$70B Nubank Eyes US Banking (Co-Founder Reveals Strategy)

Speaker A: Today I have a really special conversation with Christina, the co founder of Nubank. Nubank is one of the most successful fintech companies in the world. They have a market capitalization of over $70 billion. They have over 99 million monthly active users.

Speaker B: So today, out of our customers In Brazil, over 60% of them will say that Nubank is their primary banking relationship. We're the number one financial institution in Brazil today in terms of primary banking relationships.

Speaker A: For context, that's more than bank of America and Wells Fargo combined, but most Americans have never heard of them. However, that's about to change because they have just applied for a US bank charter, which means they're going to be bringing their products to the US So

Speaker B: we're cautiously optimistic about how we've been greeted by the US regulators about our ability to solve some of these main

Speaker A: points in this conversation. We're going to cover why they decided to launch here, but uh, more importantly we're going to dive deep into their backstory of what it took to build the company all the way from launching their very first credit card in Brazil in 2014 to taking the company public in 2021 and beyond.

Speaker B: I was pregnant with my third child. I was eight months pregnant, ringing the nice sea bell. So it was a very interesting moment.

Speaker A: It's a really great story. So I am excited to dive in. Well Christina, it's great to have you here today.

Speaker B: Oh, thanks for having me.

Speaker A: Uh, I'm excited to dive into the whole backstory of NewBank. But first tell us why you decided to look into opening operations in the

Speaker B: U.S. uh, yeah, so that's very exciting news that we have fresh out of the, out of the press. Uh, we've been looking into expanding internationally beyond Mexico and Colombia for a few years now. Uh, we felt that we also needed to earn the right to do the next thing. Um, that's how we've always thought about every next step that we've taken in our, in our, in our history. Um, and when we look into the trade offs on, you know, the size of the market and the uh, and how interesting the opportunity seems while at the same time trying to balance our ability to actually, you know, come up with something that would be interesting and relevant in such market, The US is such a, such a sweet spot because of course like is the largest, most relevant, most sophisticated, you know, biggest, uh, market out there for financial services. Of course. Um, but when we look into the specifics of the customer experience, we do see a lot of opportunity for us to bring something, something interesting, something Relevant, something fresh that could dramatically improve the customer experience when we compare to what we, what we've been able to do in Brazil and Mexico and Colombia. And we also believe that our thesis, which is if you have a cost advantage, which we do, like if you have structurally lower costs, right, like lower cost to serve, lower cost of funding, lower cost, uh, to acquire lower cost of credit, you can help but build better products, right, like because you're able to pass on that efficiency to customers in the form of uh, no fees or lower fees or lower rates or more uh, uh, credit approvals or a uh, better customer experience. Um, so we really believe that the proprietary technology and all the knowledge that we've acquired over the past 12 years building this company will also be able to be deployed in the U.S. market. Um, but of course, like we want to take that, you know, one step at a time when we know that there are at least a few hundreds of thousands of customers of ours already leaving and working in the U.S. uh, and they're asking us to serve them on this side of the border. Uh, but we also expect that this value proposition, a much more efficient uh, tech, uh, forward type uh, of product experience will resonate with a much wider uh, um, set of customers. So we're excited about this possibility.

Speaker A: Yeah, you guys have gotten very good at building incredible products experiences on a very low cost structure. I think in your early days you're making tens of dollars per user per year. Now for your most mature cohorts it's $300, which is remarkable in markets like Brazil that are I think about 1/5 the US GDP. But that product experience plus the cost structure advantage and then it's a huge market where you already have customers. So I am very excited as someone who likes to see innovation and competition for you guys to come to the US for our American audience though, I appreciate some of the stories, but a lot of people haven't heard the story of Nubank. And so I want them to hear basically the whole story and go all the way back to the beginning. So let's go back to when you first started, around 2013. And I hope you don't take this the wrong way, but it's kind of three misfits who came together to start the company. So what convinced you originally to join David, the founder, uh, that your co founder, uh, to start on this mission?

Speaker B: No, I, I would definitely characterize uh, this as, as three misfits. I think that's appropriate. Uh, so yeah, I had just quit my job. I was working for uh, the largest incumbent bank in Brazil. I had spent, uh, five years with them, running different parts of the businesses, uh, of their businesses, but really feeling very powerless, you know, um, because there was a lot that I didn't agree with. There was a lot that I want to do differently. Um, but it's really hard, you know, to change things from within. Is. It's really like this gigantic company that has 100,000 employees that frankly doesn't need to do a lot of things differently because they were doing really well. You know, like, there was effectively no competition, so they really, you know, didn't bother. And I spent my last year there, like the best part of my. My last year, trying to convince them to do something differently. Ah, at the end they were like, no, we'll just, you know, we'll just come up with another fee, and that's, you know, that's okay. And that. That. That was really like, you know, the. The last job for me, and I. I decided to resign. And I thought I was done with financial services because these guys were kind of like the, you know, the best, uh, uh, the best business around, and

Speaker A: if it was the best business round. But you have this quote that I really like, which is, when you were there quote, nobody even talked about the competitors. And the customer's perspective was actually very, very low in the hierarchy of priorities. So that was basically the best at the time.

