David Vélez, Christina Junqueira, and Edward Wible (2021)

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Today’s letter is Nubank’s F-1 shareholder letter from David Vélez, Christina Junqueira, and Edward Wible. In this letter, the cofounders lay out the spark of their foundation, their mission to fight complexity to empower people, their drive to make an impact, the core values that have guided them along the way, how they are leading a new wave of 21st-century LATAM companies, and some thoughts on the future.

David Vélez is the Founder and CEO of Nubank, the biggest independent digital bank in the world and leading Latin American financial technology company. Before founding Nubank 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.

Cristina Junqueira is the Cofounder and Brazil CEO of Nubank. Prior to founding Nubank, Cristina spent several years at Itau Unibanco S.A. where she worked with products and marketing in consumer credit and cards. Cristina began her career in strategic consulting at the Boston Consulting Group.

Edward Wible is the Cofounder and CTO of Nubank. Before starting Nubank, Edward worked in private equity at Francisco Partners, initially in San Francisco and then in London. Edward started his career as a management consultant with the Boston Consulting Group, where he covered Financial Services, Pharmaceuticals, Entertainment, and Non Profit.

I hope you enjoy this letter as much as I did!

Related Resources

• Sequoia Capital

• General Atlantic

• FinTech

In mid-2012, I entered the branch of one of Brazil’s largest banks to open my first Brazilian bank account. As I approached the first bulletproof door that was flanked by armed security guards, I sensed this was not going to be easy. During the following four months I spent long hours in queues, calling the call center, and returning to the bank branch with an increasing number of documents, until finally a bank account that would charge hundreds of reais per year in fees was approved in my name. The entire experience was incredibly frustrating. As I tried to reconcile this experience with the immense profitability of Brazilian banks and the low penetration of banking in this country, I realized that this was possibly the entrepreneurship challenge I had been looking for since I was a child working in my father’s button company in Costa Rica.

This experience marked the beginning of an almost decades-long process of reinventing the entire financial services industry in Latin America, aiming to empower hundreds of millions of consumers with simple and transparent products that enable them to live a better life. As part of this process, we set out to build a fundamentally different enterprise that could lead the way in redefining what a Latin American company in the 21st century looks like.

Latin America is a region of over 650 million people and has the potential to be one of the most powerful economic engines in the world.

Unfortunately it is also a region where some of the largest industries are oligopolies, which have limited competition, innovation and access. Conventional wisdom historically held that it was impossible to enter and compete in some of these protected sectors, such as consumer banking, that were regarded as off-limits for entrepreneurs.

When Cristina, Ed and I first met, we realized very quickly that we shared a common vision: we wanted to invest the next few decades of our lives building something which had the potential to make an extremely positive impact. All three of us saw a massive opportunity, using technology, data and truly thoughtful service to eliminate the complexities and anxieties that customers faced everyday dealing with Latin American banks, by creating a truly new experience, not just a digital copy. So we built Nu, with a mission to empower our customers by fighting against all the pervasive complexity that hinders better choices in their daily lives.

So far we think it has worked. Over 48 million customers in Brazil, Mexico and Colombia have chosen Nu, saving over 113 million hours of waiting time inside bank branches or on hold with call centers, and over US$4.8 billion in banking fees, based on our estimates. As of September 30, 2021, over 5.1 million people had selected us as their first bank account or credit card. Over 1 million small and micro entrepreneurs have decided to use our banking products to start and run their businesses more efficiently. We have heard many inspiring customer stories from  people who finally managed to save enough money to buy a home, start their own business or put their kids through college.  And it makes us want to do more.

We want to help shape new Latin American communities that offer greater opportunities for everyone, and we believe a more efficient and competitive financial services sector translates into much more for everyone: more access, more positive customer experiences, and ultimately more money in people’s pockets to be invested in their families, education and healthcare. These can improve the quality of life for millions of people, lower income inequality and add several points of additional GDP growth over time. To achieve our mission, we developed a set of core values that have guided us along the way: 

We want our customers to love us as loyal and enthusiastic “fans” — Any product or business decision at Nu is made walking backwards from the customer. We build solutions that go beyond just a product function or a business service and instead create an emotional connection through memorable customer experiences. We do this because we believe that, while in the short-term an amazing customer experience may sometimes diverge with maximizing profitability, in the long run they will become completely aligned as the loyalty and trust of our customers means they prefer to do business with us for a much longer period of time.

We are hungry and challenge the status quo — We have a high sense of urgency to improve the status quo. We reason from “first principles” so that we avoid being consumed by conventional wisdom that inhibits progress. We have taken this value everywhere: from believing we could challenge this industry with maniacal customer focus, to the way we built our team, the technology choices we made, and the approaches we have taken to service our customers, many times unconventional. 

