On Saturday night, over 1,000 Revolut customers were gathering in a basement auditorium in central London for a special event.
The Canary Wharf-based company was marking a significant milestone: in just a decade since it was founded, it had reached a mind-blowing 50 million customers.
Eager not to pass up the chance for a blow-out celebration, Revolut’s Russian and Ukrainian founders, Nik Storonsky and Vlad Yatsenko, invited account holders along to a two-day party, featuring speeches from the duo, interviews with Diary of a CEO podcaster Steven Bartlett, and now the grand finale, a performance from Charli XCX.
British banks are not known for organising music concerts and festivals. Why did Revolut do it — and why Charli XCX? Marc, a Revolut employee who won free tickets in a staff ballot, offers a tentative explanation.
“In Revolut it’s about alignment with our spirit — we’re trying to find revolutionaries in everything we work on,” he tells me.
“Charli XCX is one of those, she’s very slick and very 10-x.”
But 10x would understate the rate of Revolut’s growth. Just eight years ago, the fledgeling fintech completed an early-stage funding round that valued it at less than £300m. Now, the company is worth over £30bn, a more than 100-fold increase in its value, in what is almost certainly the fastest growth of any startup the UK tech sector has ever seen. It now ranks among the most valuable banks in Europe.
Max Karpis was one of Revolut’s earliest investors, having first bought shares during its series A crowdfund in 2017. He has kept a keen eye on the company’s development ever since, and feels he knows the key to its success.
“I think it’s the culture that’s the number one thing,” he told UKTN.
“It’s basically: you have to do the best you can do and if you cannot perform well you will be let go. It’s not like the competitors Starling and Monzo, where the culture is very different.
“I believe that the culture of Revolut is the growth and the people is the power.”
Aside from the internal culture, Revolut has worked to build a product suite that looks cool to prospective customers. Unlike the stuffy old high street banks, the company has leaned heavily into cryptocurrencies, and offers perks like fitness class credits, free dating app subscriptions and free VPN software.
“I think young people care about these kinds of perks…but older people didn’t know about the brand Revolut…so it appeals to different markets,” said Josie, an account holder for 18 months who signed up because she liked the junior accounts for her kids.
“it’s just a nice perk I guess,” Izzy, a customer in her early twenties, tells me of the Charli XCX gig.
“There aren’t that many opportunities to see live music for our age group, it’s a difficult position to be in, so it’s nice they’re promoting these events so people can access these things for free .London’s quite hard to get into in terms of the music events so it’s a nice possibility.”
Would free Charli XCX tickets have been enough to make you open an account? For Izzy it’s a definite “no”.
But Ruben, a Revolut customer for more than a year, said he would have considered opening an account on the strength of more gigs like these. “The bank is trustworthy and if the bank is doing things that makes you happy and is what the customer likes then it is one to consider.”
Katie, a veteran account holder who has been a customer for six years, said that competitive rates trumped the ‘cool’ vibe when she first signed up.
“They pay really well…really good interest rate, really good for my mortgage as well…I’m a teacher so any money is better than nothing.”
The speed with which Revolut has been hiring has also been instrumental to its rapid growth. At the start of the coronavirus pandemic in 2020, the company had barely more than 1,000 staff. That has since rocketed to more than 8,000 by the beginning of 2024 and looks set to cross the 10,000 mark imminently.
On the company’s LinkedIn page as of Monday, it is advertising a staggering 1,200 vacancies. But a meaningful share of these roles will likely be replacing departing staff: the firm’s intense culture is thought to have contributed to a higher employee churn than traditional banks.
Nonetheless, Revolut’s total headcount has grown far faster than any of its UK fintech peers. Its nearest rival Monzo has fewer than half the staff, and only money transfer business Wise is hiring at anything close to a similar rate.
“For any newcomer, it’s not straightforward, you need to get the mass to make it viable and the flywheel with Revolut is already there,” Karpis said.
