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Kitesurfing founder of Revolut rides fintech wave to $33bn valuation

The first time Revolut became Britain’s most valuable fintech, Nikolay Storonsky was disappointed.

A fundraising round last year lifted his company’s valuation well ahead of any British peers to $ 5.5bn, but the chief executive “really wanted to get $ 10bn or more”, according to one person who worked with him on the deal. “In some ways, his view was ‘it was too cheap before’ . . . he’s got a pretty bullish mentality.”

This week, the digital bank Storonsky co-founded six years ago went several steps further. An $ 800m fundraising gave Revolut a $ 33bn valuation, making it the biggest private technology company in British history, and one of the largest in the world.

Revolut was hailed by senior figures — including Rishi Sunak, the UK’s chancellor of the exchequer — as a “great British fintech success story”, though Storonsky himself did not stick around to celebrate.

While the company’s chief financial officer, Mikko Salovaara, announced the fundraising to reporters early on Thursday morning, his chief executive was already en route to a rare holiday — kitesurfing in Rhodes.

“Even when it’s super intense, that’s his way of keeping straight under pressure,” said Martin Mignot, an early Revolut investor with Index Ventures. “He is totally unflappable . . . I don’t think he ever doubted his success.”

The trip speaks to the priorities of the 36-year-old former investment banker, who has developed a reputation among colleagues and peers as a ferociously hard worker who is obsessed with data and takes a hands-on approach to building Revolut’s products, but has less interest in the showmanship and sales skills of some high-profile tech entrepreneurs.

“I never agreed with the role of CEO as salesperson, or just a person with vision,” Storonsky told the Financial Times. “You need to have a vision we all want to achieve . . . [but] every manager needs to know the details. If they don’t, they can’t change the direction of the company, they can’t distinguish what is good and what is bad.”

A former equity derivatives trader who studied physics and was a competitive swimmer at university, Storonsky founded Revolut with chief technology officer, Vlad Yatsenko, in 2015. It launched in London as a prepaid debit card offering cheap foreign exchange for frequent travellers, but has since expanded into more than 30 countries, and services from commodity trading to business banking.

His long-term ambition is to create a “superapp” that would provide all the financial services a customer might need in a single place. That concept showed Storonsky’s “contrarian” thinking, said Mignot, at a time when other fintechs were focused on narrow niches.

“People in Britain are very conservative,” Storonsky said. “People don’t make big, ambitious goals. It’s preferred to set moderate goals with a high probability of success. But in order to be really large, you really need to strive for huge goals, which seem like they’re low probability.”

His drive has been key to attracting investors — he said the latest fundraising round was completed in less than three weeks — and securing Revolut’s $ 33bn valuation.

Revolut launched as a prepaid debit card offering cheap foreign exchange for frequent travellers, but has since expanded into more than 30 countries, © Charlie Bibby/FT

One former staff member said: “Does what Revolut do at the moment justify the number? Hell no. But they produce so much new product so rapidly . . . it’s a bet that Storonsky is a beast who has created this product machine that’s going to take over Europe or the world.”

Storonsky said the company pulled ahead of rivals because it “outworked everyone else”. Still, what supporters see as high standards and drive have been viewed by some critics as an aggressive approach that encouraged an exhausting workplace culture, particularly in Revolut’s early days.

John Doran, partner at TCV, who was the lead investor in Revolut’s 2020 fundraising, said: “Nik is a visionary with a high bar and extraordinary ambition. His management style perhaps isn’t everyone’s preferred method, but he is data driven, methodical and always fair”.

He added that “Nik has grown massively as a leader over the years we’ve known each other”.

Storonsky has formed an unlikely duo with Martin Gilbert, founder of Aberdeen Asset Management and Revolut’s chair, whose reputation is the polar opposite of Storonsky’s — Gilbert is a City grandee known for throwing whisky-filled parties at the World Economic Forum in Davos.

