Nubank is now a certified Fintech Unicorn said to be valued around $10 billion. In fact, Nigel Morris of QED Investors called Nubank the most successful digital bank on the planet. “It came from nothing,” he said. QED lists Nubank as one of their many Unicorn investments.
Nubank began with online lending and then added more services like checking accounts and more recently asset management. While initially launched in Brazil, Nubank is now operating in Mexico, Colombia, and Argentina. You can expect Nubank to set up operations in other continents.
While digital banking may seem obvious to both a casual observer as well as a Fintech expert, Velez shared some of the skepticism he encountered by traditional financial services types when he first decided to become a Fintech entrepreneur.
Consumers were paying very high fees and very high-interest rates. Of course, things were good for the establishment banks which operated in a bit of an oligopoly.
In 2012, he said the experience of visiting a brick and mortar bank was of waiting in line for an hour to enter a branch, under high security, and then waiting four to five months to get an account. This type of poor service was taking place at the beginning of the smartphone revolution when internet penetration was shooting through the roof.
Importantly, about 25% to 30% of their customers use Nubank as their primary bank account – a good percentage – but that still leaves around 70% that use an old bank for their financial services. Velez sees this as a huge opportunity. And that’s their mission in the countries where Nubank operates.