September 29, 2014
Nubank is a Brazilian start-up focused on financial services. The company announced its arrival on the world stage with two major developments: fundraising of $ 14.3 Mn and launch of a platinum credit card that can be managed using a mobile app.
The company said that the funding round was led by Sequoia Capital, Kaszek Ventures and private investor, Nicolas Berggruen. This is been seen as a major development in the Brazilian market as the country has lagged behind the likes of India and China when it comes to fundraising by fintech startups. This round of investment might bring in a welcome change in the country’s FinTech market, that has seen investments being confined to the companies that follow successful US e-commerce and social network sites till date.
David Vélez, founder and CEO of Nubank, used to work for Sequoia prior to starting his own firm in Brazil.
Brazil is considered to be the economic juggernaut of Latin America, and payment industry is still to see the kind of development it has seen in some other geographies. Today, getting a credit card in Brazil can take weeks, includes huge amount of paperwork and multiple visits to the bank. Nubank has stated that it wants to change this process.
Financial services is Brazil’s single largest market, but is dominated by 5-6 public entities and banks at the top. More than 100 Mn of the country’s population is under 29 years, and they want a differentiated, friendly and easy-to-use banking experience.
One of the major boasts for companies like Nubank in Brazil is that the country’s broadband penetration is huge, and headed largely through smartphone growth. Also, Brazilians are known to have one of the highest engagement percentages with technology and social media of any country in the world.
In an attempt to make the most out of this tremendous growth, Nubank has announced a MasterCard Platinum credit card that can be managed through the company’s Android or iOS app. The app allows the users to request a credit card, enable the card, manage the account, filter transactions and lock the card.
A number of companies have started to make their presence felt in the recent years. While Nubank is the latest to capture the limelight, Zoop and PagPop are well known names in pre-paid accounts market. Companies like PagSeguro and BRpay are already working on democratizing access to financial services across the country.
Then, there is Bcash that focuses on online commerce, GuiaBolso, that is a Mint-style financial management app and Rocket Internet that has introduced Square like payment platform.
According to David Vélez, Founder and CEO of Nubank, Nubank is not trying to be the first here, just the best.