The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:23:56 · S1, Nik Storonsky
[00:23:56] S1: and so forth. So it's it's pretty visual and, very clear. It's gonna sound so random, but Ben Affleck gave a speech the other day about AI in movies. And he said that art is knowing what to build, and craft is knowing when to stop, which I thought was a really nice description of the of simplicity. Do you worry that with so many bets, you lose simplicity [00:24:20] S0: and you get overcrowding? You need to solve this problem through interface. So interface should be super simple. Right? So you need to show the right product at the right time. If you look at the car, right, car has, you know, a lot of functionality. Well, then it's it's pretty simple. Right? And then on top of it, we've got electric cars, like screens. I mean, if you think about functionality of the car, there's a lot of... Yeah, right? But then it's it's very simply built. So you just drive where you want, you play music when you want, and so on. So the same with banking product. And ultimately, people need a lot of products. But then if you position everything in a very simple way, there is no problem. Which product would you most like today that you haven't done? Private bank. I think it was cool to build a private bank. [00:25:04] S1: Agreed. Why haven't you done it? [00:25:06] S0: I think it was too early. Now we have a lot of customers, and then a lot of customers actually have a lot of balances with us. Some of them have, you know, millions on our accounts. So I think it's time to build the private banking for people with a lot of liquid assets.
00:25:06 · Nik Storonsky, S1
[00:25:06] S0: I think it was too early. Now we have a lot of customers, and then a lot of customers actually have a lot of balances with us. Some of them have, you know, millions on our accounts. So I think it's time to build the private banking for people with a lot of liquid assets. [00:25:21] S1: So we have Revolut today. What does Revolut look like in three years' time, both from a product and from a business perspective? Three years. [00:25:29] S0: So in three years' time, we would love to be probably alive in 50 markets to be [00:25:35] S1: Where are we staying? How many are we live in? [00:25:37] S0: 39 now. So we want to be number one in, say, 90% for these markets in terms of growth. How many [00:25:44] S1: are we number one in today?
00:25:44 · S1, Nik Storonsky
[00:25:44] S1: are we number one in today? [00:25:46] S0: I think we are number one in 19 or 20. 19, 20. Basically fully localized as a bank in say 40 markets. So providing local accounts, local credit cards, local payment methods, loans, and so on. So you just be as competitive as local banks or even even more competitive. So that's the goal. And then hopefully to have, I will say, 30 to 40,000,000 directive people. So now we have around 10,000,000 directive people. So we have that in three years. Which market is the most important that you win? I think in three years it'll be too early for US to win. So, yeah, maybe if we win every single large market in Europe. So top top 10 markets in Europe, yeah. And then right now we have our penetration of market share. We'll say it depends from 5% to sometimes 70%. On average, would say 10%. So if we manage to go from 10% to 30, 40% market share in our top 10 markets, so there will be already, probably four x business compared to what it [00:26:48] S1: is now. Do you think the market makeup of banking will fundamentally shift in the next generation? And what I mean by that is I saw actually you again talk with Martin, and you said about the huge fragmentation in the banking market. [00:26:59] S0: Yeah. [00:27:00] S1: Do you think that will continue, or do you think we will see, certainly, a lot more concentration with fewer, bigger players?
00:27:00 · S1, Nik Storonsky
[00:27:00] S1: Do you think that will continue, or do you think we will see, certainly, a lot more concentration with fewer, bigger players? [00:27:06] S0: Yeah. I think because of different regulations, different markets, all the banks are very local. Right? Because it's very hard to kind of, you know, build a bank in one country and then scale it outside without, proper tech. So I think we have, as a company, we have a unique opportunity to actually scale and build our global bank across many, many markets purely because tech allows us to do it. And actually, if you think about it, a similar similar picture was in venture business. Right? So when the venture business started, you have a lot of VC funds focused on The US, some VC funds focused on Europe, a lot VC funds focused on Asia, and so on. So they are very similar to banking as well. [00:27:47] S1: And so we move into a world of globalized banking players who own, bluntly, much larger portfolios. [00:27:52] S0: Yeah. I think what time? In five years' time, you'll you'll see much less number of banks, and there are a few global players. Nik, what needs to change [00:28:01] S1: in the business before you go public? [00:28:03] S0: I mean, already, we already run the business as a public company. We're just not public company. So we we run everything because we're a bank, so we need to have even stronger controls compared to public companies.
00:28:03 · Nik Storonsky, S1
[00:28:03] S0: I mean, already, we already run the business as a public company. We're just not public company. So we we run everything because we're a bank, so we need to have even stronger controls compared to public companies. [00:28:15] S1: So why would you want to go public? You know, we saw Databricks do this secondary transaction. I think yesterday it was 6 to 8,000,000,000 of liquidity to investors and to employees. Obviously, Revolut publicly done the secondaries. Why would you want to? Oh, we still have [00:28:29] S0: a lot of VC investors. Right? But sooner or later, they'll want to kind of, you know, sell their shareholdings and the return money to investors. I think public markets allow you to to have more liquidity compared to just private markets. [00:28:41] S1: There's no way this is gonna get kept in, but I have to ask it. [00:28:44] S0: Sure. [00:28:45] S1: Would you list in London? [00:28:46] S0: The problem with The UK is if you think about UK versus US, our UK is much more liquid. And then, trading in The US is free, right? If you look at trading in UK, you always buy a standard tax which is 0.5%. So I just don't understand how the product which is being provided by UK can compete with the product provided by US. It is less liquid, so it's much worse compared to US. Plus, it's much more expensive because you pay stamp duty. So it's just not rational. [00:29:15] S1: I agree. And so you would list in
00:29:15 · S1, Nik Storonsky
[00:29:15] S1: I agree. And so you would list in [00:29:17] S0: The US? Because everyone's a rational person. Right? That's that's all I can answer. So unless I have, you know, a better product from UK, then... Yeah. If I get the bet... Better product from UK, I will list in UK. But so far, if you just compare these products, one is far ahead compared to the other. [00:29:33] S1: How do you respond to the suggestions that you've moved to Dubai? [00:29:36] S0: Well, I I do spend some time in Dubai, every year. So we have a large team there, plus we're getting licenses. But, no, I don't live currently in Dubai. [00:29:45] S1: Is the culture different across the world? When you go to different offices around the world, is Revolut a monoculture, or are [00:29:51] S0: they actually very different independent cultures? Our culture is the same across all offices. Offices. So people are smart, people are hungry, people are working hard, people want to achieve things. That's common across all the cultures. [00:30:02] S1: Can I ask you one on? You mentioned the liquidity to investors earlier. You've been unbelievable at maintaining a really tight control of your Cathayne role where other founders haven't. What have you done to maintain such good control of the cap table? Control it in the water. In preventing secondaries, preventing private transactions, preventing side deals? Yeah. Just because, again, it's pretty obvious. Right?