‘It is impossible for a company to please everyone’, says David Vélez, from Nubank

Six months ago, the Nubank won the world spotlight for being the digital bank most valuable in the world, outperforming decades-old rivals such as Itau and Bradesco. But now the neobank is under pressure. Amid a sharp drop in technology stocks around the world, it has already lost half its value.

Fintech co-founder and CEO, David Velez, recognizes that the company committed excesses and that some projects may not make sense in the new market reality. However, he stated that the company will maintain its strategy because, in a moment of crisis, “the worst thing is to try to listen to everyone”.

Read the main excerpts from the interview below:

How is dealing with the fall in shares after the bank was celebrated at the time of the IPO?

We were praised for 15 minutes and blasted for 9 years. Detonating is not new. There is a feeling that we were born in the IPO (initial stock offering). In fact, ever since we started in 2013, we’ve struggled with a status quo that’s been skeptical of what we’ve been doing. We’ve heard this since the company’s first moment, since I tried to raise capital in Brazil. It was: ‘Forget it, impossible to compete against the big banks‘.

But you had a series of contributions of funds that believed in you and now, financially, things have turned around.

We’ve always had a layer of investors who believe in us a lot and a layer that has been very skeptical. There are many investors who have been with us for 9 years and say they will be in the next 10 to 20 years. They are taking advantage of this moment to buy more.

Are foreign funds gaining participation right now?

Yes, some are taking advantage of this moment to buy more, others are just as skeptical.

What is the priority of using the IPO money? Is there a chance of acquisitions?

Many M&A opportunities that ten months ago were insanely expensive are starting to return at a much more viable price. So, yes, there is a lot of turbulence and volatility which, again, is the only scenario we know as a company in Brazil. The day we have Brazil growing at 5% a year will be cool, but we only know Brazil in recession. We are used to it, and this forces us to continue to focus on the long term.

Several tech companies are laying off. And Nubank?

We’re not laying off, we’re reinvesting in our employees, maintaining one of the best technology teams in the world, and we’re continuing to grow. There is an opportunity to be more efficient and, on the margins, there are excesses that even we commit. We’ve grown a lot in the last two years. We’ve hired 4,000 people, we have projects that probably don’t make much sense. The crisis gives us the opportunity to take a more critical view and increase efficiency.

What types of acquisitions does Nubank seek?

We have historically been more timid in acquisitions. We look for complementarity, like Easyinvest. We think the investment market is strategic and we had no knowledge in-house.

Nubank will not be the consolidator of fintechs?

Consolidate, no, but if there are fintechs that have complementary knowledge and markets, it makes a lot of sense to bring them in. If it’s someone who does exactly what we do, just to take out the competition, it doesn’t make sense.

Does the fall in shares change the bank’s strategy?

Do not change. The worst thing a company can do right now is start listening to everyone. All investors have a point of view. At that moment, companies lose their North. They start trying to please everyone. And that’s impossible.

How do you see the entry of international fintechs in Brazil?

You probably have opportunity for all of them. If ten years ago, five banks in Brazil owned 90% of the market, probably this 90% will reach 60%, 50%, 40%, in 10, 20 years. There will be a deconcentration of the financial system, which is great for the country. There’s a lot of room for all these fintechs to come in, get 1 million customers and still have room for everyone to win.

In terms of product offering, what is missing for Nubank?

It’s missing a lot. We basically have credit cards, personal loans, NuConta, which are the main products. There are investments, but a lot is lacking. In insurance, we have a product, which is life insurance, there is still a long way to go. There are a bunch of other financial and banking products that we don’t offer.

Does the bad global scenario affect the bank’s need for capital?

Our deposits continue to increase at an impressive rate, we have more than R$60 billion. Unlike most global fintechs, we have a financial license and raise with RDB basically the same as a CDB. We are super liquid, and liquidity continues to increase.

Did Nubank make the IPO at the right time?

If we hadn’t made the IPO in December, we would be having another conversation, we would be worried, trying to raise this capital in the private market.