Revolut

Revolut Ltd.

Type	Private
Industry	FinTech
Founded	1 July 2015; 6 years ago (2015-07-01)[1]
Founder	Nikolay Storonsky Vlad Yatsenko
Headquarters	London, England, UK
Key people	Nikolay Storonsky (CEO) Vladyslav Yatsenko (CTO) Ronald "Ron" Oliveira (CEO, Revolut USA)
Products	current accounts, debit cards, stock trading, currency exchange, foreign exchange, insurance
Services	Peer-to-peer payments, Currency Exchange
Revenue	£222.1 million (2020)[2]
Net income	-£206 million (2020)[3]
Number of employees	1,596[4] (2019)
Website	www.revolut.com

Revolut is a financial technology company that offers banking services. Headquartered in London, England, it was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. It offers accounts featuring currency exchange, debit cards, virtual cards, Apple Pay, interest-bearing "vaults", commission-free stock trading, crypto, commodities, and other services. Revolut has expanded into new markets such as Japan^[5] and expanding staff from 1500 to around 5000.^[6] In November 2020 it was breaking even^[7] and, with a £4.2 billion valuation became the UK's most valuable fintech.^[8] In January 2021 it applied for a UK banking licence.^[9][10] A $800 million funding round in July 2021 brought the value of the company to $33 billion, making it the most valuable UK tech startup in history.^[11][12][13]

History[]

Revolut was founded on 1 July 2015^[1] by Nikolay Storonsky from Russia and Vlad Yatsenko from Ukraine.^[14] The company was originally based in Level39, a financial technology incubator in Canary Wharf, London.^[15]

On 26 April 2018, Revolut announced that it had raised a further $250 million in a funding round led by Hong Kong-based DST Global, reaching a total valuation of $1.8 billion and thus becoming a unicorn.^[16] DST Global was founded by Yuri Milner, who has been backed by the Kremlin in his previous investments.^[17]

In December 2018, Revolut secured a Challenger bank licence from European Central Bank, facilitated by the Bank of Lithuania, authorising it to accept deposits and offer consumer credits, but not to provide investment services. At the same time, an Electronic Money Institution licence was also issued by the Bank of Lithuania.^[18][19]

In March 2019, the company's chief financial officer Peter Higgins resigned. TechCrunch reported that he had quit following allegations of compliance lapses,^[20] however Revolut denied that he had left for these reasons.^[21]

In July 2019, Revolut launched commission-free stock trading in New York Stock Exchange and NASDAQ, initially for customers in its Metal plan.^[22] This was subsequently made available to all users.^[23]

In August 2019, the company announced several hires with experience in traditional banking, including Wolfgang Bardorf, formerly executive director at Goldman Sachs and the global head of liquidity models and methodologies at Deutsche Bank, Philip Doyle, previously head of financial crime at ClearBank and fraud prevention manager at Visa, and Stefan Wille, previously senior vice-president of finance at N26 and corporate finance manager at Credit Suisse.^[24]

In October 2019, the company announced a global deal with Visa, following which it would expand into 24 new markets and hire around 3,500 additional staff.^[6]

In February 2020, Revolut completed a funding round that more than tripled its value, valuing the company at £4.2 billion and becoming the United Kingdom's most valuable financial technology startup.^[8]

In August 2020, Revolut launched its financial app in Japan.^[5]

In November 2020, Revolut became profitable.^[7]

In January 2021, the company announced that it had applied for a UK banking licence.^[9][10] In March 2021, Revolut applied for a bank charter in the US via applications with the FDIC and the California Department of Financial Protection.^[25]

In July 2021, Revolut raised $800 million from investors, including SoftBank Group, Tiger Global Management at a $33 billion valuation.^[13]

Founder[]

Nikolay Storonsky is the co-founder and CEO of Revolut. He is a British-Russian entrepreneur.^{[26][27][28][29][30]} He studied for a master's degree in physics at Moscow Institute of Physics and Technology, and during this time became a state champion swimmer.^[31] He completed a separate masters in economics at New Economic School in Moscow.^[31] Prior to founding Revolut, Storonsky was a trader at Credit Suisse and Lehman Brothers.^[32] Alongside Ukrainian entrepreneur Vlad Yatsenko, former Credit Suisse and Deutsche Bank developer, Storonsky set up Revolut and raised around $3.5 million,^[33] saying in an interview with Forbes:

I thought of the business three years ago. I was travelling a lot and wasting hundreds of pounds on foreign transaction fees and exchange rate commissions which just didn’t feel right. As someone with a financial background I knew exactly the rates I should be getting. As a solution, I tried to find a multi-currency card and was later told it wasn’t possible. But I was determined to make it work.^[33]