Speaker B: Yeah, so that's very true. It was all about, you know, a lot of. A lot of people's, like, personal agendas, you know, and a lot about, like, what they personally wanted to achieve and how that related, of course, like, to compensation. So it was very hard to have any structured, real effective conversation about either competition or what customers wanted. Like, that was very low on the. On the priority list. Very. For sure. So when I met Daveed, and to your point, like, he was also, uh, not an entrepreneur. He was. He was not an operator. Uh, he came from the investing, investing side. So he was coming out of venture capital. He had been looking for companies to invest in Brazil for a while, while. And frankly, there wasn't much. Um, and it was kind of scratching his head and saying, why isn't anyone tackling this opportunity? We're looking at this industry that is the largest industry in the country in the region, really, with one of the most horrible customer experiences out there, uh, charging the largest fees, the highest interest rates, and no one seemed to be doing anything about it. And he was looking for somebody who knew the industry from within, um, but that also shared the same Mindset, right like that, that also saw the opportunity to do something different and the one that was willing to, you know, to put the energy and in the, you know, and the resources behind it. So, so that's how we met. Um, I didn't quit my job to start a company. I thought I was going to land somewhere else on a company that, that needed, you know, a lot of, um, um, hands on, uh, energy and that wanted to go through a transformation. And we just ended up like, agreeing that this was too big of an opportunity to pass. So I remember the day that I met David and I remember telling my husband, I was like, you know what, like this is, this is what I'm supposed to do because I, I had taken some time off before sabbatical was a thing, you know, before everyone was, was taking sabbaticals. But I, I really wanted to, to give this some thought. I wanted to be really thoughtful about the, the best use of my time for the next like five to ten years of my life. And that's when I, when I met David and I was like, okay, this is it, you know, I, I, I cannot pass on this. So that was it.

Speaker A: I also love the story. Sequoia had hired David to come and look at investing in Latin America. And then after about a year they're like, there's nothing here worth investing in. And uh, so they, on very good terms, let him go. And he says, hey, I'm going to do this. And then you're a banker who decides to go and join him. Maybe tell us about your third co founder, uh, as well.

Speaker B: Yeah. So Edward was, uh, also someone else that was a bit of a misfit. So he does have a, um, computer science degree from Princeton, but he wasn't, so he was a consultant before, like me. So we were both at BCG at some point in our careers, like early in our careers. Then he worked for a private equity firm. Um, but he wanted to build a company. Like, he wanted to build something. And he joined us as our cto. He landed in Brazil the first day that we started working together. It was May 6, uh, 2013. He didn't speak a word of Portuguese, carrying two pieces of luggage with everything that he owned and was like, okay, let's do this, you know, um, so it was very interesting. Um, it was a very different group of people. So it was an American. David is of course like Colombian, but he lived most of his life in Costa Rica, although he did, he's US educated. He went to the US for college and business School and me being Brazilian. So it was a fairly interesting group of people coming together, uh, to build something fresh, uh, with fresh pairs of eyes, looking into the different problems that we, that we saw in that industry.

Speaker A: Yeah, and then talk about what you decided to build and the launch of your very first product.

Speaker B: Yeah, so we, when we looked at the opportunity in Brazil, one of the things that we, that we saw was that on the credit card space there was a huge opportunity because we studied a lot. In the case of Capital One, uh, of when it was first built in the US There was something that we put a lot of thought into it, you know, trying to understand how they came about it, like how they disrupted the market. But this was of course like before the Internet, uh, and we saw a lot of similarities to the, um, to the US Market for credit cards when Capital One was, um, was born and when we were starting a bank, you know, in the sense that, ah, products was, products were very much, um, commoditized. You know, aprs were all the same. There was very little differentiation. Experience was very bad. Um, products were kind of like being pushed down, uh, to people, not necessarily people like wanting it or feeling any type of, um, desire, uh, for those products, uh, lots of very little differentiation, lots of commoditization. So uh, when we looked into that, we saw an opportunity for us to of course like, use technology, use data, use design, you know, to really think differently about uh, how that product came together. Of course, like my last year, this big incumbent bank was trying to do precisely that, was trying to reinvent their credit card business. So that helped because I had already put some thought into, uh, what we should do. One of the things that really bothered me was uh, it was this, uh, this very much push product. There was no pull, you know, like there was uh, there was no demand really for it, you know, except for adverse selection. Right. Like, of course, uh, except for like people that were very credit hungry that would take anything that you would put in front of them. But of course, like that risk was, was very high. Um, so what we wanted to do, like the, you know, the secret sauce, so to speak, was like, what if, what if we do something, uh, what if we design a product people actually want? You know, can you imagine that?

Speaker A: Good idea. You should do that.

