Summary of Licenses Granted, dated as of January 29, 2014; and the Supplement to the Mastercard License Agreement, dated as of January 29, 2014, between Mastercard International Incorporated and EO2 Soluções de Pagamento S.A.
21.1*	List of subsidiaries of the registrant.
23.1*	Consent of KPMG Auditores Independentes, Independent Registered Public Accounting Firm.
23.2*	Consent of Campbells LLP (included in Exhibit 5.1).
23.3*	Consent of Pinheiro Neto Advogados (included in exhibit 5.2).
23.4*	Consent of Oliver Wyman Consultoria em Estratégia de Negócios Ltda.
24.1*	Power of Attorney (included on the signature page to the registration statement).

To be filed by amendment. All other exhibits are submitted herewith.

Indicates management contract or compensatory plan.

Confidential treatment has been requested for portions of this exhibit.

(b) Financial Statement Schedules.

No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.

ITEM 9. Undertakings

The undersigned hereby undertakes:

(a)

The undersigned registrant hereby undertakes to provide to the international underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the international underwriter to permit prompt delivery to each purchaser.

(b)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction

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the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c)

The undersigned registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of São Paulo, Brazil, on this day of , 2021.

	Nu Holdings Ltd.


	By:
		Name: David Vélez Osorno
		Title: Chairman and Chief Executive Officer


	By:
		Name: Guilherme Marques do Lago
		Title: Chief Financial Officer

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints David Vélez Osorno and Guilherme Marques do Lago, and each of them, individually, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by this registration statement that is to be effective on filing pursuant to Rule 462(b) under the U.S. Securities Act of 1933 and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

Name	Title	Date

	Chief Executive Officer and Director (principal executive officer)	, 2021
David Vélez Osorno

	Chief Financial Officer (principal financial officer and principal accounting officer)	, 2021
Guilherme Marques do Lago

	Director	, 2021
Doug Leone	Director

	Director	, 2021
Anita Sands	Director

	Director	, 2021
Daniel Krepel Goldberg	Director

	Director	, 2021
Luis Alberto Moreno Mejía	Director

	Director	, 2021
Jacqueline Dawn Reses	Director

	Director	, 2021
Rogério Paulo Calderón Peres	Director

	Director	, 2021
Larissa de Macedo Machado	Director

	Cognitect, Inc. Authorized representative in the United States	, 2021

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Purchase price

Moment of payment

Value of consideration

Paid in cash

Closing date

Total consideration

10,432