The Friendly Assassin
Forbes India|May 07, 2021
David Vélez set out to kill off the fat fees and lousy service of Brazil’s big banks. The operation succeeded beyond his wildest dreams: Today, his no-fee Nubank is the most valuable digital bank in the world, with 35 million customers—and he’s gunning for more
JEFF KAUFLIN, MARIA ABREU & ANTOINE GARA

In the summer of 2012, David Vélez moved to São Paulo with a Stanford MBA and a plum job as a Sequoia Capital partner. Douglas Leone, the head of Sequoia, had recruited the then-30-year-old Colombian to stake the venture capital (VC) powerhouse’s claim in Brazil—a youthful, resource-rich country of 200 million that had grown 4 percent a year for a decade to become the world’s seventh-largest economy. But on October 1, Leone called Vélez with bad news: After considering the uninspired pitches from Brazilian entrepreneurs and hearing that top-ranked University of São Paulo had produced just 42 computer science graduates the prior year, he was pulling the plug. Sequoia’s Brazilian adventure was over.

“It was the day before my birthday and it was a bit of a shock,” Vélez admits. Still, he had always wanted to launch his own startup and saw an opportunity in the very dearth of Brazilian innovators that had turned his VC compatriots off. “You want to position yourself on the side of the market where there’s scarcity,” Vélez explains. “In the US, there’s an oversupply of good entrepreneurs. Somebody with my experience and background is a commodity. In Latin America, there was significant scarcity.”

Before long, he had a target: Brazil’s big and—to hear Brazilians tell it—bulletproof banks. Yet as Vélez saw it, the banks, with their high fees, poor service, and seeming obliviousness to new technology, were sitting ducks. And they were. Less than a decade after its founding, Vélez’s São Paulo-based Nubank has 35 million customers and is valued at $25 billion. Vélez, who is CEO, retains a 23 percent stake that Forbes values at $5.2 billion. “What’s happening in Brazil is nothing short of a real revolution. And it’s waking up the incumbent banks, who have had the going really easy for a long time,” says Nigel Morris, the co-founder of Capital One and a Nubank investor.

“David is going to build a $100 billion-plus financial powerhouse in Latin America,” predicts TCV partner Woody Marshall, another investor who has poured $1.2 billion into Nubank. Among the billionaire-backed firms betting on Vélez: Yuri Milner’s DST Global, Peter Thiel’s Founders Fund, Chase Coleman’s Tiger Global—and yes, Leone and Sequoia.

Equally impressive, Vélez built his fintech juggernaut while previously booming Brazil suffered through the recession, corruption scandals, and Covid-19. And he did so despite warnings from Brazilians that the banking establishment would block him—or worse. “‘They’re going to kill you,’ ” Vélez says one friend told him. “‘They’re going to kidnap your kids.’”

Growing up, Vélez saw how entrepreneurs persevere through adversity. Born in Colombia in 1981 into a family of small-businessfolk (his father’s 11 siblings are mostly entrepreneurs), he watched as his hometown of Medellín was ravaged by drug wars. He remembers leaving a shopping center with his family minutes before it was bombed. After an uncle was kidnapped and rescued, the then-9year-old Vélez, his parents and his two sisters (both now also entrepreneurs) moved to Costa Rica. There, Vélez’s dad, who had co-owned a small button factory with two brothers in Colombia, built a new one.

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