Two fintech stars, legacy winner vs risky challenger, both with a fair risk/reward?
Latin America is the place to be right now for fintech startups, as it has produced some of the most impressive stories over the last decade, and Nu and Inter sit right at the center of that narrative. The continent is on an upward trajectory, by any metric: whether it’s quality of life, income, healthcare, democracy, etc. In an era of rising globalization, the emerging markets are arguably the largest beneficiaries. And if you play it nicely as a founder and CEO, ruthless execution can lead to exorbitant success.
I’ve followed Nu’s rise ever since I started investing a few years ago, and even owned it twice before, both times walking away with roughly 50% profits. Nu has capitalized perfectly on Latin America’s winning streak, showing only minimal signs of weakness, especially self-inflicted. But more recently, I’ve also delved deeper into Inter. So, here are my thoughts on both:
Let’s start with Nu, the “legacy” player, as much as you can call a neobank legacy. It dominates large parts of Brazil (over 60% of adults use it regularly), keeps expanding across LatAm, and benefits massively from smartphone adoption and financial inclusion. Management has shown that relentless execution is the only thing that works in a more volatile environment. Expansion, yes, but thoughtful, so as not to trip over your own feet. This led to outstanding growth, and there’s no debate about it: projected top-line growth north of 30% annually for the next three years, with net income expected to grow closer to 50%. That’s elite, and the market knows it by now.
The stock is already up more than 60% this year and trades at a forward P/E of around 29. Yes, that drops to roughly 15 on 2027 estimates, but those numbers still need to be delivered in a region where currency risk, governance issues, corruption, macro instability, and geopolitics are very real. I’m not saying Nu can’t do it, just that the risk/reward no longer screams bargain.
Inter is the smaller, less established player. It shows similar growth dynamics to Nu but operates with less scale, less brand power, and more execution risk. That’s why it trades much cheaper: forward P/E around 14, and closer to 8 on 2027 earnings if everything goes right. On paper, that’s tempting (really tempting for me, actually). But in reality, the risks are meaningfully higher. Cheaper doesn’t always mean better.
For now, I’m happy with my emerging market fintech exposure through dLocal, MercadoLibre, and Sea. All three are significantly cheaper and/or enjoy stronger market positions, in my view. Nu and Inter remain fascinating stories, and I’ll keep watching closely, but at current prices, this feels more like a fair bet than a great one.
