A $1 Million Call From a Restaurant Bathroom Built a $60 Billion Bank
Sequoia had closed its Brazil plans, and its young associate had no local roots and no banking experience.
David Senra · Doug Leone on Sequoia, Fear, Great Founders & Starting Over at 69The call came during dinner at the Roast House. Doug Leone, a longtime investor at Sequoia Capital, the Silicon Valley venture firm, excused himself and picked up in the men's room.
On the line was David Velez. Leone said he "hired him out of Stanford Business School" as a young associate, and Velez had moved to Brazil to help Sequoia explore opening an office there. The firm had made two investments and then decided the ideas were too thin, mostly copies of American startups, and there were too few engineers. There would be no Brazil office.
Sequoia invited him to come work in California. He had an idea for a Brazilian venture around cards and money, and went ahead with it. He had no Brazilian roots and no background in banking.
Sequoia seeded him with $1 million. In Leone's view, the bet came down to character. He described Velez as decent, courageous, and impossible to deter.
So when Velez called that night and asked, "What do I do next," they made a plan for the first few steps. Leone took it less as a request for direction than as a request for reassurance, saying Velez knew what to do next and was alone and wanted support.
He did not miss a beat for the first few years, Leone said. Leone put the company, Nubank, a digital bank, at about $60 billion now, adding that he did not know what things are worth anymore.
Questions people ask
What exactly is Nubank?
Nubank is a Brazil-based digital bank that started with a no-fee credit card and a phone app, then added checking accounts, loans, and investing products. It has no branches and signs up customers online, which helped it grow fast in a country where traditional banks charged high fees. It now serves more than 100 million customers across Brazil, Mexico, and Colombia.
What does a $1 million seed investment mean?
A seed investment is one of the first outside checks into a startup, meant to pay for a tiny team to build an early product and find customers. One million dollars was a modest sum for Sequoia, but it gave Velez enough runway to hire, incorporate, and launch. In exchange, Sequoia received an ownership stake that grew enormously in value as Nubank grew.
Why was starting a bank in Brazil such a big opportunity?
Brazil long had a handful of large banks that charged high interest rates and fees, while tens of millions of people lacked good access to credit or simple accounts. A phone-based newcomer could offer lower costs, faster approval, and clearer service without paying for branches. That gap let Nubank add millions of customers who felt overcharged or ignored.