Startup Europe — The Sifted Podcast
00:00:02 · Amy Lewin
[00:00:02] S0: Hello, and welcome to the Sifted Podcast, the show where we help you get to know the brightest and boldest people and companies in Europe's startup ecosystem. I'm Amy, Sifted's editor and your host. Today I'm joined by my colleague Tom Matsuda, Sifted's FinTech reporter, to talk about Europe's most valuable private company and one that our readers absolutely cannot hear enough about. I am, of course, talking about the digital bank, Revolut. This year, Revolut has been on an absolute tear, launching new products seemingly every other week. Scrolling through recent Sifted headlines about the company, we've covered its plans to move into mortgages, crypto derivatives, telecoms and private banking. It's also revealed that it will open a big new office in Paris and laid out plans to acquire an Argentinian lender as part of a push into Latin America. It's also reported to be in talks to raise new funding from investors which would see it valued at a mega $65,000,000,000 Its CEO Nik Storonsky also can't stay out of the headlines with the Feet reporting in June that he set for a big old payday if the company's valuation can at some point in the future reach a huge $150,000,000,000 And his VC firm Quantum Light also announced the close of a $250,000,000 fund in May. In July last year, Revolut was awarded its long awaited UK banking license, which once it's fully mobilised, enable it to offer yet more products. And we are expecting it to come out of that mobilisation phase fairly soon. On the podcast today, Tom and I will talk about how Revolut keeps up such momentum, what, if anything, could trip it up, and what's likely to be making Revolut headlines in the next few months. Tom, thank you for joining me on the pod.
00:01:45 · Tom Matsuda, Amy Lewin
[00:01:45] S1: Thank you for having me, Amy. [00:01:46] S0: So Revolut has just celebrated its tenth birthday, and yet it seems to have as much going on as ever. What what is it about this company?
00:01:56 · Tom Matsuda
[00:01:56] S1: Yeah. I mean, Revolut's pace of growth is is is nothing really short of of breakneck, really. I mean, just to kind of pull it into into figures back in 2019, pre pandemic, they had just around 10,000,000 users. Now it's grown to to 50... More than 50,000,000 with customer balances over over 30,200,000,000 as well, especially when you compare it to some of its other counterparts, other, neo banks like like Mondo and Starling who are based in The UK, those are kind of figures that those companies could only really, really dream of. Mondo has has revenue of around 1,200,000,000. That's almost half of what what Revolut made, last year, 3,100,000,000. And in terms of kind of customer numbers as well, Monde has 12,000,000, and and Storling has 4,600,000. That's kind of a a drop in the pond, really, if you compare to Revolut, which is over 50,000,000. And, you know, I think every VC and every founder as well across Europe and and further fields as well wants to know what that special source is that that Revolut has. And, yeah, a big, big factor, at least, I understand from speaking with people internally at the company and ex employees as well is Revolut's new bet strategy, which is kind of a a key part of the way, it's able to continually roll out some of these new products that you you mentioned. And this really involves kind of building these specialized business units. They almost operate like micro startups within the company. And their tasks were rapidly testing and developing new products in more experimental areas of financial services. Some of the products that I understand at least, that have kind of gone through this initial testing process are are there products in crypto, in stock trading, and the kind of private banking products as well that are that are currently developing as well. These are really, really small 10 person teams, and they're often led by people with more, I guess, entrepreneurial kind of founder like backgrounds. And, yeah, they're not just responsible for the product development, but it's also the profit and loss as well. So if any of these products don't even gain traction, they can pivot or they can even be shut down immediately if they work. They're obviously gonna be be scaled up quick... More quickly.
00:04:00 · Tom Matsuda, Amy Lewin
And that's kind of part and parcel of how Revolut has been able to continually roll out all these these products you mentioned, telecoms, crypto derivatives, private banking. That... That's kind of part of how they're they're able to move so fast. There's also, obviously, as we've kind of reported quite a lot, the culture is is known to be quite tough and and hardworking, and that obviously really comes from the top, you know, the CEO, Nik Storonsky. It would be fair to say he's been described as quite relentless, demanding, and and kind of focused on execution at all costs. And that really lends itself to a company that is continually able to build out and roll out these new products and financial services faster and quicker than some of its counterpart. [00:04:42] S0: And it is a huge company now. Yes. [00:04:45] S1: 10,000 people now work there. You definitely couldn't call it a start up. [00:04:49] S0: It's a serious business. And Yeah. And as you said, Nik Storonsky is Russian born founder and CEO and ex Lehman Brothers and Credit Suisse trader, you know, he's become almost this mythical figure in Startup land, hasn't he? So many people sort of refer to him as the example of a sort of super driven, very good at execution founder. What what else do we do we know about him?
00:05:14 · Tom Matsuda
[00:05:14] S1: Well, at least according to our recent Internet searching, he's he's really into kite surfing. Aside from that, my my kind of conversations with ex employees and investors are really that, yeah, he's so driven and so focused that they don't actually know that much about his personal life. You know, I've asked in the past, like, what does he do outside work? How would you describe him as a person? And it's more... It's always come back to his his job as a founder and really that focus on execution at all costs. That's quite different from his cofounder, Yatsenko, who's the chief technology officer at Revolut. He's more been described as, like, the human heart in Revolut's leadership team. He's more focused on individual career development compared to Nik who really just wants to see the results happened and and, yeah, the product rolled out. Vlad is more someone who will kind of take time to work with each employee and kind of build them up a bit more. Yeah. Whereas Nik is just focused on getting that product out. And he's really known as like the product guy as well. I've interviewed him in the past. That was really when like our conversation got going was as soon as we started talking about products. So you can really see that that passion is really there.
00:06:23 · Amy Lewin, Tom Matsuda
[00:06:23] S0: I was having lunch with someone yesterday whose partner used to be very senior at Revolut, and she described Nik as like a helicopter. So he's always circling above everything. And then when there's a problem, he will swoop down and land and get involved. And she also said that apparently with his direct reports, he is quite sort of functional one on ones where he follows a set pattern every time. [00:06:49] S1: Yeah. That doesn't surprise me at all. And [00:06:52] S0: so one big thing we were all talking about to do with Revolut for a really long time was its UK banking licence. So famously, it took over three years for Revolut to be granted this bank licence when some of its competitors like Monzo and Storling had achieved banking licence status very early on in their startup journey, whereas Revolut applied a little bit later when it was already bigger and had more customers. It's still in this phase, isn't it, of mobilisation, so it's kind of testing out whether it's ready to fully have the bank licence. But what do we know about why it took so long?