Nikolay Storonsky, the co-founder and CEO of Revolut makes it sound simple: “I needed this service myself, so I created it. I didn’t need a social network so I wouldn’t have made one“. He managed to find a problem and solve it differently than other professionals in this field. How did he do that? “I like finding the most simple and elegant solutions to problems. Every time we evolve to a new level, we uncover new questions, which need new solutions“. Working with such point of view got Nikolay and his fintech startup — Revolut — to reach a quintupled value in just 6 months, which is a rare story in Silicon Valley and in London, where it all started. Today we will tell you all about it.
Revolut was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, and was presented as an app-based banking alternative with a multi-currency card. It fell under the so-called ‘challenger bank’ category — there are several of these digital banks in Europe and they are looking to compete with larger lenders. Let’s look at few examples. German challenger bank N26 recently announced that it has 1 million users signed up to its platform. Revolut generates 2 billion dollars a month in transaction volume, while N26 has a monthly transaction volume of 1.17 billion dollars.
You might think that there are many competitors in this field that could influence Revolut’s success in the future. But Nikolay admits that Revolut is actually not concerned by similar fintech competitors — interestingly, he expects that main competition for this Europe’s new fintech unicorn will come from such tech giants like Apple, Amazon, Facebook and Google. Having huge amounts of customer data, capital and employees would let them break into the banking sector quite easily.
Yes, you’ve read it right — Revolut is Europe’s latest fintech unicorn. In case you did not know, Europe now has 41 tech companies that are valued to more than one billion dollars and have earned the right to be called unicorns. About a month ago it announced the newest numbers from inside: Revolut has raised an additional 250 million dollars in additional funding and increased its valuation 5 times in less than a year to 1.7 billion dollars. All this makes Revolut one of the fastest tech companies in Europe to reach the unicorn status.
Revolut now has more than 250 thousand daily active users, and its obvious that Nikolay’s mission to convince people that there are better alternatives to traditional banks is working. “Our focus, since we launched, has been to do everything completely opposite to traditional banks,“ Nikolay explains. And so they did. Revolut allowed users to spend globally at the real exchange rate and eliminate unfair fees for standard transactions, countless payments and ATM withdrawals.
It gives users an opportunity to open an account quickly and easily in just 60 seconds,
transfer in 23 currencies to any bank in the world and spend fee-free in 120 currencies with a contactless MasterCard.
Besides financial service offerings, Revolut also aims to position itself as a great alternative to traditional banks offering a wealth of technological advantages. Think real-time spending alters, budgeting controls, bill splitting and the ability to immediately freeze cards in case they are lost or stolen. It also gives its users overseas medical insurance, a doubling of limits on ATM withdrawals and 24 hours customer support 7 days per week.
And that is not all when it comes to Revolut’s services and features. Nikolay wanted to find some new uncrossed waters in the banking and fintech industry, and offered Revolut’s customers an opportunity to save money with ‘Vaults’ and invest in ‘Bitcoin Cash’.
Vault can be set up in seconds and is represented as an easiest and fastest way to save for your financial goals. It can be done via automatically rounding up your every transaction, setting up a recurring payment or simply making one-off contributions.
Now, when it comes to cryptocurrencies, Revolut has a strong opinion: “Last year, we promised to add new Cryptocurrencies to the Revolut app, so say hello to XRP and Bitcoin Cash. We have always believed that the world of Cryptocurrencies should be open and available to everyone, and not reserved for the tech-savvy and digital currency enthusiasts.“ And so, last years’s December in Revolut marked the launch of a Bitcoin Cash that allowed its users to instantly buy, hold and sell in 3 cryptocurrencies — bitcoin, litecoin and ether — with just a touch of a button.
Speaking about services, Revolut has always aimed to disrupt traditional baking systems and its services — including investments. Just a few weeks ago company announced that Revolut is building a commission-free trading platform on its app. Basically this means that Revolut users will be able to invest in stocks from British and US listed firms, as well as exchange traded funds and options — in seconds and without paying commissions.
If you’re questioning why they decided to do that, we have a quote for you: “we want to break down barriers to entry in investing, which include high costs, confusing interfaces and complicated sign-up processes.“
Actually, after a little research you would definitely find some fintech companies that focus on commission-free trading (think ‘Robinhood’ in the US), but Revolut is about to become the first digital bank to integrate an investment platform into its app alongside all other everyday banking services that it provides to its customers.
However, such success cannot come without hard work and amazing team. Nikolay is actually a strong believer in hard work and Revolut employees — at this time there are about 350 of
them — typically work 13 hours per day, including the weekends. Nikolay says that “as you make the world better, you really need to try hard, and unfortunately trying hard means — in many cases — you need to spend time on it.“
Such long work hours are not formally enforced in the company, but Nikolay always aims to hire people that are really motivated — and so, long working hours often come out as a result of it. Interestingly, company’s CEO assures that over the past 3 years there has never been a burn-out employee in Revolut, and he is even ready to pay for a 2 week holiday for anyone who feels overwhelmed by the job and just can’t handle the demands.
And what about the CEO himself? Nikolay admits that on a typical day, he is in the office from 8am to 10pm, and definitely agrees that working in Revolut is not that simple, as personally he is really demanding.
And what about the future? No secret that for now Revolut is only available in Europe: approximately 900 thousand Revolut customers are UK-based, with France and Poland emerging as the second and third largest markets. However, in the next few months this situation is about to change, as company is expected to finally launch in the US, Canada, Singapore, Hong Kong, Australia and New Zealand.
Another big thing is coming up on Revolut as well: in order to take Revolut to the next level and expand its services even more, company have applied for a European Banking License late last year.
While many Revolut users already feel like they’re using a traditional bank account with an IBAN and a payment card, it’s almost hard to believe that this fintech startup still doesn’t have a proper banking license in its pocket. But this situation is expected to change in a nearest time.
Interestingly, Revolut expressed its willingness to establish a financial institution and get a banking license in Lithuania, collaborating with the Central Bank of the country. Nikolay says that “we are delighted to collaborate with the Central Bank of Lithuania. This is an important step for us to improve our service for our existing customers, and demonstrates Lithuania’s willingness to collaborate with the biggest fintech startups to bring innovation to financial services.“
This means that customer funds will be protected under the European Deposit Protection Scheme, which will allow its users to safely and confidently store higher balances in personal Revolut accounts. It is also expected to bring personal loans to Revolut’s account, which can be more than helpful in case of planning a bigger purchase, taking a longer holiday or basically anything else that requires a small cash injection. Having the banking license in place will also let Revolut support direct debits and, if Revolut shuts down, the European Union will cover the funds of its customers and pay back up to 100 thousand euros per user.
How do you measure one’s success? Numbers are one way to do it. In Revolut’s case, another way is customer’s satisfaction factor — the one that goes beyond numbers and truly reaches people, making them happy and eager to use its provided services, as well as wait for new exciting announcements about fresh disruptions that usually happen to be no less than great. So “Welcome to a world Beyond Banking. Welcome to Revolut.“