Digital Bank of the Year: Nubank

Digital Bank of the Year: Nubank

Although only six years old, Brazil’s Nubank has helped revolutionize banking in Latin America, taking a lead in the fintech challenge to traditional brick-and-mortar banks with 12 million customers for its credit card, consumer banking and lending business.

Co-founded by CEO David Vélez, a former partner at Sequoia Capital, Nubank continues to draw private equity investors. In a July financing round led by growth stage venture firm TCV, the bank raised $400 million to expand its business in Brazil and kickstart its international reach into Mexico and Argentina.

It was the first major investment in Latin America by the Menlo Park, California fund, which has also invested in Facebook and Netflix. The deal values Nubank at a reported $10 billion, the highest valuation of any tech start-up in the region.

Existing investors that also participated in the latest round include China’s Tencent, Sequoia Capital, DST Global, Dragoneer, Ribbit Capital and Thrive Capital. The company has raised $820 million in seven venture capital rounds since 2013.

Nubank started out with an app-based credit card and rewards program but has expanded its menu of products to include loans and digital bank accounts for individuals and small and medium size businesses. Measured by customers, it’s now Brazil’s sixth-biggest financial institution.

Nubank’s funding success reflects the growing influence of Latin America’s fintech ecosystem, which has made huge inroads in the banking industry by tapping into the region’s under-banked population.

A big target has been tech-savvy “digital natives” in the 25- to 34-year-old age bracket who don’t have any strong banking relationships.