Finance

The CEO of a bank that hit a $1.7 billion valuation in less than 3 years talks to us about US expansion and ‘building something bigger than’ HSBC


LONDON — British fintech startup Revolut announced a $250 million funding round on Wednesday, valuing the two-and-a-half-year-old startup at $1.7 billion.

It makes Revolut one of the fastest European companies to reach so-called “unicorn” status, tech-industry speak for a private company valued at over $1 billion.

“How does it feel? I don’t know,” Revolut’s CEO and founder Nikolay Storonsky told Business Insider in a phone interview on Tuesday. “We still have a lot of work in front of us and we’re going to just keep doing it.”

From FX to travel insurance

Revolut started back in July 2015 as a no-fee foreign exchange card linked to an app that let people easily swap currency. It has proved wildly popular and now has 1.8 million users across Europe.

“We’re the fastest growing ICT company in Europe for sure, maybe even in the world,” Storonsky said.

As it has grown, the company has rapidly launched new products in the app — everything from travel insurance and property investment ISAs to cryptocurrency trading. The startup has also launched “Premium” cards that offer many of these services for a monthly fee and business accounts.

This rapid expansion hasn’t come easy. Storonsky told BI last year staff can work 12 hour days or more and working on weekends is not unusual. “We are about getting s**t done,” Storonsky said at the time.

But the hard work has helped Revolut to break even in December, something relatively rare for a fast-growing, early stage startup.

Storonsky said: “The company’s business model works — out of all of the digital challenger banks, we’re the only one that makes money.

“We’ve got six revenue streams, four of them are main, two are secondary — it’s quite diversified at the moment. We split it by core products, which are interchange, user fees, premium accounts, business accounts, and then add-ons.”

‘I don’t see a limit’

Revolut’s rapid growth of users and revenues has understandably caught the attention of investors worldwide and Storonsky said the company had a number of offers of investment on the table. DST Global, the investment vehicle of Russian billionaire Yuri Milner, ended up leading the round.

“We decided to pursue DST because they are already known to us well and they also were a great brand name because they invested in Facebook, Slack and they were all great stories,” he said.

While Storonsky hasn’t spent much time reflecting on what it means to be a “unicorn”, he is thinking about what Revolut might look like in future.

“I don’t see a limit,” he said. “If you look at HSBC, Barclays, quite a lot banks — they don’t cover globally and they’re already huge companies. It’s definitely possible to build something bigger than them.

“Imagine what will happen to our valuation when we get into credit, mortgages, insurance,” he adds.

The $250 million will be used to fund expansion into new markets and there are several launches “on the finish line.”

“US, Singapore, Australia, and Canada as well. And then a bit later will come Hong Kong, New Zealand, India, Russia, Latin America as well. We’re talking two or three max months — Q2, summer.”

Revolut is currently applying for a banking license in Europe and it will “most likely” apply for one in the UK too.

“In some countries, we’re going to apply for a banking license which means even more capital requirements,” Storonsky said.

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