We build strong and diverse teams — We seek to hire the best and most talented people regardless of their CV or pedigree. We believe that diversity, in all of its forms, is an ingredient for more creativity, problem-solving, and real innovation.

We think and act like owners, not renters — We own our destiny, see ourselves as protagonists of the story we live, and solve problems wherever we find them, independent of title, tenure, or responsibility. We treat all our employees as partners, which means our relationships are based on humility, respect, transparency and extreme accountability. We foster a culture ruthlessly focused on serving our customers, with zero power or status symbols, where there is no ego and making mistakes and learning from them is actively encouraged and is a key element for innovation.

We pursue smart efficiency — We aim to minimize waste in all of its forms to benefit all our customers and society. We believe in using technology to build proprietary systems that give us scalability while making sure we optimize the use of all the constrained resources we have as a company: our people, our time, our attention and our capital. As we gain efficiency, we are able to pass those gains to our customers, continuously working to provide lower and lower fees and rates.

We challenged ourselves to build an organization that would come to lead a new generation of Latin American companies. We were the first Brazilian investment for some of the best technology investors in the world, and with their help, we showed it was possible to challenge some of the largest entrenched incumbents in this region by doing the following:

Developing a digitally-native, cloud-based technology platform — We believe we are in the early stages of technology, data, and customer-centric approaches revolutionizing all industries and all geographies globally. So, we made sure that Nu was a technology and data-driven business from day one. We made the unusual decision to build our own core banking platform and processor from the ground up, using a modern, cloud-based architecture and integrating data science and machine learning across key  processes. We own and have built all of our key technology, so we are in control of our destiny. We also designed our cultural principles and ways of working so that they are “optimized” to create the best environment to attract and retain the very best software engineers, data scientists, product managers, and designers.

Building a culture of trust, empowerment and autonomy — We searched the globe to find the very best talent, building a world-class company out of São Paulo. We looked for this talent everywhere we could find principled, creative problem solvers from all possible backgrounds: philosophers, chemists, graduates in performing arts, filmmakers and statisticians, among other disciplines, work at Nu. Then, we aimed to provide everyone with an environment of trust and autonomy, so they could do the best work of their lives.

Aligning interests more equitably — We challenged ourselves to create a culture where our people could work hand-in-hand as partners and collaborators to build something great, rather than just employees working for a paycheck. As we tried to align our incentive structures to achieve this, we often heard “Brazilian employees don’t value equity…you will waste those stock options”. We are proud this was one of many pieces of advice we dismissed, and today can say that nearly 80% of Nu employees own a stake in our company, participating in the value that we are creating for our customers and our shareholders.

Pursuing the highest ethical standards — Many Latin American oligopolies evolved in a historically tight knit environment between the public and private sectors. Since the first moment of our existence, we wanted Nu to represent a new generation of companies that would succeed based on the merits of our demonstrated value rather than through the benefits of special connections. We wanted the right to compete and win, strictly by achieving the love and trust of our customers, and building great products that improved their daily lives.

Focusing on the long-term with solid business fundamentals — We committed ourselves to building an institution that would last for decades and therefore made business and culture decisions to optimize our value in the long run. However, since we were in a region of the world that lacked easy access to venture capital, we could not afford to waste resources and needed to have strong business fundamentals from the very beginning. As we move forward to become a publicly traded company, we reaffirm our commitment of optimizing for the long run, even if this commitment might at times have short-term profit implications. We are playing the long game.

Today Nu is one of the largest digital banking platforms in the world  (based on number of customers), and we are still in the early days of our journey.  As we write this letter, we reflect on how challenging, exhilarating and rewarding our journey has been to this point, and we are:

Thoughtful of every “Nubanker” who has joined us in this big and ambitious mission of having a true impact in people’s lives and reinventing an outdated system.

Mindful of every Nu customer, who has trusted us and joined our purple revolution, and our responsibility to serve them to the very best of our abilities.

Grateful for every Nu investor and partner that has supported us on this path, with their valuable advice and unconditional trust.

Inspired by every underdog that ever dared to challenge the mighty, and succeeded, building a better world through their journey.

We can think of no better way to honor the trust placed in us since our earliest days, than to offer a piece of Nu in the form of one Brazilian Depository Receipt to millions of our customers in Brazil through our NuSócios program. In sharing a part of Nu, we hope to strengthen our relationship through the continuous enhancement of our service and portfolio, as well as sharing the overall progress and value we create as a company. After all, our millions of customers will soon become our partners and shareholders

We hope to welcome you as part of a new generation of shareholders and we want to use this milestone to commit to you that we will continue building Nu based on the principles mentioned in this letter. We are deeply committed to making this the best work of our lives. We will challenge ourselves to find new and better ways to serve our customers and we will consistently strive to have a positive impact on society. We truly believe Nu is special, and we look forward to partnering with you in  our journey that has just begun. 

Thank you,

David, Cristina, and Ed

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