To answer “what is Nubank” is not a simple task. In a nutshell, Brazilian Nubank is a neobank. Not an ordinary one, but the largest digital bank in the world, the major fintech in Latin America, and the first Brazilian startup to reach the $10 billion mark.
Who owns Nubank? Nubank was founded in 2013 by Colombian David Vélez, Brazilian Cristina Junqueira, and American Edward Wible as an alternative to the red tape and exorbitant fees of the traditional banks.
Nubank is helping to boost financial inclusion in Latin America, where a large amount of the population is unbanked. Nubank Brazil helped to transfer the emergency aid for low-income people during COVID-19 pandemic, boosting financial inclusion. Nubank is also the chosen one for most Brazilians that adopted Brazil’s instant payment system, PIX, powered by the country’s Central Bank.
Nubank Brazil: How it all began?
Nubank’s story begins in São Paulo, Brazil, as a small startup focused on solving financial problems using technology. The startup has rapidly grown as it raised large investments rounds (an impressive $400 million in 2019 and $300 million last year, the region’s largest rounds) from some of the main global tech investors such as Sequoia Capital and Kaszek Ventures (which were the first ones), Tiger Global Management, QED Investors, Founders Fund, DST Global, Redpoint Ventures, Ribbit Capital, Dragoneer Investment Group, Thrive Capital, and Tencent, besides TCV (one of the largest growth equity firms in Silicon Valley, investor of players such as Netflix, Airbnb, and Facebook).
In September 2020, it was chosen among 16,000 firms across the continents as one of the most promising fintechs of 2020, according to CB Insights’ Fintech 250 list. Last year, Nubank also announced it has zeroed its carbon footprint, and it is the first banking institution in Brazil and Mexico to do so.
Nubank Mexico, Nubank Colombia: Nubank international expansion
Nubank‘s purple card has already won over Brazil – and now it wants to rule Latin America. The region was chosen as Nubank international expansion main market. In March 2020, it launched its first product as Nubank Mexico: a Mastercard international credit card with no yearly fee.
In October 2020, it officially announced its arrival in Colombia, saying that it will invest $150 million for the next eight years in the country. Now, Nubank is a global firm with 2,800 employees and offices in São Paulo, Bogota, and Mexico City, besides two software engineering hubs in Berlin and Buenos Aires. Nubank Argentina is the fintech’s next target in Latin America.
About 30% of Nubank’s team belongs to the LGBTQIA+ community, and it has 40% of women across all positions, in all experience levels. After a recent interview when one of Nubank’s co-founders, Cristina Junqueira, said that Nubank could not “level down the playing field” when asked if the requirements for working at the fintech were not limiting the inclusion of Black professionals in the company’s leadership, Nubank‘s founders said in a letter that the startup would fund the training of 1,250 black programmers. It also pledged to invest BRL 20 million in initiatives to increase Black people in the company’s staff.
Is Nubank a bank?
Although it is seen as a digital bank, with products and services that compete with other financial institutions, Nubank is formally not a bank yet. It operates as a payment institution and a financial institution but does not have a bank license for the custody of funds or financing.
As a regulated financial institution, however, Nubank can operate in retail banking. Gradually, Nubank is launching products and services and is likely to obtain a bank license in Brazil in the near future.
And it is doing so via acquisitions of companies like the larger independent broker in Brazil Easynvest; Vérios, a fintech known for its investment robot Ueslei; and American Cognitect, a company known for its Clojure and Datamic programming systems.
In a statement sent to the Brazilian newspaper Valor Econômico, Nubank‘s CEO and founder David Vélez said that 85% of its employees were recognized with a promotion or salary increase in 2020, a year marked by the adverse effects of the coronavirus pandemic on the economy. In addition, more than 80% of employees became partners, receiving “restricted stock units” (MSW) from the company.
Nubank is a pioneer in Brazil in considering 100% of its employees eligible for the stock bonus program. In 2020, around 950 professionals were hired by the Brazilian fintech. In all, Nubank has more than 2,000 employees, from more than 25 nationalities.