Building a Customer-Centric Culture with David Vélez, Founder and CEO of Nubank

In our latest episode of the Wharton Fintech podcast, Miguel Armaza is joined by David Vélez, Founder and CEO of Nubank, the largest independent digital bank in the world. Nubank has over 25 million clients and has raised over $1.2 billion from some of the most prestigious venture capital funds in the globe, including Sequoia, Ribbit Capital, DST, Kaszek Ventures, QED, and many more.

David grew up in a family of Colombian entrepreneurs. The concept of being your own boss was engrained in him daily and he always thought he would launch a company at an early age. However, after graduating from Stanford University, he found himself lost at the thought of starting his venture. He didn’t know where to even begin. So, he took a more traditional route and joined Morgan Stanley as an investment banker, which later led him to General Atlantic, focusing on growth equity investing in Latin America.

Armed with five years of investing experience, David went back to Stanford in 2010 to pursue an MBA. His goal was to leverage the MBA experience to find a business idea. However, shortly after starting at Stanford, he was approached by non-other than Sequoia Capital to lead their Latin American group. He took the chance, but after almost three years with Sequoia, it became evident that the startup ecosystem of the region was not robust enough for them, and the Latin American strategy was scrapped. David saw this as an opportunity and decided it was time to start something.

Inspiration

His painful experience of opening a bank account in Brazil, which he describes as “almost going to jail”, convinced him there was a better way of doing banking in the country. Not only was customer service terrible, but banks were charging astronomically high interest rates of over 400% to creditworthy customers. This is where Nubank was born.

During his years at General Atlantic, David had the chance to work alongside Nigel Morris, Co-Founder of Capital One (NYSE: COF) and now Managing Partner at QED Investors. David credits Capital One and Nigel as a big inspiration for Nubank, as a data-driven company with a culture focused on recruiting the best analytical talent. Another source of inspiration was Tinkoff bank, a Russian neobank with a similar analytical focus and excellent customer experience. Additionally, learning from technology companies like Amazon and Netflix convinced David that Nubank should be a technology company that happens to operate in financial services, and not a bank that uses technology. In his own words, “This makes all the difference”.

Culture

If there’s something that stands out when talking to David, it’s his dogged determination on building a customer-centric company culture that also takes care of its employees. In fact, back in 2013 when launching Nubank, he created two company presentations. One for investors that he used to raise his seed round and another one about company culture that he used to recruit his co-founders and first employees. He is clearly proud that the latter hasn’t changed much in the last seven years and he continues to deliver this presentation to every single new employee at the company.

Interestingly, in light of the COVID-19 pandemic, the Nubank culture has overperformed and employee engagement has never been better. Be it through the creation of a 20 million reais (≈US$3.8 million) fund for customer assistance or by providing over 1,000 remote service stations for their employees to work from home, the pandemic has allowed them to prove to clients and employees that they live and breathe these company values.

Post-COVID World

David argues that the current crisis doesn’t necessarily create any new trends, but instead accelerates several tendencies and behaviors that were already taking place. From digitalization to more flexible remote working policies, these trends are only accelerating. However, more importantly, David is convinced the pandemic is forcing companies to rethink their values and embrace a much broader view of capitalism, through a model that requires companies to show integrity and take care of their customers, their people, their communities, and the environment. As evidenced by their recent actions, Nubank is certainly adopting this philosophy.

Banking the Unbanked

Part of Nubank’s ambition from day one has been to bring competition to the oligopolistic Brazilian and Latin American banking industry and to decrease the cost of banking. However, their wider ambition also includes reaching the 250 million Latin Americans that aren’t included in the financial system. This ambition drove their partnership with WhatsApp and Facebook, given that WhatsApp is used by over 90% of Latin Americans. Through this partnership, Nubank customers would be able to send payments over WhatsApp. Notably, our interview was recorded on June 16, a day after the announcement of this partnership. However, less than a week later the Brazilian authorities suspended payments over WhatsApp noting concerns to “preserve an adequate competitive environment” and the matter has not yet been resolved.

Latin American Entrepreneurial Ecosystem

When asked about the current state of the Latin American entrepreneurial ecosystem, David is very optimistic but argues there’s still a lot of work to be done. We’ve certainly come a long way since his team at Sequoia passed on the region citing a lack of opportunities. Today, David believes Latin Americans are finally launching startups to solve local problems and not just copying successful models from Silicon Valley. However, many problems are still there and the region needs to produce more engineers and analytically driven professionals. In a world where the future will be driven by technology, David not only wants Nubank to succeed, but he also wants 20 more Nubank-like startups to thrive in the region.

You can find the transcript of this episode here.

About Nubank

Nubank is considered the largest independent neobank in the world, Nubank was founded in Brazil 7 years ago and currently has 25 million clients. The fintech launched its first product in 2014, a no-fee credit card that is fully managed by a mobile app and currently has more than 13 million customers. In 2017, Nubank launched its proprietary loyalty rewards program (“Nubank Rewards”), as well as a digital account which is currently used by more than 17 million people in Brazil. In 2019, the company began testing its personal loan product and its account for SMBs. During this year, Nubank started its international expansion and, currently, it has offices in São Paulo (Brazil), Mexico City (Mexico), Buenos Aires (Argentina) and Berlin (Germany). More information: www.nubank.com.br.

David Vélez

David is the Founder and CEO of Nubank, the largest independent digital bank in the world. Before founding Nubank in Brazil in 2013, David was a Partner at Sequoia Capital in charge of the firm’s Latin American investments. Before Sequoia, David worked in investment banking and growth equity at Goldman Sachs, Morgan Stanley and General Atlantic. David has a BS in Management Science and Engineering from Stanford University and an MBA from the Stanford Graduate School of Business.