Storonsky has said he appreciated advice from someone with decades of experience founding and running a large financial company, in contrast to many “expert” investors in the technology industry who have little real experience of building companies. Gilbert, for his part, this week said “people misunderstand [Storonsky] quite dramatically”.

“He’s got a great sense of humour . . . [and] he’s a good listener, which a lot of people don’t see. He doesn’t make the mistake of saying too much — he has the ability to just answer a question, and won’t then fill an awkward silence. People mistake that for other traits.”

Storonsky’s reputation for coldness has also, in the views of some investors and staff, been exacerbated by xenophobia — he is a British citizen, but was born in Russia and his father worked for a division of state-owned gas company Gazprom.

His Russian links have caused particular controversy in Lithuania, where Revolut provoked anger among some politicians after it received its first banking licence in 2018.

The company has also faced scrutiny over whether its rapid growth would be too much for compliance staff to keep up with, prompting substantial investment in strengthening systems and recruiting staff to reassure regulators and help it secure new licences.

This week’s fundraising pushed Revolut’s valuation a nose ahead of NatWest, one of the UK’s largest high street banks with £453bn in customer deposits to Revolut’s £4.6bn. The comparison led several bankers to describe the investment as “madness”, but Storonsky said he was happy for traditional banks to keep doubting the company.

“It makes our path much easier if people and banks don’t take us seriously, we can be hidden and steal in and move faster. Hopefully one day they wake up and don’t have a business.”

Additional reporting by Tim Bradshaw

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Take that, Brussels! Brexit win as London STILL world's most vital fintech hub outside US

Take that, Brussels! Brexit win as London STILL world's most vital fintech hub outside US

The 2021 Global Fintech Rankings, compiled by Findexable, also showed the fintech space outside of the capital and throughout the rest of the UK is expanding at a rapid pace. This is evidence Brexit and the current Covid pandemic has had next to no impact on London’s start-up scene, with the City’s fintech space predominantly powered by the growing “challenger bank” sector. 

The newly-published Index, which first came out in 2019, ranks the fintech ecosystems of more than 264 cities across 83 countries, using Findexable’s data from its own records.

Data has also been collated and verified by the industry’s Global Partnership Network, which includes more than 60 fintech associations around the world.

London remains second behind San Francisco, and despite making a number of substantial gains since last year’s Index, EU countries have been unable to unseat the capital in the rankings.

EU cities such as Berlin have risen three places to sixth and Stockholm jump 21 positions to 14th, while Moscow and Zurich both moved up 12 spots to 18th and 26th respectively.

Hamburg leaped 13 places to 30th but in a major blow for the Brussels trading bloc, Paris plunged 21 positions to a lowly 36th.

But the latest Index also shows massive progress for a number of UK cities outside of London as the country continues to defy gloomy post-Brexit forecasts.

The latest rankings show two UK cities have made it into the top 50.

Manchester has climbed 19 places to 34th position, while Cambridge surged into the top 40 by jumping a massive 55 places to 38th position.

READ MORE: Brexit LIVE: EU plot to grab City business begins

“We have even seen fintech companies emerge in towns like Macclesfield, Ashford, Caerphilly and Inverness.”

He added: “It is part of a greater push toward bridging the gap between companies and their customers that we have identified happening across the world since the annual report started in 2019, but which has accelerated in the last 12 months as a result of the pandemic driving more people to use digital finance.

“Where there are more customers there will be more businesses, and in an innovation-driven sector like fintech that translates to greater chances for new ideas that can shake up the entire industry.”

Mambu Chief Customer Officer Elliott Limb, chief customer officer of cloud banking platform Mambu, said: “Fintechs are part of a global revolution to make financial services easier, faster and simpler, and the UK is a major part of this.

“They are changing the way we save, spend, borrow, and invest money.

“Whether competing, cooperating or supporting traditional financial institutions, they are reshaping digital services for a real-time, on-demand world.”

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