A2Z Fintech
00:40:31 · Zubin Vandrevala, Aman Narain
[00:40:31] S1: Yeah. And and Europe says he'll survive it. Interchange there has been capped at, what, 20, 30 basis points for years, and he built this anyway. [00:40:41] S0: Then a prediction, I suppose, because we should put our money where our mouths are. Citi's ATMs lead didn't last. The competitors took years to catch up, but they did catch up. Reed's global consumer bank lasted, though, for forty years before his successes began selling it. The stack advantage is real, but the compliance is where it gets tested. So before Revolut reaches a 100 countries, it will pull out, I think, of at least a couple. [00:41:10] S1: Yeah. And I'll take the other side. Right? Every red cell he's ever met, he's tried to engineer in a way. A country is just a very large red cell. He'll fix it before he leaves it. [00:41:20] S0: In the log, we check-in three years. [00:41:23] S1: Yeah. And if I win, you're buying the flat whites, man. Oak knock. [00:41:26] S0: Oak knock. Yeah. Canary Wharf large one. [00:41:30] S1: When he'll call it a relaunch? [00:41:32] S0: And notice what the bet really is, Zubin. It's a bet on one man's patience with a red cell, which actually neatly brings us to what that patience is worth to him. [00:41:44] S1: $33,000,000,000 his reported stake, right? 28.7% of $150,000,000,000 right? Make it physical. Dollars 33,000,000,000 is what the whole of Revolut was worth at its, what, 2021 fund round. Five years ago, that number was the company. Today, it's his slice.
00:41:44 · Zubin Vandrevala, Aman Narain
[00:41:44] S1: $33,000,000,000 his reported stake, right? 28.7% of $150,000,000,000 right? Make it physical. Dollars 33,000,000,000 is what the whole of Revolut was worth at its, what, 2021 fund round. Five years ago, that number was the company. Today, it's his slice. [00:42:06] S0: And it's growing faster than most companies do. 75,000,000,000 late last year, 115 in July, 40,000,000,000 in under a year. Now let's put a banker next to him. Jamie Dimon, twenty years running the biggest bank, arguably the most successful bank in America, and by the estimates we're working, worth around 3,100,000,000. Not bad. But Storonsky is 10 diamonds. And at 200,000,000,000, where his stake reportedly rises to 40%, 24 diamonds. [00:42:44] S1: That's a good line as the wrong point. Time fortune is compensations, pay stock awards to an employee set by a board and voted on by shareholders. It's cap in the low millions. Storonsky's fortune is ownership. He hasn't paid it. He kept it. Right? So banking as a career caps you. Banking as a founder, I guess, does not. [00:43:07] S0: You're right. I got carried away. It's a good lie, but it's the wrong lie. Strike the ratio. Keep the instrument. [00:43:15] S1: And the instrument tells you that what each man does next. Right? Dimon, by the accounts we have, has begun selling JPMC stock. Storonsky, by the accounts, went the other way.
00:43:15 · Zubin Vandrevala, Aman Narain
[00:43:15] S1: And the instrument tells you that what each man does next. Right? Dimon, by the accounts we have, has begun selling JPMC stock. Storonsky, by the accounts, went the other way. [00:43:25] S0: This is Project Shasta, and I'll say what the dossier reports and no more. In August, shareholders voted on amended articles. Per press reports, the ceiling on borrowing against Revolut shares rises from $50,000,000 to $2.50. And the 10% cap goes and so does the independent board veto. [00:43:46] S1: And we owe him the other side. Right? Revolut calls it administrative housekeeping. Another reading says it was an employee liquidity program, not a founder margin facility. So we don't know which is right. And and nobody has published the loan to value limits or the margin call triggers. Right? Open questions, not a story. [00:44:05] S0: But if the reporting is right, it's the rule running backwards. He won't let the bank lend more than a fifth of its deposits, but he'd borrow against his own company with the veto gone. [00:44:17] S1: Sure. Sure. Sure. If the report is right. So let's let's move on. [00:44:21] S0: Yeah. Yeah. Then there's the comparison I'd rather make, and it's about temperament, not about money, Zubin. If anyone in the story is the next Jamie Dimon, it's David Velez, A lender, prices default for a living, builds that fortress one country at a time. Storonsky isn't the next diamond. [00:44:43] S1: Next Elon?