Speaker B: Good idea. Right? Like, um, and, and, and that's what we set out to do. We wanted to, um, uh, to do something that, that would impress people that people would use and they would, would say, whoa, like, this is a, an actual like good experience. This is Actually neat. You know, I, I want this. And that will get them talking about the product. Right? Because the other belief that we've also shared was that when you have great products, you don't have to spend a lot of time and a lot of money marketing. You know, you don't have to spend a lot trying to convince people that they, they gotta try this because customers will do that job for you. They won't stop talking about something that they, you know, they rave about a product, uh, if they really like it. So that's, that's what we try to do with the credit card in the beginning. So we, we came up with a very unique design. Of course, it was a purple card, which was something very new. Um, I remember when we first started talking to MasterCard or even like the card printing, uh, companies that were like, purple, you know, like no one that, that didn't exist. It was a color that, you know, was, Was completely off the grid. You know, creating a financial institution, a bank that was purple felt very different. Of course, like today, this is, this is, you know, not, not a, a thought that will give people, like, such a, you know, it won't wear them out as much. Um, but it was very much something that, that, you know, was very, very unique, uh, some 12 years ago. So we wanted that to stand out. We wanted the customer experience overall, like the app, of course, but also customer service. We wanted that to feel very different. You know, we wanted people to feel that there was somebody on the other side, uh, that gave a damn, you know, that wanted to listen to them, that wanted to fix whatever issue was going on, you know, to answer whatever questions that they had. So we put a lot of thought into that as well. Um, anyway, we looked for different angles to differentiate against everything else that was out there, and it worked.

Speaker A: And then you launched the card, I think, on April 1, 2014. And you've done a lot of what you wanted on the product side of things in terms of a new experience, a new brand, fully digital, online onboarding, I believe, even from day one, which was unheard of, versus going to the new branch and, um, spending a lot of time, a lot of paperwork. But if I'm not mistaken, your first set of customers that you thought would want this card actually weren't interested. So maybe talk about that first set of users that turned out not to work out.

Speaker B: Yeah, so it was more of a hypothesis. So we just assumed, uh, that being a new brand, um, uh, a new product, uh, that was very unique, uh, that that would appeal to A younger audience. So we had this hypothesis that maybe kids in college, uh, would be more drawn to this. Uh, and it was not like they, they, you know, they rejected it. Surely they were like, okay, we might as well try. But we saw a much bigger pool actually coming initially from the, just the early adopters of technology. Right. Which is like, you know, in hindsight really makes sense because that's often the audience of early adopters of every single new technology. So those were the people that were actually more interested, that wanted to hear more about it, that wanted to give it a try, they wanted to write reviews, they wanted to tell their friends about it. So we kind of started, uh, really finding traction within the technology community, you know, with, with people that want to think about like the, the first people that buy the new iPhones. Right. Or people that are always kind of looking into the next gadgets.

Speaker A: Right.

Speaker B: Like, um, so, so that was where it really got traction early on. And from that it just spread out like virally. Because again, those people that, you know, the, the early adopters, one of the things that they pride themselves for is like educating their friends, their family, their audiences sometimes about the new and cool things are coming out. So that was actually something very interesting, like a very interesting route, uh, for us to go through.

Speaker A: Yeah. And so the initial hypothesis, the pull from university students, not there, but then I think one of these early tech adopters wrote a blog post that really started to drive a lot of growth for you guys. Um, and from there you went from no users to having to implement a wait list because you couldn't onboard enough of them.

Speaker B: Yeah, so of course we started with a lot of manual processes. Right. Because we couldn't build everything like at once, let alone like, even before we launched, like we were, as any startup was like we were just rushing to put something out there and see if the dogs would eat the dog food. So, uh, we definitely couldn't handle the amount of demand that we started to see. So very quickly we had to just set up a very simple wait list for people to just let us know that they're interested in the product and we would just like release them as we had capacity. And that just became, um, another layer of virality. Because when there was that sense of scarcity and since there were a lot of people talking like raving about the products, talking about the product, people wanted to try and then they couldn't get it, they had to wait for it. So that just reinforced, uh, this virtuous cycle of demand, which was very interesting.

Speaker A: And so the first two years you had just tremendous organic growth. But then you had 2016, some regulatory changes that almost killed the company. And then those were resolved in probably the most bizarre way I've ever heard regulatory uh, change get addressed. So maybe talk about what happened with some of the regulators in 2016.

Speaker B: Yeah, sure. So, uh, we continue to see traction like throughout those years but eventually we got um, blindsided by this news that came out that the federal government was actually considering uh, kind of like pushing through, through an executive order actually that would be effective immediately on this big regulatory change that wasn't even their jurisdiction. They should have come like from the Brazilian Central bank. Um, uh, but they were like, I guess desperate, you know, like as, as governments often find themselves, um, and they were seeking you know, new measures like to try to stimulate the economy. You know, somebody thought this was going to be a good idea, which obviously wasn't. Um, and this would have meant that we would need an insane amount of funding in capital like overnight. And of course like that would be ah, a moment. Had that happened, you know, it would have been uh, probably one of those moments that we have to like find, find a way to either sell the company or like, you know, raise one of those like crazy rounds. But it would have been a lot of like, it wasn't the order of like billions. So it was, it was something very, very, very dire the situation.

Speaker A: And specifically what happens with credit cards is you actually had a certain amount of time to pay the end merchant after the consumer paid you. And the government was like, no, you have to pay them instantly. So you went, you had this huge capital crunch, like oh my God, like we don't have a balance sheet. We're not a bank, we don't have a business. If we change the funding mechanics here,

Speaker B: that would hurt everyone of course, like in the industry, but it would hurt us much more because we didn't have deposits. Right. Like we had no way to fund this. It wasn't that this was just going to be expensive, it was just infeasible, you know, so it was not like the situation that the economics would be severely hurt. Sure they would. But even before that it was, it was very much a life threatening, you know.

Speaker A: And so what did you guys do and how did you engage with the regulators?

