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- It's still Day 1 for Nubank
Hey!
Nubank is objectively one of the most successful Fintech companies out there. In Brazil, they have reached the scale of the incumbents and yet maintain the growth rates of a startup. Innovative, highly profitable, and deeply loved by its customers.
However, on the recent earnings call, David Velez, the company’s co-founder and CEO, said that it is still Day 1 for Nubank. He’s set ambitious goals for the company, so ambitious that, if achieved, Nubank’s accomplishments to date could seem like a footnote.
Nubank wants to become the largest financial institution in Latin America, expand beyond financial services, and…wait for it…become a global player. I believe it was the first time that they had explicitly told investors that they are working on expansion beyond Latin America.
Let’s dive in because this is super exciting!
Jevgenijs
p.s. if you have feedback, just reply to this email or ping me on X/Twitter
A lot has been written about the Brazilian Fintech miracle Nubank $NU ( ▲ 0.95% ) . It is a truly fascinating company that has already achieved a lot. So, before we dive into why it is still Day 1 for Nubank, let's quickly recap how far they've come.
Nubank launched in 2014 with a fee-free credit card, a mobile-first experience, and an ambition to create a bank that consumers love. At the end of 2024, 40 million people used Nubank’s credit cards. In Brazil alone.
“In 2013, we began with a small team and in 2014 we introduced our first product in Brazil, the Nu Credit Card, a purple Mastercard-branded credit card. Our new credit card marked Brazil’s first foray into annual fee-free credit cards, and was coupled with a digital, mobile-first customer experience.”
Three years into the journey, in 2017, Nubank launched a fee-free checking account, NuAccount, aiming to become the primary bank for its customers. At the end of 2024, 79 million people in Brazil were using NuAccount. Nubank has also managed to become the primary bank for 61% of its active customers.
“In 2017 we introduced NuAccount. This fully digital banking solution revolutionized the market with free deposits, transfers, and payments, alongside nominal-fee cash withdrawals at partner ATMs. Additionally, we incorporated a competitive-yield savings feature. This expansion enabled us to become the primary banking choice for many customers.”
Nubank launched unsecured consumer lending in 2019 and expanded into secured consumer lending in 2023. Secured consumer lending in Brazil means loans backed by salary, pension, or unemployment benefits.
In 2024, interest income from credit cards and consumer loans, as well as NuAccount balances (which Nubank invests primarily into government treasuries), contributed $9.6 billion, or 84% of the company’s total gross revenue.
“In 2019, we launched a personal loan feature within our mobile app, allowing customers to apply, run repayment simulations, and manage balances easily. In 2023, we announced the expansion of our lending products in Brazil into secured lines, such as public payroll loans for federal public servants; secured loans for retired persons, and [ loans backed by ] the Brazilian Severance Pay Fund.”
Fast forward to today (or rather 2024)…Nubank serves 102 million people in Brazil (which represents 58% of the country’s adult population) and has become the third-largest financial institution in terms of the number of customers it serves.
“We now serve over 114 million customers with 20.4 million net addition this year alone. Our active customer base grew 22% year-over-year to nearly 95 million. In Brazil, we continued adding over 1 million customers per month, serving 58% of the population.”
Financial success followed, with revenue reaching $11.5 billion and net income reaching $1.97 billion in 2024. The company’s mobile-first approach translated into unprecedented efficiency levels, delivering 28% ROE.
Nubank has also become the most valuable bank in Latin America by market cap (Itau retook the leadership in March, but I do not expect this to last for long).
Nubank started by focusing on the underserved, less affluent, customers and has successfully become the primary bank for many of them. However, they are now quickly expanding into the affluent segment with their Ultravioleta offering.
Being a primary bank and successfully competing in the affluent segment is something that very few neobanks in other regions have succeeded with.
Image source: Nubank
In short, Nubank is probably what every Fintech company (at least a neobank) wanted to be. Nubank is now big enough to compete with incumbents, it’s highly profitable, and it’s still growing fast. So why is it Day 1, you might ask.
