Revolut- Europe's $20Bn Neo-Banking Giant

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Revolut- Europe's $20Bn Neo-Banking Giant<br>Started as a prepaid card for cross border payments, the startup quickly grew into a neo-bank for individuals and businesses. Let's take a behind the scenes peak into UK's most valued startup.

Kaushik Tiwari<br>Sep 12, 2023

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Revolut is a neo-banking company, started by  Nikolay Storonsky and Vlad Yatsenko, both the founders come from an Investment Banking background.

The company was started in 2016, as a prepaid card startup for cross-border payments to combat high exchange fees and poor exchange rates that traditional banks charge.

Revolut has raised $1.7Bn in total funding from investors including DST Global, Ribbit Capital, Tiger Global, Softbank, and it is valued at $20Bn.

Revolut is the United Kingdom’s most valued startup at a $20Bn valuation.<br>Nikolay Storonsky spent the early years of his career as an equity derivatives trader at Lehman Brothers and then at Deutsche Bank. He was travelling across Europe when faced issues with high exchange fees and poor exchange rates that traditional banks charge.<br>Vlad Yatsenko also worked across Investment Banks like Credit Suisse and Deutsche as a developer. Nikolay, although had a great idea and financial background, needed a developer to build on his ideas, and luckily he met Vlad.<br>Together, they started working on what is now Revolut’s most successful product - a prepaid debit card that would enable users to spend multiple currencies at the interbank exchange rate.<br>Due to the success of Revolut’s prepaid card, the company gained over 100K personal banking users in just its first year.<br>A Card Company to a Neo-Bank

Revolut was already the go-to solution for prepaid cards if you wanted to avoid high exchange fees and poor exchange rates while traveling across borders.<br>But you don’t become the UK’s most valued startup by offering prepaid cards and taking 0.5-1% transaction fees. Revolut wanted to go bigger.

The co-founders, while digitizing the pre-paid card space, saw the challenges that most consumers face while dealing with the age-old technology of traditional banks. They decided to digitize the entire banking space.<br>Today, Revolut offers personal & business banking products. Their products, for ease of understanding, can be divided into (i) Essentials, (ii) Investing, and (iii) Lifestyle Management, as suggested by our friends at Contrary.<br>Revolut’s Consumer Banking Stack

As part of Essential consumer banking services , Revolut allows users spread over 200 countries to transfer money, make payments, and split bills. It also offers a currency converter, enabling users to purchase and hold up to 29 fiat currencies and over 100 crypto tokens. A couple of additional services that Revolut offers as part of the Essentials package:<br>Early Salary enables users to request and receive their salary a day earlier without fees.

Rewards provide users with discounts and cashback at selected stores.

Saving Vaults allow users to earn up to 3% AER/Gross (variable) paid daily.

Open Banking provides a dashboard for users to view bank accounts from multiple providers in a single interface within the Revolut app.

Subscription Management enables users to oversee subscriptions, receive trial notifications, and block subscription charges.

As a part of Revolut Investment offerings , its users can trade stocks, cryptocurrencies, and even rare metals - gold, silver, etc. Users can start investing in over 1.5K global stocks commission-free, starting with $1. Additionally, Revolut provides educational materials and courses to educate users on investing in stocks and cryptocurrencies.

Revolut’s Lifestyle services take the company to the reason for its existence. users can book holiday accommodations within the platform, earning up to 10% cash back on purchases. While traveling, customers can access over 1K airport lounges for additional costs. Further, customers can spend money at real exchange rates in 29 currencies while traveling without hidden fees. Additionally, Revolut offers pet insurance and 24/7 vet access via video call for additional costs.<br>Revolut’s Business Banking Stack

Revolut’s business banking services allow businesses to send money globally and set up multi-currency accounts in over 25 currencies. Employers can also invite employees and manage spending in real-time - just like Ramp’s corporate card offerings.<br>Spend Management enables businesses to automate their bookkeeping process by integrating with Xero, QuickBooks, or Sage....