Equity The tourist VCs in LatAm have gone home
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Mar 2, 2024 In this engaging discussion, David Vélez, co-founder and CEO of Nubank, shares insights from leading a $50 billion digital bank in Brazil. He reveals how Nubank's market cap surged over 40% in just eight months. The conversation dives into why some investors remain optimistic about Latin America, despite challenges, and highlights resilient startups that offer lessons for other regions. Vélez also discusses the transformative potential of AI in improving access to financial services, underscoring the role of technology in overcoming investment hurdles.
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Digital Banking Thesis Proven
- Nubank proved its thesis: digital banking offers better services and higher profitability.
- Their return on equity (ROE) is much higher than traditional banks, reaching 40% in Brazil.
Nubank's Scalability
- Nubank's model scales beyond Brazil's mass market, shown by growth in Mexico and Colombia.
- They expanded into savings accounts and obtained banking licenses, acquiring significant deposits.
VC "Tourism" in LatAm
- Global VC interest in LatAm fluctuates, with periods of exuberance followed by withdrawal.
- David Vélez calls these investors "tourists" and advises focusing on long-term value creation.