Nubank CEO David Vélez joins Yahoo Finance Live to talk about his company's IPO listing, its global growth outlook, and its ability to develop a customer base in Brazil.
BRIAN SOZZI: One of the biggest IPOs of 2021 has arrived. Brazilian digital bank Nu Holdings has raised $2.6 billion, valuing the company at a staggering $41 billion at its IPO price. That makes it the world's most valuable standalone digital bank. The company does business as Nubank in Brazil, Mexico, and Colombia, and was backed in June by Berkshire Hathaway's Warren Buffett.
Joining us now for more on the company is Nubank's founder and CEO, David Vélez. David, good to see you. Congratulations on the debut. I know it's been a long time coming.
For those not familiar with Nubank, set the scene for us in some of these countries you operate. What is it like for a consumer to do banking in some of these countries, and why are they coming to you?
DAVID VÉLEZ: Thank you. Listen, it's very painful. There is a lot of pain in consumer banking. A lot of these countries traditionally have had five banks that own 80% to 90% of all the investments, lending, credit, savings. So for a very long time, there were really no alternative for consumers. They were basically at the mercy of the same five banks, which ultimately meant paying some of the highest fees in the world, some of the highest interest rates in the world.
And then that's for the people that could actually open an account. Then you had over 40% of the population that were completely outside the system, which meant even more pain and a huge opportunity for entrepreneurship.
BRIAN SOZZI: David, I imagine it was an exciting day back in June when Warren Buffett invested in your company. Did you get a chance to talk to him?
DAVID VÉLEZ: I did, yeah. I had the pleasure to meet him. I'm a big fan of him, always been. He's a phenomenal entrepreneur, phenomenal investor. So we were very proud of having him as an investor.
BRIAN SOZZI: Is he still an investor now, and what did he tell you?
DAVID VÉLEZ: He asked some really good questions. He put me on the spot, and he had done the homework on the company. So we were very excited to have this conversation. And, of course, he's along for the ride, so we're very happy.
JULIE HYMAN: David, it's Julie here. I want to ask about your customer base a little bit because, as you say, you are increasing accessibility to banking for your customers. I'm curious what some of the opportunities but also some of the challenges might be with these customers. Presumably, I'm guessing-- you correct me if I'm wrong-- we're talking about smaller deposits perhaps per customer. So are you dependent on it sort of being a volume business, on getting a lot of customers?
DAVID VÉLEZ: Yeah, I mean, scale is important, obviously, to be able to have a lot of efficiency, to then pass that efficiency back to the end consumer via no fees and lower interest rates. So partly what we're trying to do here is scaling with a really, really good product. Culturally, we're a company that is consumer obsessed. We focus very much on that user experience.
And consumers become our biggest ambassadors. They do all the branding for us. That translates into a customer acquisition that is one of the lowest CACs that we know of in the world, one of the highest Net Promoter Scores that we know of in the world. And, ultimately, that viral growth brings scale, which, again, we can pass back to the consumer via better, better fees and interest.
And this is both consumers that had bank accounts before that are tired of dealing with those big banks are coming to us and then also a lot of consumers that had never really had access that were putting their cash under the mattress and are excited to be able to invest well, to get a loan, to really deal with somebody that is thinking about them every day.
BRIAN CHEUNG: David, it's Brian Cheung. If you're not in the banking business, you should sell jackets because those jackets are pretty sweet. I want one. But I want to ask about--
DAVID VÉLEZ: We'll get you one.
Where are the areas of focus? Because I think one attractive offering, I imagine, for your customers are perhaps cross-border payments, the ability to transact with other countries, for example. How do you feel that plays into the strategy going forward after this IPO?
DAVID VÉLEZ: Yeah. So we're still very focusing in Brazil, which is our core market, expanding our entire portfolio. We started with credit card. Then we launched savings, lending, investments. We put out an investments platform that offer over 400 different investment funds to consumers in Brazil, and we're integrating that into our app. Then with credit, we also have 1.1 million small businesses and microentrepreneurs, and we're starting to offer them more and more products.
And very recently we also opened our customer base for third-party financial and nonfinancial services partners. So for example, we just added over 10 different e-commerces that can sell their e-commerce goods inside our platform.
So for Brazil, we're very focused on that expansion. And then the other vector of growth is new markets where we are in Mexico and in Colombia. In both markets, we started with a credit card first. Both are growing very well. In Mexico, we have just become the largest credit-card issuer in the market in only about 10 months. So those are the key areas of growth for the next few years.
BRIAN SOZZI: You're a pretty fascinating story yourself, David. Correct me if I have this wrong. So you moved to Costa Rica at the age of nine. You were working in your dad's button company at the age of 12. I mean, why do you think your path led you into banking?
DAVID VÉLEZ: It's a great question. Nothing to do between buttons and banking.
