Nubank

Revolut

Nubank

Nubank makes money from credit card interchange fees (1-3% of every transaction), interest on credit card balances and personal loans, and net interest income from deposits (lending out customer deposits at higher rates than it pays in savings interest). The company also earns fees from insurance products and investment marketplace commissions.

The key insight is that by being digital-only with no branches, Nubank's cost to serve a customer is roughly 85% lower than traditional Brazilian banks.

Revolut

Revolut uses a freemium model with subscription tiers. The free Standard account covers basic spending, transfers, and currency exchange up to $1,000/month at interbank rates.

Plus is $3.99/month, Premium is $9.99/month, Metal is $16.99/month, and Ultra is $45/month — each tier adds perks like higher exchange limits, travel insurance, airport lounge access, cashback, and crypto trading. Revolut also earns revenue from interchange fees on card transactions, crypto trading spreads, and premium business accounts.

Nubank

David Vélez grew up in Colombia, studied at Stanford Business School, and worked at Sequoia Capital in Silicon Valley. In 2012, Sequoia sent him to Brazil to find investment opportunities.

What he found instead was the worst banking experience he'd ever encountered.

Brazilian banks were controlled by five massive institutions that charged outrageous fees — annual credit card fees of $200+, account maintenance fees, fees on fees. Customer service was a nightmare.

Branches required hours of waiting. The banks had zero incentive to improve because they had a captive market of 200 million people and no competition.

Vélez saw the opportunity and left Sequoia to start Nubank in 2013 with Cristina Junqueira (a former Itaú banker) and Edward Wible (a Princeton engineer). Their first product was a purple credit card — no annual fee, managed entirely through a beautiful app, with transparent billing and real-time notifications.

In a country where banks treated customers like an inconvenience, Nubank treated them like human beings.

Revolut

Nikolay Storonsky was a trader at Credit Suisse and Deutsche Bank in London. Every time he traveled for work, he noticed the same rip-off: banks were charging 3-5% hidden fees on foreign exchange transactions.

You'd pay in euros and your bank would convert at a terrible rate and pocket the difference. Storonsky calculated he was losing hundreds of pounds a year on currency conversion alone.

In 2015, he teamed up with Vlad Yatsenko, a developer, and built Revolut. The first version was simple — a prepaid card linked to an app that offered interbank exchange rates with no markup.

You could hold multiple currencies, switch between them instantly, and spend abroad without getting robbed by your bank. The product launched through a crowdfunding campaign on Crowdcube that raised over $1 million.

The early adopters were frequent travelers, expats, and digital nomads — people who felt the foreign exchange pain most acutely. Word spread fast through London's tech and finance circles.

Within a year, Revolut had 100,000 users.

Nubank

Nubank grew through word of mouth in a country where everyone hated their bank. The product was so much better than the alternative that customers became evangelists.

The invite-only launch created exclusivity and a waitlist that hit millions. People would beg friends for an invite code because getting a Nubank card felt like escaping prison.

The cost advantage was structural. Traditional Brazilian banks operated thousands of branches with tens of thousands of employees.

Nubank had an app and a customer service team. This let Nubank offer free products that banks charged hundreds of dollars for.

The unit economics were unbeatable — when your competitor has 4,000 branches and you have zero, you can afford to be generous.

Geographic expansion into Mexico and Colombia replicated the playbook. Both countries had the same banking problem — concentrated, fee-heavy, customer-hostile banks.

Nubank launched in Mexico in 2019 and Colombia in 2020. Mexico alone already has over 8 million Nubank customers.

Revolut

Revolut grew through aggressive multi-market expansion and viral product features. The fee-free foreign spending was the initial hook — travelers told other travelers.

The app added features at a relentless pace: crypto trading, stock investing, budgeting tools, salary advance, and insurance. Every feature gave users another reason to move more of their financial life into Revolut.

The referral program was engineered for virality. Users got cash bonuses for inviting friends.

Temporary metal cards, limited-time perks, and gamified challenges kept users engaged and sharing. Revolut also offered higher savings rates than traditional banks, pulling in deposits from customers who had only used it for travel spending.

Geographic expansion was systematic. Starting in the UK, Revolut rolled out across Europe country by country, then into the US, Australia, Japan, and Singapore.

Each market launch followed the same playbook — launch with the multi-currency card, build the user base, then layer on banking features once they had a critical mass.

Nubank

The IPO timing was terrible. Nubank went public on the NYSE in December 2021 at a $41 billion valuation.

The stock immediately crashed as the global tech sell-off hit and rising interest rates in Brazil increased the cost of capital. The stock fell from $12 to under $4 by mid-2022.

Vélez had to spend a year convincing investors that a Brazilian digital bank was worth owning during a global risk-off environment.

Credit risk in Latin America is inherently higher. Brazil has volatile inflation, currency risk, and a large unbanked population with limited credit history.

Nubank's loan book grew rapidly, and delinquency rates spiked in 2022 as Brazil's economy slowed. Managing credit risk at scale in emerging markets is fundamentally harder than in developed economies.

Nubank has since tightened underwriting and delinquency has improved, but it remains the biggest operational risk.

Regulatory complexity across three countries is a constant headache. Brazil, Mexico, and Colombia each have different banking regulations, consumer protection laws, and compliance requirements.

Navigating three regulatory environments simultaneously while growing at speed requires significant legal and compliance investment.

Revolut

The work culture has been toxic by multiple accounts. Reports from former employees describe 80-hour weeks, unpaid trial shifts for job candidates, extreme pressure, and a fear-based management style.

Storonsky has been accused of creating a "cult of overwork." High employee turnover and Glassdoor reviews paint a picture of a company that moves fast partly because it burns through people. Revolut has made public efforts to improve culture, but the reputation lingers.

Getting a UK banking license took three years. Revolut applied for a UK banking license in 2021 and didn't receive it until July 2024.

The delay was partly due to concerns about the company's financial crime controls and compliance processes. Without a banking license, Revolut couldn't offer full banking services or FSCS-protected deposits in its home market — a significant competitive disadvantage against licensed neobanks like Monzo and Starling.

Profitability came late. Despite having 45 million customers, Revolut didn't post its first annual profit until 2023 — eight years after founding.

The company had been investing heavily in expansion, new products, and compliance. While the 2023 profit ($545 million pre-tax) was impressive, proving sustained profitability remains the challenge for a company valued at $45 billion.

Nubank

Nu Credit Card is the flagship — a no-annual-fee Mastercard managed entirely through the app. NuConta is the digital bank account with free transfers and bill payments.

Nu Invest is the investment platform offering stocks, ETFs, and fixed income. Personal Loans are offered based on credit behavior within the app.

Nu Life Insurance and other insurance products are distributed through the app. Ultraviolet is the premium tier with higher limits, airport lounges, and additional perks.

NuPay is the payments solution for merchants.

Revolut

Revolut is a financial super-app. Everyday banking covers current accounts, multi-currency wallets, and instant transfers.

Crypto trading lets users buy and sell 200+ cryptocurrencies. Stock trading offers commission-free investing in US and European stocks.

Savings Vaults are auto-saving features that round up purchases. Revolut Business is the commercial banking arm for companies.

Revolut Pay is their checkout solution for merchants. Travel insurance, device insurance, and medical insurance are bundled into premium tiers.

RevPoints is a loyalty program that earns points on every card transaction.

Nubank

Sequoia Capital, Tiger Global, DST Global, Tencent, Berkshire Hathaway, SoftBank, Dragoneer

Revolut

Index Ventures, Balderton Capital, DST Global, Tiger Global, SoftBank, Coatue Management, D1 Capital