Speaker B: And yeah, so the first thing was um, to get on a plane and fly to Brasilia where you know, the Central bank of Brazil is, and, and have a conversation with them. And it was funny because like one of the directors that we were um, uh, Talking to. They actually found out about this through us because we picked it up first and we picked up the phone. We're like, we're, we gotta talk about this. We're going, you know, we're getting on a plane, we're gonna. They're like, what are you, what are you talking about? So, because this came from the federal government, so they were also blindsided by this. So by the time we got to Brazilia, we're having these conversations and we're trying to problem solve together and try to understand like, where this was coming from. What was the rationale behind what could we do? And we started uh, you know, to, to collect, to work together, right, like uh, uh, to address the issue and, and try to understand like what type of data could we take to the federal government? How can we, could we clarify the processes? Because again, this was even coming from a different jurisdiction where it wasn't supposed to be. So anyway, we started problem solving. Of course, like the press was picking up on this eventually. We were also working the press, trying to educate them on the, on the impact that this could have on our uh, on our operation. And then eventually, like it was all over the news that no bank could go bust like if this were to happen. And that's when we saw like this magical moment because we already had a few million customers by then and customers came in our defense, which was beautiful. You know, it was something beautiful to see, you know, customers reaching out to the federal government, to the Brazilian central bank saying no, you guys cannot possibly let this happen. You know, this is the first time that we have a company, um, that actually cares about customers, that is actually providing a good service, that is doing something good. Uh, this cannot happen. So, um, the Internet was flooded with messages from customers, uh, really standing, um, uh, up for us and really advocating for us, which was something very, very nice to see. So we were able to, in a few days, I believe it was in the course of maybe five or six days that we got very little sleep, um, that we managed to get to the right people with the facts and of course, like the popular support, uh, uh, to show them that this was actually a bad direction to take regulation. So they eventually backtracked and went in a different direction. So it was a mix of luck, of course, but also of a lot of hard work for us to be able to educate the right people.

Speaker A: Yeah, you had spent a lot of time cultivating customer love and then that came to support you with the regulators when you, when you needed it. Um, also I'm curious to what extent that experience um, informed your decision to launch your next product, which in 2017, so about a year after this regulatory crisis, um, which was your new Oconta, I think is the product.

Speaker B: Yeah, Nukanta. Yeah, it's our account product. So um, that was of course like a moment that uh, we could stare in the face the reality that we needed to own our own destiny and be able to uh, to, to be self funded and, and to build the deposit side of the balance sheet. Uh, so we, we had already started working, but of course like that, um, I increased the intensity in the, and the sense of urgency across the company for us to, to get a product out of, out of the door. Uh, the thing is like we, I've mentioned this, we, we like to earn our right to do the next thing. So we only did credit cards like for a few years because we wanted to do. To this day, like we want to do fewer things, but do them really well. You know, there are companies out there, they'll throw a lot of spaghetti on the wall, see what sticks, you know, and they'll deal with the stuff that doesn't work out and they'll deprecate things. We'll do that too, but in a much smaller scale. Like we like to be more thoughtful about how we go into the next thing because we stand for a few things, right? Like we stand for this great customer experience. We want to build products that people love so we have a very high bar for the things that we do. So that also came into play. Uh, but, but I guess, you know, eventually we got to launch the account product and to be able to uh, to collect deposits and we've been very much self funded since, since those days. And we're uh, I mean for, for all that matters, we're overfunded, especially Mexico and Colombia where we're still growing our credit base. Uh, we're very much overfunded because we already have the deposit products. And um, I guess people trust us a lot because when you build the Love brand and there are many uh, uh, rankings out there that shows that not only were one of the most valuable brands in Latin America today, but uh, also the most loved brands across the markets that we play because um, those things build up, you know, how people interact with the product, how much they love the product, uh, the good job that we do with experience, with customer support, like, you know, that just builds a lot of trust. So people are very ready to give us or their deposits once we launch our deposit product and that's often an uphill battle for a lot of companies starting because they don't, they don't have a brand, they don't have trust and they're asking people to, to trust them with their money. And since we started with credit we had already built a lot of trust when we got the deposit product out there. So that was also a very successful launch.

Speaker A: Yeah, it's interesting because the exact opposite how of a lot of fintech companies in the US have started, they start with the deposits and then they really struggled to launch cards ever. Um but you started with the card and then three years later launched the accounts product which was also very successful. Um, I'd like to talk.

Speaker B: It's very hard to do credit. That's the thing. You know people start, often start like with the easiest thing which is you know putting, putting the account there out there in the debit card. You don't have to do credit underwriting, you don't have to fund the credit side. Um but then you know it's, it's harder to do everything else. So we started with the hardest thing and then everything else was, was a little less hard I guess.

Speaker A: Yeah. And be great to talk through how you started to shift the market in terms of consumers experience of the financial system because I think for a lot of these people they were not getting credit cards or they were not necessarily having formal um, accounts and then certainly and we can talk about this with your new insurance product just for how many of them this is the first time they've ever had an insurance product.

