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NuBank, Reinventing Financial Services in Latin America


Industry: Banking, Fintech
Country: Brazil
CEO: David Velez
Website: http://nubank.com.br/
HQ: São Paulo, Brazil
Employees: 150 (as of 2015)

With an economy that has been declining for three straight quarters, and a strong and highly profitable banking sector that seems too strong to be contested, Brazil may seem like an unlikely country to innovate in the financial services sector. Yet, in just three years since its foundation, NuBank has proved that the Latin American giant is willing to receive a new player with its arms wide open.

Founded in 2013 by David Velez, a former Sequioa Capital exective and Stanford graduate, Nubank has set itself to revolutionize the way Brazilians think about banking services. By offering a fully digital service where users have full access to their accounts and operations through an App, the company is able to run a completely branchless and paperless operation, that keeps it costs down, while allowing for a consistent experience throughout its client base.

And while the whole experience may be limited to a home banking application, NuBank’s app is really distinct to all others available in Brazil. Besides allowing clients to check out their balance, pay for services and perform money transfers, this app allows them to keep track of their movements and purchases done through a MasterCard credit card in real time, to block and unblock the usage of their card instantly, and to tag spending and income, in a way that lets them organize money in a much simpler – and visual – way than any other bank. All for free, as the bank only makes money through the interests of the money held in it by its clients, and not through commissions as most institutions do. And while the absence of physical locations may seem like a burden for customers urging for attention, the app includes a live chat that allows users to chat with a customer support representative 24/7, something certainly distinct for an industry where opening times are most certainly limited.

Being at the height of innovation in the financial sector places NuBank in a very advantageous position. Simple Bank, a similar venture based in the United States, was recently purchased by the Spanish juggernaught BBVA for USD$117 Million, mostly because of its innovation in terms of user experience, something most major banks are investing heavily in.

It is perhaps for this reason, but also for the enormous potential NuBank’s technology shows, that the company has received massive unprecedented investments from a varied set of funds. In its short three years of existence, this virtual bank has raised a total of USD$98.3 Million in four different rounds. The latter, held in January 2016, accounted for more than USD$52 Million, which set the company’s valuation in over USD$500. This round was led by Sillicon Valley’s VC firm Funders Fund, led by PayPal’s co-founder and very active venture capitalist Peter Thiel, but it also included the New York based Tiger Global Management, and the company’s earlier investors, Sequoia Capital, and Buenos Aires based Kaszcek Ventures, both of whom extended their participation in the company.

Often deemed as Brazil’s hottest Startup NuBank is not only attractive to investors, as over 700,000 people have signed up to become users of their services, and while most of them have not yet been served – as, for now, this is an invitation-only product – this proves the massive thirst for innovation customers have in this industry, and the limitless potential this company has to serve them.

It is without a doubt we will hear more and more of NuBank in the years to come, as they become a top player in their country of origin. All thanks to their massive leaning towards innovation and new technologies.

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