“All the things that Revolut needs in Europe are getting implemented like mortgages and credit. All those account plans like Metal are a very good way to bring in new types of revenue but in banking the credit is where the margin is. There is huge upside from mortgages and credit.”
While Revolut revellers were partying underground, the mood outside the venue was less ebullient. Charli XCX fans had braved the cold, rainy night to gather around the nearby Outernet, a giant outdoor screen which promised to livestream her performance from 10:30pm. But by 10:45pm there was still no livestream, and disappointed fans began to disperse. “There was a bit of back and forth about whether it was really going to happen,” a security guard told me. “Something must have gone wrong.”
Revolut’s rapid growth has not been without a few stumbles. There have been criticisms of its cut-throat corporate culture, which it has since made efforts to rectify. Several of its recent annual reports were filed well after the statutory deadline. It was also dealt a blow from auditors BDO, who last year issued a qualified opinion, warning over revenue recognition difficulties caused by shortcomings in its IT infrastructure. It took the company more than three years to receive a provisional banking licence from the UK regulator, the Prudential Regulatory Authority, a longer-than-average wait for the accreditation.
Supporters of Revolut will dismiss these issues as mere bumps in the road to eventual success. Much with Facebook founder Mark Zuckerberg’s mantra of ‘move fast and break things’, without pushing the boundaries of what is possible to their very limits — even straying beyond those limits, on occasion — it is impossible to achieve the lightning-fast growth the company’s founders are seeking. The trouble is, the banking world is far more heavily regulated than social media, where breaking the law yields little more than a slap on the wrist.
And others in the sector have made mistakes. A decade ago, Metro Bank was, as Revolut is today, hailed as the most promising challenger bank set to take on the decades-long grip on retail banking by the fusty high street chains. Scores of politicians, including then-chancellor George Osborne, lined up to congratulate Metro Bank on its success.
Then problems emerged. In 2019, Metro Bank was found to have classified a portfolio of loans incorrectly, and in doing so failed to meet regulatory capital requirements. Shares tumbled and became among the most-shorted on the stock market. At its peak in 2018, Metro Bank was worth more than £3.5bn. The company is now worth only one-fifth of that.
Revolut, which is already suffering from a high level of fraud complaints, can’t afford a similar misstep. The company appears to be working hard behind the scenes to shore up its fraud processes, hiring scores of compliance staff in areas like data protection, money laundering controls and regulatory affairs. It has also tightened its terms and conditions, giving the company more discretion to shut down customer accounts at speed.
Revolut’s earliest investors have already begun cashing in on its meteoric rise. This week they were handed more than $300m in a secondary share sale backed by Goldman Sachs clients. Some may be holding back ahead of a much-vaunted IPO that could come as soon as next year, while others may be waiting to see whether the bank can break into the US market by securing a banking licence there too.
“I think about [the IPO] a lot,” Karpis said. “But the way I look at Revolut, it’s just getting started. It’s building its infrastructure, laying the groundwork for the path to success.
“Then I look at companies like Google. I remember when it went public, people thought it was overvalued. [But] Google was doing the same thing, building the infrastructure for search, putting in the pipes for the revenues to come.
“So I see Revolut in ten or twenty years as a much, much bigger company. Selling at valuations like today, it could be a mistake.”
Earlier this year, Britain’s tech sector celebrated a major milestone. Cambridge-based chip designer Arm became the country’s first £100bn tech company. The valuation was the culmination of more than three decades of innovation, which saw Arm’s semiconductor architecture become the foremost design used in the majority of smartphones globally.
No company is more likely to be the second to hit this milestone than Revolut — and at the rate it’s growing today, that could happen very soon. If the UK wishes to cement itself as the foremost tech hub in Europe, and usher in a wave of many more £100bn companies, there are few better growth stories to emulate than that of Revolut. Will others follow its lead?
The post Revolut’s unstoppable rise appeared first on UKTN.