Speaker B: Yeah. So for many of our products that has been um, the case. Uh one stat that I'm especially proud of is like we have a savings feature ah within our account that we call cashinhas. It's like the literal transition translations money boxes is as if like there were little pockets I guess that people like you know, put aside their savings. Um and those aren't like higher yield. Um 80% of people that save with us like through that feature have never saved any money in their lives and we're talking about like tens of millions of customers. So. So that can be very powerful. Is the same thing for insurance. You know for a lot of like for over 80% of our customers that was their first, first ever like insurance products. Those are very accessible. Uh on the credit side we are now the largest uh financial institution in Brazil granting credit in terms of number of customers with access to credit. So we're read given I was mentioning the low cost structure that we have that just allows us to get to a certain segment of the population that a lot of other institutions just can't access because it doesn't add up for them. You know, like they don't have the type of cost structure to be able to get there because it doesn't, uh, they, they can't afford to service them with the cost of structure that they have. So that just allowed us to really expand the market way beyond what existed. And um, when you look into some of, excuse me, into some of those stats, is easy to think that nubank is like a, uh, an inclusion play, uh, is a bank for the underbanked or for the unbanked is not really the case. When you look into credit cards, for instance, which is our oldest product in Brazil, in our oldest market, uh, over 80% of our customers had already had a credit card before. Uh, only 20% of them were actually new to credit cards. Um, but a lot of them chose to bank exclusively with us. So that's the other thing that makes us really proud is, um, not only were we able to include, sure, like a relevant piece of the population into financial services and to give them access to products, uh, that they haven't had before. Uh, but even for a lot of people that already have access, they're choosing us more and more as their primary banking relationship. So today, out of our customers In Brazil, over 60% of them, 6,0 will say that Nubank is their primary banking relationship. We're the number one financial institution in Brazil today in terms of primary banking relationships. So that's something that is really powerful because it's not like we're getting there as a secondary credit card or as a secondary account that they use. No, it's really their primary relationship.

Speaker A: Yeah. And as an investor, one of the most impressive things for me to observe about nubank has been not just the fact that people love your products, but you keep the cost of service very, very low. And the amount of revenue you earn as you launch new products has gotten up for the most mature cohorts to $300 per user in Brazil, which I mentioned before, is a fifth the GDP per capita of the US like, that's pretty remarkable given that a chime is in the, like, you know, two hundreds. Robinhood's in the mid one hundreds. So it's pretty impressive what you have done there. Launching new products is one really big part of growing the business. Another big part is launching new markets. So 2019, you launched Mexico. Why did you decide to do that? And why did you decide to do it in 2019 versus earlier or later.

Speaker B: We have been thinking about going international for a while. Like we've always had international ambitions. Like we, we've always been a fairly international team. You know like the Official language inside NoBank is English. Uh, we have people working in Nubank like from all over the world. So we, we knew like when we, when we first started the company we knew that this was a global thesis. But we again we wanted to earn our right to do, to go international. So we wanted to be in a place in which Brazil was very close, if not like already past breaking even. We wanted uh, to have like a very solid beachhead. We wanted to make sure that the credit side was very well taken care of, you know, that we weren't gonna get any surprises in the next credit cycle. So we wanted, wanted to cross our T's dot our I's before we headed, you know, to, to the next country. Uh, but we've had our eyes in Mexico for a while and Mexico was a very interesting opportunity because of course it's the second largest economy in the, in Latin America. But not just that. When you look into credit cards specifically, um, it's, it's under penetrated. So there was a big opportunity for us to grow the pine, just grow the market, grow access I think sub

Speaker A: 10% when you entered about like that.

Speaker B: Uh, about 10%. Yeah. So in Mexico, unlike Brazil. So in Brazil when we started, 80% of customers already had credit cards. In Mexico that number was close to 15. So about half of our customers had never had a credit card in Mexico before. So uh, it was a much bigger uh, portion uh, of the business about like growing the market in opposition, just like stealing market share which we have um, but you know, in a different proportion. And the economics of credit cards in Mexico are also much more interesting because we're in Brazil. Credit uh, cards are mostly like a payment ah, method. You know, people don't really actively use the credit feature like they'll revolve but as a last resort type of situation they don't actively finance through credit cards. In Mexico it's the opposite. It's much closer to the U.S. you know, people actually use that as a means of financing. So you have a lot of like a lot more um, interesting bearing balances uh, on the credit card side. So that makes the economics much more interesting. So we wanted to come when we felt. I won't say ready. You're never really ready. If you wait until you're 100% ready, you're probably late. But we wanted to feel A little bit more prepared to do that. And that's what we did in 2019. We wanted to prove that the model wasn't contained to Brazil. It wasn't constrained to just one country, that we could export this internationally. Ah. So we did that, and then, you know, we did Colombia as well. Uh, and we've been growing those businesses. And when you look, you've probably seen this as an investor, we have charts that will show that will control for the size of population and the, you know, the timing of the launch. But when you look at the metrics for both Mexico and Colombia, Mexico is ahead of Brazil and Colombia is ahead of Mexico for a lot of those metrics, if not all of them.

Speaker A: So that's super interesting and important that your newer markets are growing faster than

Speaker B: your original market, which is remarkable because we grew pretty fast in Brazil. Right. So it's very interesting to see.

Speaker A: And so 2019 launch, Mexico, 2021, you take the company public. What was that experience like?

