Fintech pioneer: David Vélez, CEO and co-founder of Nubank

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Born in Medellin, Colombia in 1982, David Vélez comes from a large extended family of entrepreneurs. His father, a co-owner of a button factory, had 11 siblings, all of whom ran their own businesses, providing young Vélez with an environment that thrived on innovation and disruptive ideas.

But Medellín was also a capital of crime where drug wars and cartels reigned supreme. The family suffered greatly and one of Vélez’s earliest memories was of leaving a mall with his family moments before it was bombed. Later, one of his uncles was kidnapped. Both events led Vélez’s parents to uproot the family to find a safer place to live.

Vélez had a passion for finance and innovation

At the age of nine, the family moved to Costa Rica, where he flourished, proved to be a good student and discovered a passion for the financial markets. Vélez attended a local German-language prep school, graduated valedictorian, and was admitted to Stanford University. By age 18, Vélez had moved to the United States and started school at Stanford, studying finance. After graduating, with a new MBA, he graduated as a financial engineer.

His time in California saw him explore a range of potential careers in the tech industry – and he considered various startup ideas, as well as positions at Google and Amazon.

But in 2012 Vélez returned to South America and moved to São Paulo. He had secured a highly sought-after position as an associate at Sequoia Capital. Then, aged 30, Vélez was hired to establish the VC in emerging market powerhouse Brazil. The location was perfect: a young, technology-hungry population, plenty of natural resources, and the seat of the world’s seventh-largest economy.

The project seemed exciting and full of promise – but before it even started, it was abandoned due to the shortage of qualified computer engineers in Brazil.

The event was a big disappointment for Vélez, whose entrepreneurial background meant he had always dreamed of launching a dynamic startup. But investors had been discouraged by the lack of on-the-ground innovators from Brazil’s education system.

Describing that time in an interview with Forbes, he said: “It was the day before my birthday, and it was a bit of a shock.

“You want to position yourself on the side of the market where there is a shortage. In the United States, there is an oversupply of good entrepreneurs. Someone with my experience and background is a commodity. In Latin America, there was a significant shortage.

In pursuit of the big banks of the Brazilian financial fraternity

Following the disappointment, Vélez set his sights on the establishment, which consisted of several giant incumbent banks that dominated Brazil’s financial sector. The system needed to be reformed – and fast. High fees, poor service offerings and an aversion to technology within traditional banks meant the opportunity was ripe for the picking.

According to reports, the vast majority of Brazilian banks were woefully unfriendly, charging annual fees even for basic credit cards. They also charged monthly fees for everything from fraud protection to SMS alerts. Data shows that even in 2019, fees accounted for nearly 40% of Brazilian banks’ revenues, compared to 15-20% for banks in other major South American countries.

Challenging the narrative in the Brazilian banking space

It was a brave move in a culture where organized crime and brutal business practices often result in personal harm. Vélez took the risk of stirring up a wasp’s nest, but he was determined to see his ideas pave the way for a new style of banking that would come to fruition.

Nubank was duly launched in 2013 – and has since survived and thrived through a myriad of disasters including recession, corruption scandals and the pandemic. Warnings from friends that he was putting himself in danger went unheeded. He was told that the banking fraternity in place would never allow him to succeed – or, perhaps, even to live… Vélez revealing to Forbes that a friend had told him: “They will kill you, they will kidnap your children”. .

Success for Nubank

Now one of the most valuable decacorns in the world, Nubank has climbed from strength to strength. Although it has been around for less than ten years, it already has more than 35 million customers. Much of the success can also be attributed to fellow founders, Cristina Junqueira and Edward Wible, who shared Velez’s passion for change.

Less than a decade after its inception, Nubank has 45 million customers and is valued at $45 billion. It is also backed by some of the world’s largest investors, including Founders Fund, Tiger Global and Sequoia.

A family man

Besides being a passionate philanthropist, Vélez has four children with his wife, Maria, the last of whom was born earlier this year.

A recent Bloomberg report also confirmed that the couple have pledged to donate the vast majority of their $6 billion personal fortune to philanthropic causes.

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