What is Nubank? Nubank Review, Features

Nubank was founded in 2013 and is a digital financial services company in Brazil. Nubank's main business is virtual credit cards, and its products include NuConta and Nubank Mastercard. Users can freeze credit cards, apply for limits or increase credit limits through a mobile app.

About Nubank

The company’s differentiating factor is offering a credit card that is completely controlled through a mobile app. The app allows its users to track transactions in real-time, block their respective credit cards, request a limit increase and contact customer support.

As of September 2018, Nubank said it had 5 million virtual credit card customers, making it the sixth largest credit card issuer in Brazil, with about 2.5 million people having digital bank accounts. In January, Nubank also received approval from the Central Bank of Brazil to provide loans to consumers. In the next phase, Nubank plans to develop debit cards and ATM withdrawal services.

Nubank is headquartered in Sao Paulo, Brazil, and also has an engineering office in Berlin, Germany. With more than 1,000 of the best performing engineers, decision scientists, designers and business analysts, Nubank is committed to creating an inclusive, international and challenging work environment.

Founder and background

Nubank's founder and CEO: David Vélez is a Colombian, a fellow countryman of Pablo Escobar, the drug lord in the Netflix series Narcos. Vélez graduated from the Stanford University School of Finance, holds a bachelor's degree in management science and engineering from Stanford University, and an MBA from the Stanford University Graduate School of Business. Before starting his own business, Vélez was a partner at Sequoia Capital, responsible for Sequoia's investments in Latin America.

In 2013, the financial technology startup boom was booming in the United States. Companies such as Stripe, LendingClub, and Prosper received huge amounts of financing. Vélez decided to bring financial technology to Latin America.

Vélez chose Brazil, which has the largest population in Latin America. However, Brazil has poor public security, bank robberies often occur (even Uber has serious crimes such as robberies every week), and going to the bank is a nightmare for many Brazilians. They have to go through airport-like security checks and store their laptops and other items in lockers.

Vélez, who majored in finance, chose to enter the market with a low-cost virtual credit card. The credit card applications of most financial institutions in Brazil are not only extremely complicated, but also have an annual interest rate of 400%. However, Nubank can be applied directly through a mobile phone, with an annual interest rate of only 145%, and no annual fee, so it quickly grew.

It is said that Nubank is very popular with young people, and virtual credit cards will make them feel that they can control their accounts and spending independently. Nubank started from the credit card of banking business, which greatly improved efficiency and speed.

Serve

On the mobile client, Nubank provides users with three major services:

1. Real-time consumption reminders and establishment of consumption classification lists, remote control of credit cards, financial transaction taxes, exchange rates and installment payments, etc.

2. Nubank and MasterCard launched a co-branded credit card. Users can redeem their consumption points on the MasterCard official website and enjoy relevant MasterCard promotions.

3. Paper credit card bills are cancelled, and customers' credit card bills are only sent via email. Customers can use their cards to make purchases and withdraw cash at international shopping malls, but of course, a portion of the deposit and transaction fees will be charged.

Development History

-Nubank was founded in 2013 by founder David Vélez and co-founders Cristina Junqueira and Ed Wible.

-In July 2013, Nubank received US$2 million in seed round financing from Sequoia Capital and Kaszek Ventures.

-In 2014, when Nubank was still a small company, it received a $14 million investment from Sequoia Capital.

-On June 3, 2015, Sequoia Capital (Overseas), Tiger Global Management and QED Investors jointly invested US$30 million in Nubank.

-In 2015, the company lost 32.7 million Brazilian reals (about 8.81 million US dollars) and had operating income of 66.69 million Brazilian reals.

-In January 2016, Nubank completed a $52 million Series D financing round from Peter Thiel’s Entrepreneurs Fund.

-In December 2016, venture capital firm DST injected $80 million of investment funds into Nubank. The investment was led by DST Global, followed by Founders Fund, QED Investors, Redpoint, Ribbit Capital, Sequoia and Tiger.

-In 2016, the company's losses widened to 122 million Brazilian reals (about 39 million US dollars), and operating income increased to 77.09 million Brazilian reals.

-In October 2016, Nubank was jointly rated as one of the 50 leading global fintech companies by H2 Ventures and KPMG.

-In 2017, the company had 4 million active customers.

-In early 2018, Nubank received a new round of financing of US$150 million led by DST Gobal, becoming a unicorn.

-In October 2018, Tencent invested approximately US$200 million in Brazilian fintech unicorn Nubank at a valuation of US$4 billion, acquiring a 5% stake.