Speaker B: Well, it was a. It was a big milestone. It was one that we knew would come eventually. You know, uh, we're not interested in selling the company, so eventually we have to find an exit for the. For early investors. Right. So we knew it would come. Uh, it wasn't at all like a finish line for us. Like, you know, it was just like one of those days where, sure, like, it was an important day. We rang the bell. We were all there. Um, I was pregnant with my third child, uh, was eight months pregnant, ringing the nice bell. So it was, um, it was a very interesting moment. Um, but you know what? The next day we were back at work. We were, you know, back at work earning the. Earning, uh, or the trust of our investors that had just made a commitment to us, you know, or renewed their commitment in the case of some investors. And we. That. That's what we. We've been doing since then. You know, just. Just continue to be heads down, executing, doing the best that we can by our. By our customers and, you know, doing the. Doing the best that we can on the product side, too.

Speaker A: Yeah. And congrats on three girls. I think the second you signed the term sheet the day after delivery, and the third, you were basically going through the IPO process.

Speaker B: Well, uh, the first one was like signing series A and the month that we launched the company. The second one was when we launched Mexico. Uh, so that was Bella. Anna was born like a month after the IPO or six weeks after the ipo. And Leo was born as we were, um, heading to the US So my fourth child was also, um, aligned with a big project.

Speaker A: Amazing. And yeah, let's revisit that US Conversation. So now we have some context on building radical customer love in Brazil. Starting with the cards, moving to the accounts, launching Mexico in 2019, and then soon thereafter Colombia continuing to grow and deepening product talk. Again, I think a little bit more about what you would like to do in the US Based on that experience. Experience having built across three different markets now.

Speaker B: Yeah. So we, we really like listening to customers. Right. And the reality is, um, I'm a Brazilian. I've lived in the US some 20 years ago when I was in business school. Uh, I haven't been back, like, leaving here ever since. Um, but we do have a few hundred, like hundreds of thousands of customers that we know are here. A, uh, few million, depending on how, like, where you draw a line in terms of, like, people living here or not. And they keep asking us to, to come here. You know, they keep saying, guys, you know, it's so hard. Like, um, you know, people, people are still using checks, and for us to move money, we gotta wait like three days until the money shows up somewhere else. And it's kind of lost in space for three business days. We don't really know when payments are gonna, are gonna come, when they're gonna be settled. And there's so much complexity. And, you know, I'm, I'm being spread across like multiple different apps. And you know, customer support is so bad and there's so many fees. So we, we're sitting there and we're looking at this huge market and hearing about like, all this customer pain, and we're kind of scratching our heads and thinking, you know, we, we know how to solve those problems. We, we, we've done that before. We've dealt with that before. And you know, um, sure, regulation is extremely complex. And you have like 50 states, and each one of them has an opinion about interest rates and collections and a bunch of different things that I'm learning about. Um, but you know what? Um, there are very few companies out there. They have the track record that we do, you know, that operate multiple regulated licenses across multiple jurisdictions. They have very good relationship with all these regulators. They have a formal governor of a central bank of a very big central bank and respectable central bank sitting in their board. And as an executive working at the company, uh, which we've. You probably heard this, right? Like, we have Roberto Campos joining us as an executive. Uh, he's going to be actually one of the board members of the U. S. Bank that we're setting up. So, uh, companies are publicly listed. They're probably. They have been profitable for a few years, are printing a few billion dollars every year in terms of net income. So it's not every day that one of those companies shows up at the OCC asking for a federal charter. So we're cautiously optimistic about, um, how we've been greeted by the US Regulators about our ability to solve some of these pain points that, who knows, could resonate with a much wider audience. You know, sitting here as a consumer, I gotta tell you, like, it's been comical to navigate.

Speaker A: It's pretty bad. Yeah.

Speaker B: You know, Yeah, I came here and I'm like, trying to get a credit card, and it takes, like, two months for the bank to be comfortable with my risk. On the credit card side.

Speaker A: Did you get, like, a $5,000 credit limit too?

Speaker B: Uh, it's something like that. And then, then when they finally do, they're like, okay, we got you approved, but now we're struggling because you don't have proof of residency yet. And I'm like, you guys have my mortgage. You realize that, right? And then they're like, yeah, but that's what the mortgage group, the credit card group doesn't have access to that.

Speaker A: I'm like, it's remarkable how unintegrated these lines of business are because they're all built over 30 years of acquisitions.

Speaker B: Yeah. And I'm like, okay, God, keep you this way. You know, like, don't change anything. Just, you know, hang in there.

Speaker A: If you're a banker and listening, you probably should change because otherwise new bank is going to come and take your customers, um, and talk about how you think about building the team. Are you going to build a team here? Are you going to have still the global distributed team? Because you do have to localize in various ways. It's certainly the regulatory way, but then, you know, the product experience. And then also like the team who has to listen to and understand the product.

