$NU’s ARPU Growth Engine Is Just Getting Started
Understanding customer cohorts is incredibly important for $Nu Holdings Ltd.(NU)$ investors.
- Average ARPU is $15.9
- Mature ARPU is $30.8
It takes Nu between 60-72 months to get a new customer to the $15.9 ARPU.
A customer who’s been with Nu for 8 years generates $30.8 in monthly revenues, which is double the average Nu customer, 6x the 1-year-old customer, and 4x the 2-year-old customer.
This is because Nu is very good at upselling customers new products.
A customer goes from using a bank account and a debit card in the first year, to a credit card, savings account, children’s account, investment account, insurance, and a personal loan in year 6.
In the last 3 years, Nu acquired 60M customers that are on average using a few products and generating ARPU of below $10, likely the average is around $6.
In the next 5 years, this cohort will:
- Get millions of credit cards
- Put billions in the investment accounts
- Borrow billions.
So, doing some back-of-the-napkin math, we get 60M people going from $6 ARPU to $30.8 in 5 years, that’s $17.9B in additional revenue.
That’s about what Nu made in the last 4 quarters. So just by upselling this cohort of users’ existing products, Nu can double its revenues in the next 5 years. We are not even talking about increasing revenues of the current year, 5-8 cohorts, about releasing new products, entering new countries, or acquiring users in existing countries.
This company has incredible opportunities for growth!
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