Nubank

[upbeat music] Koen Jonker leads TymeGroup, a fintech unicorn valued at 1.5 billion US, that counts Brazil's Nubank amongst its backers, and is eyeing a New York listing by 2028.

He built it with his partner, Chad van der Walt.

Trained as a lawyer, Jonker was already CEO of South Africa's largest law firm when, in 2005, he walked away for Standard Bank.

A gente comentou aqui no-no-no Brasil, né, é, um setor altamente concentrado, profissional regulado como banco, né.

Quem imaginar que Nubank, que foi fundado em 2012, 2013, hoje já tenha cem milhões de clientes, né, que seja uma das três maiores empresas privadas do Brasil na-na bolsa, né, e-e que tenha um lucro que no varejo vai ser maior do que alguns bancos, é, estabelecidos já há muitos anos, né.

E cada setor, cada, em cada geografia tem o seu Nubank, né.

Então, eu diria que à luz disso, a gente tá vivendo um terremoto, né, é, de escala nove no mundo dos negócios, escala nove da escala Richter.

E qualquer empresa precisa se transformar.

Mesmo assim todo mundo chegava e perguntava: é pra colocar a ficha aqui?" [risos] É sempre assim.

Ah, alguém-- a Carole falou de Nubank.

Cara, outra coisa que me irrita muito, cara.

Propaganda e notificação de banco.

Can you give me some examples of the founders that you partnered with that you feel you had the best partnership with that responded to this, that you helped mold and shape and build their business with them?

with David Velez of Nubank.

And the reason I choose him for this example is that he was an associate at Sequoia, so I knew him well.

I hired him out of Stanford Business School.

But what I think, what I've heard they got really right was unlike Western Union, these guys built partnerships with local fintechs and financial institutions to provide this service.

So I think they partnered with Nubank and they approached Nubank and said, hey, look, we'll facilitate this.

And Nubank likes it.

It's just deposit growth.

But to your point, You would rather own the institution that eventually, I mean, obviously it's a functional price, but you would rather eventually own the company that gets the deposit, in this case, Nubank.

So the question always with all the remittance businesses, and this is why, so Remitly will do, call it two to two and a half billion of top line this year, and it's a five to $6 billion company, right? So you can kind of see the types of multiples it trades at, right? The public markets have generally not given very good valuations on a relative basis to some other kind of transaction-based like fintechs to remittance companies because the customers are a lot less loyal generally.

They do a lot more shopping around in terms of just what does the price of this FX pair look like, especially if it doesn't have like a...

So basically these are the rates that merchants pay.

to the card issuers, to Nubank or Banamex, whoever it might be is issuing the card and it's important revenue for the card issuers.

So the current average on credit cards is about 1.35% and it's going to, through a four-year transition period, go down to 1%, and debit cards, I think the current average is around about 0.45%, it's going to come down to 0.3%.

I think there's a lot of debate about what impact all of this will have on digitalization on the one hand, If you're making less money from issuing cards, because people are paying you less commission when they use your cards, maybe there's less incentive to issue cards, so you're making less money from them.

at Revolut.

If you look at Nubank, for example, they have expanded across multiple parts of the financial life cycle.

So that's topic number one.

The second thing that I see as a pattern is that competition now is, I would say, you get an edge when you're sitting inside the transaction flows.

Can you give me some examples of the founders that you partnered with that you feel you had the best partnership with, that responded to this, that you helped mold and shape and build their business with them?

With David Velez of Nubank, and the reason I choose him for this example is that he was an associate at Sequoia, so I knew him well.

I hired him out of Stanford Business School, and I had to give him the bad news that we were not gonna open a Brazil office.

After he moved to Brazil, he, he committed to Sequoia, moved to Brazil.

But there's such a big discrepancy between about the distribution of the wealth and also the economic benefits for young people.

So that's why digital neobanks such as NewBank in New Mexico and also other fintech players like Surfin can bridge the gap for this underserved, underbanked consumers.

And I just, you know, flew back, as you know, from Mexico after the World Cup soccer games opening.

So the U.S., Canada, Mexico has this World Cup soccer and really help boost the consumer demand of Mexican young people.