Speaker B: Oh, for sure. So we're already building that team. So you should know we already have about 150 employees in the U.S. um, that are a mix of a few acquisitions that we've made over the years. Equi hires mostly. We recently hired an A.I. uh, company out of Silicon Valley called Hyperplane. And they've, uh, joined our team to really strengthen our AI capabilities. They're now the. The new a. The new AI core team. Uh, we've also hired, um, Equi. Hired, uh, another company that came with a lot of IP on Uh, parts of our tech stack. Uh, they own um, uh, Datomic, which is our uh, database that we use. They, they're all. They're also the company behind uh, Clojure, which is our primary uh, programming language that we use. So anyway, like we have some employees that came from that. We also have a lot of talent that we were able to hire to attract and retain over the years executives from um, the big tech company. So we recently just hired a new cto uh coming out of um, I um, think it was now coming out of Snapchat but he was before with Amazon. Ethan was also our new chief Design officer. He was previously with Uber and Slack and a bunch of other interesting design companies uh, in Silicon Valley. So we do have a lot of talent here that we're going to be deploying, uh, that we already are deploying across you know, our operations. We're also going to be specifically deploying uh, into the U S Bank. Uh, we also have a lot of former Capital One executives that uh, have joined New bank over the years. We have a decent amount of uh, uh, employees around the D.C. area, uh, where we're going to continue to build our presence. Uh, I've relocated personally, you know, husband and four kids in tow, uh, to Miami where we're likely going to have a big hub, um, that um, is going to be the focus of our U.S. operation. Uh, that's where we're likely going to have um, the biggest part of our product and marketing team, uh, here and also operations.

Speaker A: Yeah, for anyone who doesn't think you're going to take the US seriously, I mean you moved your whole family here are applying for an OCC charter and you know, have a few hundred folks or soon to be a few hundred folks. So it'll be super interesting to watch. Um, yeah, a future conversation. I'd love to get in the strategy of the US market but I know between you know, you getting launched, wanting to keep some of that under wraps as well as um, getting the charter application running, we don't need to go.

Speaker B: Let's talk again.

Speaker A: Yeah, we'll talk again in the future and I look forward to that conversation. I did want to dive out and um, just have some general questions for you about things that are floating around in the ether and the fintech community. So the first would be, especially since you have global operations, how do you feel about stablecoins? Are they real? Are they hype? Where have they been useful to Nubank to the extent they have been?

Speaker B: Oh, they're very much real. Um, so we are now in Brazil where we have a digital assets business. We're the number two player in Brazil, you know, only behind Binance in Brazil today. Ah. In terms of number of customers with um, um, whom we're serving, uh, on the digital asset side. Um, and what we really see is a lot of demand just for that asset class, you know. And when you look into that behind Bitcoin, actually stable coins are the next thing you know that people are interested in. So one out of four customers that will come into digital assets, they'll come in directly into stablecoins. So it's very much a thing. As you know, there's a lot of interest especially in the U.S. uh, in our federal charter we have listed digital assets as something that we're interested in servicing our customers with like here in the US So we do see a lot of opportunity there for sure. We are going to continue to serve uh, uh, uh, an increasingly more international customer base. So even the use cases for remittances Right. Like for international payments are very much interesting to us. So it's an area that uh, we're leaning heavily into.

Speaker A: Yeah. I'm curious what you think your customers care about the most today versus what they might in the future. For example, if they're buying Bitcoin today, it's probably mostly about price increases versus if they're holding usdc. Maybe it's the stability of the US dollar, maybe it's remittances or maybe it's just the ability to earn yields. Where is it today that you think people are getting use out of stablecoins and co crypto versus where it might be in three to four years?

Speaker B: Yeah. So the type of demand that we're servicing, like we have made a very clear, deliberate choice of not designing, not uh, optimizing for like traders and people like you know, very much into the speculation around digital assets. Like we, most of our customers are buy and hold. You know, like they're looking into either like storing value or like looking into you know, the feature appreciation. Sure. Like of those types of assets or stability to your point. Uh, so we, we have a fairly limited even like shelf of digital assets. Like we are not offering every single meme coin out there like to our customers. We, we, we and that's been a very like clear choice of ours. Um, it's hard to know what people like, you know, what people are going to want in the future. We try to focus on the things that we know they're going to want. You know, we know that they're going to want lower fees. We know they're going to want quicker, you um, know, service. We know that they're going to want like faster payments. We know that they're going to want like stable infrastructure. Those are the things that we focus on. So we're going to continue to be of course like very closely monitoring like interests across um, different assets and you know, trying to understand like the different applications and you know, be able to, to service customers in new ways in the future. Um, but we try not to guess too much around. We try to focus on the things that won't change, you see.

Speaker A: And next question. How is AI changing how nubank operates both internally but also operates in terms of the products and experiences they offer to their customers?

Speaker B: That's a great question. So, uh, that's something else that we're leaning very heavily into. Uh, as I mentioned, we've made some acquisitions around this but we, we've been at the forefront of this for a while now. You know, it's, it's one of those things that while a lot of companies are kind of scared and trying to figure out like what is it that they're going to do about it and how, like I said this the other day, like, I feel that we've been preparing for this our whole lives because not only have we been using machine learning like since 10 years ago, um, but we, we've built the company on top of like a very tough data infrastructure to be able to leverage all the data that we've been collecting, you know, over the past 12 years in the best possible way. So there are a lot of companies out there that you know, claim they have a lot of data, but it's not clean. Data is not properly stored. It's not like, you know, connected in the best possible way. So that will make them, that will make it really hard for them to make that actionable data, you see. So for us, like that has been a very, I won't say easy. Nothing is ever easy, but it's been a fairly seamless like you know, uh, transition into using like the, the most modern like AI applications. We are leaning very heavily, uh, mostly into um, um, right now, up until now, like more transparent ways, uh, that customers won't necessarily see. So we've been deploying like very sophisticated models into like credit underwriting or like you know, uh, routing of customer uh, support tickets or uh, efficiencies on autopilots or co pilots for agents or even you know, software engineers. Of course, like, we have a very high adoption on the technology side, not just software engineers, but also PMs and even designers are more and more increasingly so using AI tools, right? Like to speed up product development, to speed up prototyping, to speed up, speed up, uh, uh, testing, to speed up QA for software development. So there's a lot happening across the company in multiple dimensions, and there are a few things that customers are starting to see. So we're now using, uh, some models, uh, for customers to even to be able to take action on behalf of customers, whether those are, like, instant payments, using voice, uh, or through customer support. So, you know, uh, we're being very thoughtful, but we're leaning very heavily, uh, into AI.

