Fintech, Latin America, Startups

Latam Startup Series: Nubank

I have been captivated by the idea that businesses infused with technology at their core and espousing a culture of continuous learning can unleash Latin America’s productivity and true potential. The aim of my Latam Startup Series is to identify those companies in the region that are radically changing the competitive landscape of their respective industries by introducing fresh perspectives and new solutions to pressing problems. My ultimate hope is that by highlighting some of these innovative companies, we can break down the no se puede (“it can’t be done”) mindset so prevalent in Latin America – to me, the biggest roadblock to generating a cycle of positive change in the region.

Over the last three weeks, I went through the unfortunate experience of closing my bank accounts in Costa Rica (where I previously lived/worked for two years). Yes, you read that correctly – it took me three weeks to close my accounts. Bottlenecks included locked accounts (so I couldn’t pay off my credit card), filling out multiple forms (some could be handwritten, some needed to be typed), unanswered emails, dropped calls, more forms, more unanswered emails…you get the point.

This isn’t an isolated event: I had a similar experience with a different bank from another Latin American country last year. From a customer perspective, banks seriously suck in Latin America (including the multinational ones). They are incredibly bureaucratic built on top of legacy infrastructure that is slow and barely secure. Yet, despite their terrible services, they make tons of money.

That’s why I am excited about Nubank, a relatively new Brazilian financial services company. What’s unique about Nubank is that the company is completely digital – in other words, no physical bank branches. This translates into a significantly lower cost structure, thus allowing the company to provide customers with better services at much more competitive prices. Nubank currently offers a Platinum MasterCard credit card that customers can manage through an intuitive iPhone or Android app. With more than 200,000 people applying for the digital credit card, this Latam startup seems to be on a path to huge success.

brazil flag

Brazil, of course, has unique dynamics that make Nubank a compelling investment. First, Brazil is a huge market: the country boasts a population of 200M. Second, Internet penetration is abnormally high due to the +90M smartphones currently in use. Third, Brazil has really high interests rates: the benchmark (Selic) rate is about 14% compared to ~3% in Mexico and ~5% in Colombia. Lastly, despite a tepid macroeconomy, credit card transactions have been on a tear, growing over 13% from 2013 to 2014.

Add to this market opportunity a capable and visionary leader – founder and CEO David Velez – and it’s no wonder that Nubank represents Sequoia Capital‘s first venture investment in Latin America. In fact, Nubank raised a $30M Series B a few months ago to take on Brazil’s biggest banks.

While trying to find investment opportunities on behalf of Sequoia, David Velez decided to roll-up his sleeves and build the opportunities himself. A badass.
While trying to find investment opportunities on behalf of Sequoia, David Velez decided to roll-up his sleeves and build the opportunities himself. A badass.

Although replicating what Nubank is doing in other Latin American countries would be challenging due to different regulatory hurdles and market dynamics, I think Velez’s calculating approach – identifying and then tackling a broken industry by building a tech-savvy business – provides a powerful roadmap for other Latin American entrepreneurs.

marketplaces, Rails, Ruby

Building an Online Marketplace MVP

I’ve officially “graduated” from General Assembly‘s web development immersive. What an incredible journey it’s been – from learning the basics of a loop to building full-blown web applications.

For my final project I decided to work on a business idea my Dad and I have been thinking about for the better part of this year. The company is an online marketplace. I won’t go into more details at the moment since we are still in “stealth” mode, but over the next year at Columbia, I plan to dedicate a substantial amount of time building out the business.


Needless to say, I’m stoked that I’ve been able to build a “minimum viable product” (MVP) for the business – in other words, I have a prototype of the marketplace which I can use to validate whether it’s something potential users would consider paying for. I coded non-stop for about 2 weeks to get the application running. And while it’s a fairly basic platform, much of the core functionality is there. Education aside, I’ve spent less than $100 to get this up and running.

I built this application using a very “English-like” programming language called Ruby and a popular app-building framework called Rails. As a programming noob, Ruby on Rails is pretty remarkable since you’ll have the basics of an application up in a matter of minutes. This allowed me to focus more on the unique aspects of my application instead of the basic plumbing. Rails is fairly opinionated and stresses “convention over configuration”, but if you stick the to Rails Way of doing things, building an application becomes a lot less daunting.

Ruby on Rails makes building web apps much easier – and much more fun.

As I built the application, I faced three big challenges:

1) Database manipulation: I built the application using a relational database called PostgreSQL. Personally, I struggled to figure out how to link my users to listed items and any possible orders. This was further complicated by the two-sided nature of a marketplace. Users could be categorized as either “sellers” or “buyers”, and their orders broken down into “sales” or “purchases”. Conceptually, this is not difficult to grasp; correctly connecting the associations, however, was tough to get right.

2) Payments: These days, getting payment processing on your application is fairly straight-forward thanks to application programming interfaces (APIs) such as PayPal or Stripe. APIs sound fancy, but they are nothing more than instructions for applications to talk to each other. In my case, rather than build out a payment processing platform from scratch, I incorporated a couple lines of code from Stripe, and voila – I can now process transactions! Although incorporating APIs is much easier – and arguably more secure – than building something as complex as a payment platform, placing the code in the right place and grabbing the right objects resulted trickier than what I initially anticipated.

Stripe allows users of my platform to make purchases. Their sensitive information never touches my database.
Stripe allows users of my platform to make purchases. Customers’ sensitive information never touches my database.

3) Design: For this application, I incorporated a styling framework called Bootstrap. The framework injects some basic styling into the application, but what I particularly like about Bootstrap is that it takes a lot less work to get the app to be “mobile-responsive”. That said, re-formatting the entire application to make it look professional is very time-consuming and tedious. I wanted my application to look simple and professional, which is easier said than done when you don’t have a design background.

I love the fact that I’ve been able to build something (actually, several things) this summer. Skipping a summer internship and learning to code instead has been one of the best decisions I’ve ever made. Programming has pushed me to my intellectual limits and humbled me so much. Programming has also taught me to think about things from very different angles, and challenged me to leverage my teammates in unexpected ways. Most powerfully, programming has opened my mind and afforded me the confidence to tackle difficult problems by using software in productive and creative ways. As I get ready to go back to b-school, I look forward to present the marketplace to potential customers, further flesh out the MVP, and eventually build a real technology business in Latin America.