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As Nubank Crypto Users Grow, CEO David Velez’s Fortune Diminishes

The fintech partnered with Paxos in May to offer Bitcoin and Ethereum to its Brazilian customers; David Vélez no longer appears on Bloomberg’s list of the world’s 500 richest people

Nubank's debut at NYSE
July 26, 2022 | 05:01 pm

São Paulo — Nubank (NU) said it has reached the 1 million crypto users mark in less than a month since its service for buying and selling that asset class was extended to all customers at the end of June.

In partnership with blockchain Paxos Trust, Latin America’s largest fintech started offering Bitcoin (BTC) and Ethereum (XET) in May.

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Paxos also works with PayPal, and Mastercard and provides crypto services to Mercado Pago, the fintech arm of Mercado Libre, which said it reached the 1 million crypto user mark in February this year.

Nubank’s crypto offensive represents an important step in the neobank’s strategy to speed up the number of products that can help monetize customer relationships. This launch was highlighted by CEO and co-founder, David Vélez, at the Q1 results conference in May, along with the bank’s in-app payments tool, NuPay.

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At the time, both Vélez and CFO, Guilherme Lago, said Nubank had detected a significant trend of customer interest in crypto-activities, including transfers to other platforms.

Also in May, Nubank’s market value plummeted to the equivalent of almost 1/3 of what it had achieved in the IPO last December as macroeconomic headwinds - rising interest rates - impacted technology companies, particularly fintechs.

In the month, when the company was under pressure with the end of the stock lock-up on the 17th, Nubank CEO David Vélez had lost nearly $4 billion and had an estimated fortune of $5.2 billion at the beginning of May, according to the Bloomberg Billionaires Index.

After the lock-up of the company’s shares ended, Sequoia, Nubank’s largest shareholder, delivered on its promise and did not dismantle the fintech’s position. But the other US investors, such as Tiger Global and Dragoneer, sold part of the shares on May 31, according to Bloomberg terminal reports.

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Tiger sold 11,193,094 shares, holding 7.25% of Nubank, and Dragoneer sold 1,405,698, and now owns 4.37%.

As of Tuesday (26), Vélez is no longer among the world’s 500 richest people cited in the Bloomberg Billionaires Index, indicating that the CEO’s assets have fallen at least 5% since May. The last billionaire on the list now has an estimated fortune of $4.92 billion.

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Nubank reports second-quarter results on August 15. In a report published last week, Bank of America reckons results for digital banks should remain pressured by rising funding costs, although their customer bases should continue to grow at a solid pace.

Brazil’s BTG, meanwhile, said, also last week, that given the deteriorating macro environment, both locally and outside Brazil, Nubank’s credit growth should slow, especially in the personal loan portfolio, where the fintech has been raising rates and adjusting limits.

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In the credit card segment, BTG sees strong results for portfolio growth, driven by new payment features and the Mexican subsidiary.

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