Speaker A: And next, I wanted to ask you for advice for founders. These are a couple things I've heard you say before. Uh, the first is, do your homework. So what does that mean to you, and how has that manifested at nubank?

Speaker B: Well, the first thing is, like, um, I think there's. We see more and more people coming into, like, this entrepreneurship journey. I mean, I'm not in a position to judge, but what I would say is, like, not. Not the most thoughtful reasons. You know, uh, this is a. This is very hard. It's not for the faint of heart. You know, uh, you got to be willing to. To put a lot aside to dedicate your life to solving a problem that. That you got to care a lot about. Um, and sometimes people won't do that type of homework. Like, they won't know enough about the industry, they won't know enough about the problem, they won't know enough about the customer paying. So that's the very least that you should do, you know, or regulation in the cases in which that's applicable. So, uh, I think just. There's a lot of room for people that want to do this, but they got to be willing to do the basics really well, and a lot of people don't. So I guess that's the first thing that they should know.

Speaker A: And then second, uh, there's no perfect time.

Speaker B: Oh, yeah, there's never perfect. There's horrible time. Same thing for families like that. That's also a line that I use a lot. Like when they ask me, oh, you know, what's the best time for me to build a family? I'm like, listen, there's no, uh, there's.

Speaker A: I use it the exact same way all the time. It's like, there's no good time, which means, might as well do it now.

Speaker B: If that's a priority for you, you should just go ahead and do it, you know, unless, like. Sure. If you're, like, very sick and ill or if your marriage is falling apart, or if you're like, you know, you're. You're completely bankrupt and you have nowhere to live. Sure. Like, you know, don't start a family, but other than that, you know, like, there's no perfect timing. So there's always something going on. If you wait for the perfect moment, you're going to wait your whole life.

Speaker A: Yeah. And then outside of family, for. For new bank. What. How is that manifested?

Speaker B: You mean inside the company? I mean, I'll give you the Mexico example. Like, you know, there were reasons why we shouldn't have gone to Mexico. Right. Like when we did. And there were many reasons why we. We didn't go before until, you know, there were more, More reasons to go than to not to go. Right. Like, but that's the thing. Like, there's no. Or the US Now. Right. Like, one could argue. Oh. Uh, but there's so much going on. There's so much opportunity still. Even in Brazil. Yes, yes. There'll always be, you know, um, but sometimes you got to make a judgment call about, you know, what direction you want to go. And if you wait for the perfect moment, it just never, never materializes.

Speaker A: Yeah. And then I think the last one to touch on is choose, uh, your environment carefully because negativity is contagious. I think that's super interesting question maybe about culture building inside of a company as well.

Speaker B: Yeah. So, um, I've been around people that, uh, weren't such great, you know, a great environment. And the reality is like, we. We are a product of our environment more than we want to admit. You know, people want to think that they have, like, strong personalities, that they're like their own thing, you know, but the reality is, like, we absorb people around us. You know, um, that thing about us becoming the, you know, the average of the five people that were like, you know, that we spend the most time with, like, it's very true. So we gotta be very careful about the people, with the people that we let in. It's much easier for you to, um, um, to let in people that are already aligned, like, with the type of values that you have with the type of company that you want to build, uh, you know, with the type of environment that you want to build versus bringing somebody that's very strong, that's very, like, you know, very competent, and then try to force them into the type of behaviors that you expect. That is like, that is much harder. I would not advise trying to do that. I. It's very rare that that will work.

Speaker A: Yeah. You know, I think especially with the brand new bank has built, you just can't have negativity as a part of the company culture to have that kind of brand.

Speaker B: Yes, yes. Like, it's that type of victim mindset, you know? Like, it's. If you were to. If you were to give in to them, like, we wouldn't have even started a company when everyone else said it was impossible, it could not be done. You know, if you have that type of people around, like, there you go, you're done. Yeah, it can be done. Let's all go home, get another job.

Speaker A: This has been a super great conversation. Um, also, welcome to Miami and very excited to see what your product looks like when it launches.

Speaker B: Oh, I want you to be a customer.

Speaker A: I'll be a customer. I'll sign up. I sign up for everything. And then we'll see about if you can retain me, which we'll see.

Speaker B: Yeah. Um, yeah, that's the challenge.

Speaker A: Yeah. And we'll have to revisit this conversation, I think, uh, once you do have the product up and live. But best of luck in the meantime.

Speaker B: Thank you so much. Thanks for having me. Um, and a pleasure to talk to you. And, yeah, let's talk again once we have more to share.

Speaker A: All right, Sounds good. Thanks, Chris.

Speaker B: Thank you.