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

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

But Medellín was also a crime capital where the drug wars and the cartels ruled. The family suffered greatly, and an early memory for Vélez was leaving a shopping mall with his family just moments before it was bombed. Later, one of his uncles was kidnapped. The two incidents resulted in Vélez’s parents uprooting 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 and proved to be a good student – ​​and discovered a passion for the financial markets. Vélez attended a local German-language prep school, graduated as valedictorian, and won admission to Stanford University. At 18, Vélez had moved to the United States and started his degree at Stanford, studying finance. After graduating, with a newly created MBA, he qualified as a financial engineer.

His time in California saw him explore a number 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 much-coveted position as a partner at Sequoia Capital. Then, at age 30, Vélez was hired to establish VC in emerging market powerhouse Brazil. The location was perfect: a young, tech-hungry population, plenty of natural resources and home to the world’s seventh largest economy.

The project looked exciting and promising – but before it even got off the ground, it was dropped due to a lack of computer science engineers graduating in Brazil.

The event was a big disappointment for Vélez, whose entrepreneurial background meant he always wanted to launch a dynamic startup. But investors had been discouraged by the sheer lack of innovators on the ground coming out of the Brazilian education system.

Describing the 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 scarcity. In the US, there is an oversupply of good entrepreneurs. Someone with my experience and background is a commodity. In Latin America there was considerable scarcity.”

Going after the big banks in the Brazilian financial fraternity

After the disappointment, Vélez turned his sights on the establishment, which consisted of several giant incumbent banks that dominated Brazil’s financial industry. The system needed reform – and quickly. High fees, poor service offerings and an aversion to technology in the old banks meant the opportunity was ripe for the taking.

According to reports, the vast majority of Brazilian banks were terribly customer-unfriendly, charging annual fees for even basic credit cards. They also charged monthly fees for all services, from fraud protection to text message alerts. Data shows that even in 2019, fees accounted for almost 40% of Brazilian banks’ revenue, compared to 15-20% for banks in other leading South American countries.

Challenging the narrative in Brazil’s banking room

It was a brave move in a culture where organized crime and brutal business practices often result in personal injury. Vélez risked stirring up a hornet’s nest – but was determined to see his ideas pave the way for a new style of banking to be realised.

Nubank was duly launched in 2013 – and has since survived and thrived through countless disasters, including recessions, corruption scandals and the pandemic. Warnings from friends that he was putting himself in danger were not heeded. He was told that the incumbent banking fraternity would never allow him to succeed – or, possibly, even live … with Vélez revealing to Forbes that a friend told him: “They’re going to kill you, they’re going to kidnap your children ».

Success for Nubank

Now Nubank is one of the world’s most valuable decacorns, and has climbed from success to success. Although less than a decade old, it already has over 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 founding, Nubank has 70 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

As well as being an avid 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 has pledged to give the vast majority of their US$6 billion personal fortune to philanthropic causes.