Tencent paid $180 million (R2.6 billion) for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA. REUTERS/Aly Song/File Photo

SAO PAULO - Chinese gaming and social media firm Tencent paid $180 million (R2.6 billion) for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

The move marks Tencent’s debut in Latin America’s largest economy at a time when Nubank, as the company is known, is preparing to make consumer loans by year-end, going beyond its current mainstays of fee-free credit cards and digital payment accounts.

In January, Nubank got clearance from the Brazilian central bank to offer loans to consumers.

Tencent is investing in Nubank through a $90 million capital increase, Nubank Chief Executive David Velez told Reuters. The Chinese giant is also paying $90 million to acquire partial stakes from current Nubank shareholders.

Tencent President Martin Lau said in a statement that the investment is aimed at helping Nubank “build a full-service personal finance platform.”

China’s largest social media and gaming company is already a major shareholder of online-only bank WeBank, and of online-only insurer ZhongAn Online P&C Insurance, and has invested in other fintech startups in markets from the Philippines to Germany.

Nubank has issued 5 million credit cards and has signed up 2.5 million customers to digital payment accounts - which allow users to make transfers, pay bills and earn interest on deposits - since its foundation in 2013.

Velez said that while Nubank did not need another capital injection this year, Tencent will help the company develop further in areas such as payments, consumer loans, engineering and machine learning.

Nubank has raised $330 million since its foundation in 2013 in six financing rounds. In its last financing round, led by venture capital firm DST Global Investment Partners, the Brazilian fintech raised $150 million.

The website “The information” reported earlier about Tencent’s investment in Nubank.

REUTERS