His father Nikolay Mironovich Storonsky^[34] is Deputy General Director of Science for Gazprom Promgaz since 2017, and First Deputy General Director for Science Gazprom Promgaz OAO.^[35]

Services[]

Revolut offers banking services including GBP and EUR bank accounts, debit cards, fee-free currency exchange, stock trading, cryptocurrency exchange and peer-to-peer payments.^[36] Revolut's mobile app supports spending and ATM withdrawals in 120 currencies and transfers in 29 currencies directly from the app. Payments at weekends incur an extra fee of 0.5% to 2% protecting them against exchange rate fluctuations.^[37]

It also provides customers access to cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP by exchanging with 25 fiat currencies.^[38] A fee of 1.5% for buying or selling applies. Crypto cannot be deposited or spent, only converted back to fiat inside Revolut. Additionally, Revolut banks with Metropolitan Commercial Bank^[39] of New York, who do not allow the transfer of Fiat money to or from cryptocurrency exchanges.

It provides an equities trading facility, with access to a range of US stocks and fractional share purchase/sale. Stocks purchased in the app cannot be transferred to another broker, but must be sold/converted back to cash, which can then be withdrawn.

Controversies[]

Automated suspension of accounts[]

Revolut, in common with traditional financial institutions, uses algorithms to identify money laundering, fraud and other criminal activity, but unlike the rest of the banking industry, Revolut's algorithms additionally trigger an automated suspension of accounts. Revolut explains that "the system is programmed to temporarily lock an account and place it in a queue, until one of our compliance agents can review the case".^[40]

It is increasingly reported that Revolut's algorithms suspend a growing number of accounts in error for weeks or months at a time because Revolut does not have sufficient compliance agents to review the automated suspensions, and that while Revolut pays no interest on the large suspended balances, Revolut can earn interest on the funds in wholesale money markets. Customers whose accounts are suspended are blocked from contacting Revolut's usual support channel and instead receive automated responses from a chatbot.^[41][42][43] The Daily Telegraph reported that Revolut suspended an account containing £90,000 for more than two months^[44] and that another customer travelled 500 miles from Auvergne in France to Revolut's London offices in an unsuccessful attempt to recover £15,000 in an account that Revolut had similarly frozen without any justification being given.^[45] In a further case reported by The Times, Revolut suspended and subsequently closed a business account containing €300,000 belonging to Priorité Energie, which "helps low-income families in Paris to insulate their homes under a government initiative", preventing the company from paying its staff.^[46]

According to Finews.com, Revolut's public internet forums contain almost 500 complaints by customers about locked accounts and a lack of response from Revolut's support team.^[47] Many customers in each forum thread report a total loss of access to their money.^{[48][49][50][51][52][53][54]} Finews also reported that Revolut asked a customer to provide to Revolut her tax statement and subsequently tax statements of people who had sent her small amounts of money, and that when she failed to provide the tax statements of those third parties, Revolut blocked her account without giving due notice.^{[citation needed]}

Employment practices[]

In March 2019, Wired published an exposé of the company's employment practices and work culture. This found evidence of unpaid work, high staff turnover and employees being ordered to work weekends to meet performance indicators.^[55] A later article in December 2019 by Sifted noted that Revolut had a higher rating than its peers on Glassdoor.^[56]

In June 2020, Wired published a further exposé of Revolut's dismissal of employees during the COVID-19 pandemic, in which employees, particularly in Kraków, were given the choice of being terminated for underperformance or a mutual agreement to leave the company voluntarily, in order to reduce the headline number of 62 redundancies announced by Revolut. The report explained that "Current and former Revolut employees say staff were coerced into accepting terminations, even though the company had no legal grounds to fire them" and that employees in Porto were pressured into agreeing to a salary sacrifice scheme in order to keep their jobs.^[57] According to Wired, in a message sent to the 495-strong customer support team on Slack shortly after the salary sacrifice scheme was announced, head of support Inna Grynova urged them to participate:

“So far, almost 20 per cent of our employees globally have submitted their sacrifices. In Support we’ve gathered only 44 submitions [sic] (out of 495 employees) which is a very small number. Our goal is to use SSS as an alternative to the need of employees redundancy and other cost cuts. So the success of SSS depends on all of us. If it won’t be enough, unfortunately we would need to go for the other steps, which we’ll try to avoid. The positive impact of SSS can be achieved only when we work together.”

References[]

External links[]

• Official website
• Media related to Revolut at Wikimedia Commons