TIVP023: Nubank (NU): Banking on Latin America w/ Shawn O’Malley & Daniel Mahncke
The Intrinsic Value Podcast - The Investor’s Podcast Network
Disrupting the Banking Industry: The Rise of Nubank
This chapter explores Nubank's innovative rise in Brazil's banking sector through fee-free credit cards and digital onboarding. It also discusses the challenges faced from traditional banks and the importance of consumer backing in driving their expansion.
Shawn O’Malley and Daniel Mahncke break down Nubank (ticker: NU), a leading fintech company providing credit card, banking, and insurance services to millions across Latin America, with nearly 60% of Brazil’s adult population using one of the company’s products. Nubank’s success is a true David vs.Goliath story, overcoming a powerful banking oligopoly in Brazil to provide more accessible and lower-fee digital banking services to the masses, who had long been neglected by traditional banks.
In this episode, you’ll learn how Nubank grew to become one of Latin America’s largest companies with over 100 million users in just over a decade, how being a digital-first bank has given them huge operating cost advantages, why Nubank’s unit economics are so attractive, what key metrics to focus on when evaluating a banking business, and whether Nubank is attractively valued given its incredible growth prospects, plus so much more!
Prefer to watch? Click here to watch this episode on YouTube.
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
13:42 - Nubank’s inspiring David vs. Goliath origin story.
19:17 - How Nubank’s first credit card product spread like wildfire.
23:20 - Why the customer experience with Nubank is fundamentally different than with competitors.
25:00 - What makes David Velez such a special founder and CEO.
29:30 - How Nubank has used its low-cost moat to compound the advantages of its business structure and built customer loyalty by sharing those rewards with customers.
41:17 - Why Nubank’s growth story may only be just starting.
01:20:14 - Whether Shawn & Daniel add NU to The Intrinsic Value Portfolio.
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
- Sign Up for The Intrinsic Value Community.
- Nubank: Business Breakdowns Podcast.
- Is Nubank Disrupting Traditional Banking? Substack Article.
- Article on Nubank’s late payments jumping.
- Aswath Damodaran's resources on equity & country risk premiums.
- Nubank’s CEO on the Crucible Moments Podcast.
- Long-form investment thesis on NU.
- Check out our previous Intrinsic Value breakdowns: Nintendo, Airbnb, AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports.
- Check out the books mentioned in the podcast here.
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