I think partly was just the entrepreneurship culture that I grew up with. It was not a big business, but I worked with my dad very, very early on. Seeing him start a business, seeing all the good times that that creates, you know, the challenges that that creates and the good times and bad times, generating a lot of kind of resilience. And I grew up just hearing that the path to do was to start your own business, that you should not have a boss, that you should own your own destiny.
So that was sort of what the radar was looking for as I was able to go to school and ultimately ending up in financial services in New York. But ultimately that brought me back to entrepreneurship. I felt that I needed to start something, and that opportunity sort of presented itself inside a banking branch in Brazil when I was there after I had just moved to try to open a bank account, and I could not understand why that experience had to be so painful.
I talked to all my friends in Brazil. Said forget it. You're a foreigner. No foreigner comes here and competes with big banks. Banks have been bad. They always will be, and there's nothing you can do. But I had to try, right? Because of that culture of entrepreneurship, I had to give it a shot and was very lucky to find a really, really phenomenal team. And, you know, the rest is history. We've been able to grow very fast over the past eight years.
BRIAN SOZZI: And now you're-- David, now you're a dad with, what, four kids. And you also signed-- you and your wife signed the Giving Pledge. What message did you want to send to them by signing that pledge?
DAVID VÉLEZ: Yeah, so listen, I mean, Latin America is a region of the world with a lot of income inequality, and technology is creating huge opportunities for entrepreneurs to create great companies. Ultimately I think what we wanted to do was to just make sure to lead and pledge to give back all of the wealth that-- having had the luck of building a business, send it back to the economies and the communities where we've been able to grow, try to invest in education, try and invest in health care, and, ultimately, improving the lives of so many people in Latin America that haven't really had the chance or the luxury that sometimes we had.
So part of what my wife and I wanted to do was obviously invest the next decades of our life doing really exciting entrepreneurship opportunities that helps people a lot, but at the same time, start creating a bit of an example around Latin American entrepreneurs to give more-- to give more and see philanthropy as a really exciting endeavor.
BRIAN SOZZI: Well, we look forward to following your story and the company's story. Nubank founder and CEO David Vélez, enjoy the rest of the day. I'm sure very exciting.
China's central bank cut its five-year loan prime rate by a larger-than-expected 15 basis points (bps), boosting global market sentiment even as COVID-19 cases in Shanghai climbed again. Travel and tourism stocks, financial services, healthcare and utilities led gains in Europe, rising between 1.5% and 2.0%, lifting the pan-European STOXX 600 index 0.7%. "It is not surprising perhaps that we have a little bit of a bounce today given the good news from China overnight and as we have had some very negative days this week," said Jonathan Bell, chief investment officer at Stanhope Capital.
KYIV, Ukraine (AP) — The fate of hundreds of Ukrainian fighters who surrendered after holding out against punishing attacks on Mariupol’s steel factory hung in the balance Thursday, amid international fears that the Russians may take reprisals against the prisoners. The International Committee of the Red Cross gathered personal information from hundreds of the soldiers — name, date of birth, closest relative — and registered them as prisoners of war, as part of its role in ensuring the humane tr
ZEE5 Global the world's largest platform for South Asian content has been continually releasing content in various formats in Hindi, Telugu, Tamil, Kannada, Malayalam, Bengali and other languages for its global audiences. This much-loved platform has now exclusively premiered the magnum opus RRR in its original language, Telugu and also in Tamil, Malayalam, and Kannada with English subtitles.
BERLIN (AP) — Former German Chancellor Gerhard Schroeder plans to leave the board of directors of Russian state energy company Rosneft as a backlash over his ties with Russia and its energy sector mounts. Schroeder, 78, is the chairman of Rosneft's board. Rosneft said Friday that Schroeder announced “the impossibility of extending his powers on the board of directors of the company.” The announcement came a day after German lawmakers agreed to strip Schroeder of his taxpayer-funded office and st
Crown Resorts Ltd's shareholders approved a $6.3 billion buyout by Blackstone Inc on Friday, but the deal faces further delays as it awaits nods from the regulators of states where the troubled casino operator ran its businesses. Crown's Chairman Ziggy Switkowski said the company would delay a conclusive Federal Court hearing - earlier scheduled for next week - to week starting June 6, as it was unsure of securing regulatory assent before that. In the scheme meeting, 92.1% Crown shareholders voted in favour of the deal, while 99.9% of the votes were in approval.
