Revolut's Meteoric Rise: From Fintech Startup to $45 Billion Giant
By Tommy Reggiori Wilkes and Amy-Jo Crowley
LONDON (Multibagger) – At Revolut's summer celebration last year, founder and CEO Nik Storonsky delivered a clear directive to his team: make Revolut bigger, better, and a formidable competitor to traditional banks.
Fast forward to today, and Revolut's valuation has soared to an astonishing $45 billion. Employees recently sold shares to investors, propelling the nine-year-old fintech ahead of some of Europe's most venerable financial institutions, including the 334-year-old Barclays and NatWest.
Revolutionizing the Financial Industry
This landmark deal not only solidifies London-based Revolut as Europe's most valuable startup but also serves as a personal triumph for 40-year-old Storonsky. Fresh off securing a UK banking license after a grueling three-year effort, Revolut is now poised to challenge established banks across more sectors, including mortgages.
Storonsky's stake in Revolut is now valued at approximately $8 billion, according to Multibagger calculations based on his disclosed shareholding. He ranks 45th on the Sunday Times Rich List 2024, with a net worth of £4.38 billion ($5.7 billion).
From Derivatives Trader to Fintech Visionary
A former derivatives trader at Lehman Brothers and Credit Suisse, Storonsky left traditional banking in 2013 to co-found Revolut. The inspiration? Outrageous transaction fees and commissions he encountered while traveling. Armed with a background in physics and mathematics, Storonsky set out to disrupt the financial services industry.
Despite facing skepticism, the struggles of rival fintechs, and challenging funding environments, Revolut's valuation has skyrocketed by 36% from $33 billion in 2021 to $45 billion today. This valuation is particularly striking for a company that reported $2.2 billion in revenue last year amidst a market downturn.
Steve McLaughlin, founder of FT Partners and a banking advisor for Revolut, sees even greater potential. "We projected out to 2040, and people thought it was overpriced in 2021, but look who’s been proven wrong," McLaughlin told Multibagger.
Inside Revolut: Culture and Challenges
Storonsky's leadership style is characterized by a relentless focus on detail and data. Known for his informal approach, he frequently challenges employees directly, fostering a high-pressure but dynamic work environment.
However, this intense culture has drawn criticism and led to high staff turnover. Storonsky has defended Revolut's workplace practices, emphasizing lessons learned and improvements made. The company has attracted top talent from mainstream finance, such as ex-Standard Life Aberdeen co-CEO Martin Gilbert and former Goldman Sachs banker Michael Sherwood.
Despite regulatory scrutiny and delays in obtaining a UK banking license, Storonsky remains undeterred. He has criticized Britain as a business environment and hinted at a potential New York listing over London.
What Lies Ahead
With its new banking license, Revolut's expansion into additional sectors will likely attract increased regulatory attention. Consumer watchdogs have already criticized the company's fraud reimbursement practices. However, Revolut insists it takes fraud seriously and has robust protections in place.
For early employees, the rewards have been substantial, turning many into multi-millionaires. Storonsky recently expressed his delight at their ability to reap the benefits of the company's success through a $500 million share sale.
The big question now is whether these achievements and Storonsky's ambitions will fast-track plans for a stock market listing, either in the United States or London.
Breaking It Down: What This Means for You
Key Takeaways:
- Revolut's Valuation: Now valued at $45 billion, Revolut has surpassed traditional financial giants like Barclays and NatWest.
- Storonsky's Journey: From a derivatives trader to a fintech leader, Storonsky's vision has revolutionized the financial industry.
- Company Culture: While dynamic and challenging, Revolut's workplace environment has faced criticism and high turnover.
- Regulatory Scrutiny: As Revolut expands, it will face more regulatory oversight, particularly concerning fraud protection.
- Future Listing: Potential stock market listing in New York or London could be on the horizon.
Impact on Your Finances:
- Investment Opportunities: Revolut's growth could present new investment opportunities in the fintech sector.
- Banking Services: As Revolut expands, expect more competitive financial products, potentially lowering costs and fees for consumers.
- Market Dynamics: Traditional banks may innovate faster to compete, leading to better services for all consumers.
Understanding Revolut's rise helps you grasp the changing landscape of financial services and the potential benefits and risks it brings to your personal finances.