00:44:43 · Zubin Vandrevala, Aman Narain
[00:44:43] S1: Next Elon? [00:44:45] S0: He's the next Elon. And and not because of the speed and the scale. Plenty of founders have those. Because of the transformation, Musk didn't build a cheaper car. He changed what a car company is. Storonsky isn't building a cheaper bank. He's trying to change what a bank is for. And he'll [00:45:05] S1: take that compliment, right? Like FTC's Patrick Jenkins wrote this month that Europe may finally be buying his pitch to be the closest thing the continent has to a Bezos or a Musk. [00:45:16] S0: Right? Then let's count the parallels because there are more than what people realize. [00:45:22] S1: Yeah. Like, first principles, Musk famously priced a rocket for its raw materials, not for what the industry charged. Storonsky was trained in Phystech to derive everything and memorize nothing. [00:45:35] S0: The culture. In 2019, after an investigation into the hours, he told his staff, Revolut is not a lifestyle business. In November 2022, Musk told Twitter staff they'd need to be extremely hardcore. Long hours, high intensity. [00:45:53] S1: Right. Same email three years apart. I guess different letterheads. [00:45:57] S0: Yeah. The org chart is flat, engineering led, as we talked about, and the founder inside every product decision. [00:46:05] S1: Yeah. The the side projects. Right? Musk has rockets, tunnels, brain implants. Swarovski has venture funds run by an algorithm and a stated interest in health tech.
00:46:05 · Zubin Vandrevala, Aman Narain
[00:46:05] S1: Yeah. The the side projects. Right? Musk has rockets, tunnels, brain implants. Swarovski has venture funds run by an algorithm and a stated interest in health tech. [00:46:16] S0: And then there's the pay. Last November, Tesla shareholders approved a package worth up to $8,000,000,000,000 in 12 tranches, if Tesla reaches, of course, dollars 8,500,000,000,000 in market value. Revolut's board, as reported, has been modeling Storonsky's next package on Musk's and on Renee Haas at ARM. On top of the 40 at 200,000,000,000, a further award if Revolut holds 500. [00:46:46] S1: You know, and I'll defend it the way Tesla's board did. Right? A hurdle that high cost stakeholders, nothing unless it's cleared. And if it's cleared, then they're all four times richer. Right? It's the cheapest option a board can ride. [00:47:00] S0: Unless it changes how he drives. A 500,000,000,000 target rewards exactly the expansion we just spent ten minutes on. The package and the empire are essentially the same bet. [00:47:12] S1: And here's the parallel that almost is too neat. Right? In 1999, Musk tried to build exactly this. X.com, one app for all your money. And his co founders pushed him out while he was flying to his honeymoon, and the company became PayPal. Right? We've talked about this in PayPal episodes, but a bunch of other times as well. [00:47:31] S0: Yeah. So Musk tried to build the Everything Bank and got fired from it and went off to build cars and rockets. Storonsky is building the Everything Bank.
00:47:31 · Aman Narain, Zubin Vandrevala
[00:47:31] S0: Yeah. So Musk tried to build the Everything Bank and got fired from it and went off to build cars and rockets. Storonsky is building the Everything Bank. [00:47:41] S1: And I guess here's where the comparison breaks, right, which is the interesting bit. Must bet the companies on physics, rockets that might blow up on the pad. Storonsky refuses to bet his own credit. [00:47:54] S0: One takes the risk everyone can see, the other removes it, and both keep the risks that left them in place. [00:48:01] S1: He'd keep that line for the end. Now let's prosecute him. [00:48:06] S0: The case against in full. You defend. [00:48:09] S1: Alright. Alright. Alright. Gladly. He's easier to defend than you think and harder to defend than he thinks. [00:48:16] S0: Let's start with his own words. Storonsky had said Citigroup and the big banks grew by buying other banks and ended up with systems that don't talk to each other. And the irony is hard to miss because if one bank has been exposed for weak controls during breakneck expansion, it's been revolute. [00:48:35] S1: Yeah. And the defense stipulates the irony. Right? The systems that don't talk to each other is a city problem. Controls that can't be kept up is a revenue problem. Right? Different disease, and his is maybe curable.