KYIV, Ukraine -- President Volodymyr Zelenskyy devoted his nightly video address to Ukraine’s demand that Russia be held financially responsible for the damage its forces are inflicting on Ukraine. Just on Friday, he noted, the Russian army fired a missile at the northeastern Kharkiv region, destroying a cultural center in Lozova, and also hit the cities of Odesa in the south, Poltava in the east and Zhytomyr in the west. In the eastern Donbas, where the Russian attack has been fiercest, he said
Blue Sky Uranium Corp. (TSXV: BSK) (FSE: MAL2) (OTC: BKUCF), ("Blue Sky" or the "Company") announces that it has made an application to the TSX Venture Exchange ("TSXV") to extend the term of the outstanding warrants as follows:
Indonesia will reimpose a domestic sales requirement on palm oil, the government said on Friday, a day after the world's biggest producer of the key edible oil reversed a ban on its export. President Joko Widodo's government has made several reversals on palm oil policy since November. The late-April export ban, an attempt to control high domestic cooking oil prices, shocked global edible oil markets and angered farmers as their product prices fell.
SEOUL, South Korea (AP) — U.S. President Joe Biden and South Korean President Yoon Suk Yeol said after meeting Saturday that they will consider expanded joint military exercises to deter the nuclear threat from North Korea at a time when there's little hope of real diplomacy on the matter. The announcement reflects a shift in direction by both leaders from their predecessors: Former U.S. President Donald Trump had considered scrapping the exercises and expressed affection for North Korean leader
Canadians are growing increasingly pessimistic about the economy as inflation drives up the cost of nearly everything and higher interest rates loom. The Conference Board of Canada said Friday consumer confidence decreased 11.7 points in May — the largest monthly drop since the pandemic’s onset. The consumer confidence index now sits at 88.1 points, down from the 2019 average of 113.6, according to a new survey of 3,047 people conducted in May. The poll indicated optimism over current finances e
The stock market's brutal year neared a grim milestone as the S&P 500's slide on Friday threatened to leave it in a bear market for the first time since March 2020, fueled by worries over sky high inflation, a hawkish Federal Reserve and future economic growth. The benchmark S&P 500 index fell below 3837.248 during Friday's session, a decline that on an intraday basis put it more than 20% below its Jan. 3 record closing high. If history is any guide, a bear market would mean more pain could be in store for investors.
SEOUL, South Korea (AP) — President Biden on Saturday signed legislation to support Ukraine with an additional $40 billion in U.S. assistance as the Russian invasion approaches its fourth month. The legislation, which was passed by Congress with bipartisan support, deepens the U.S. commitment to Ukraine at a time of uncertainty about the war's future. Ukraine has successfully defended Kyiv, and Russia has refocused its offensive on the country's east, but American officials warn of the potential
The pandemic bubble has burst, and interest rate reality strikes. Make the most of this market with five investing principles. The post 5 Investing Rules to Make Money in Today’s Stock Market appeared first on The Motley Fool Canada.
Don't be afraid of the current market downturn. Start researching solid dividend stocks now to make serious side income! The post New Investors: Embrace the Market Downturn and Start Making Serious Side Income appeared first on The Motley Fool Canada.
MindFuel is pleased to announce it has received a Natural Sciences and Engineering Research Council of Canada (NSERC) Promo Science grant in the amount of $600,000 over three years. The NSERC funding helps MindFuel support and engage Canadian youth in science, technology, engineering and mathematics (STEM) innovation.
Superior Gold Inc. ("Superior Gold" or the "Company") (TSXV: SGI) (OTC: SUPGF) is pleased to announce the filing of its management information circular for its upcoming Annual General Meeting on June 23, 2022, which includes the nomination of Mr. Michael Pesner to the Board of Directors of the Company as an independent director. After five years as Chairman of the Board, Mr. Mark Wellings will not be seeking re-election due to other professional commitments. Mr. René Marion, currently an Indepen
Suncor Energy Inc (TSX:SU)(NYSE:SU) stock has rallied this year. It may still have further to run. The post Canadian Oil Stocks Are Still Bullish appeared first on The Motley Fool Canada.
ShaMaran Petroleum Corp. ("ShaMaran" or the "Company") (TSXV: SNM) (Nasdaq First North Growth Market (Sweden): SNM) is pleased to announce that further to ShaMaran's news releases of April 5, 2022, April 7, 2022 and April 26, 2022, the Company's rights offering (the "Rights Offering") expired at 5:00 p.m. (Eastern time) today. Pursuant to the Rights Offering, each ShaMaran shareholder of record on April 13, 2022 who was an Eligible Holder or Approved Holder (as such terms were defined in the Com
If you buy four TFSA growth stocks in today’s market dip, they could convert $50,000 to $550,000 in 10-17 years. These numbers are possible. The post Convert $50,000 Into $500,000 in Tax-Free Income With 4 TFSA Stocks appeared first on The Motley Fool Canada.
ST. PAUL, Minn. (AP) — A proposal to legalize sports betting survived a test Thursday amid lawmakers' efforts to pull together the pieces of a package to spend Minnesota's enormous budget surplus with just days remaining in the legislative session. The bill, authored by Republican Sen. Roger Chamberlain, of Lino Lakes, would allow tribal casinos and the state's two horse racing tracks to offer sports betting on mobile devices and in-person. It differs from its House counterpart, which would only