Ex-Credit Suisse Trader Sees Two-Year Card Startup Making ProfitBy
Nikolay Storonsky started Revolut currency cards firm in 2015
Revolut is expanding into loans with P2P firm Lending Works
Nikolay Storonsky left his job as a trader for Credit Suisse Group AG to start a company that sells prepaid travel cards that can be loaded with different currencies. Two years after opening his firm, it’s about to turn a profit.
Revolut Ltd. has almost 600,000 customers and $15 million in investment from European venture funds including Balderton Capital and Index Ventures, he said in an interview. On Tuesday, the London-based company rolled out plans to start offering loans using peer-to-peer platform Lending Works Ltd.
Storonsky, 32, is among many former bankers -- from ex-JPMorgan Chase & Co. executive Blythe Masters to erstwhile Barclays Plc Chief Executive Officer Antony Jenkins -- who are taking advantage of new technology to win customers in an industry dominated by their old employers. Although most fintech firms have yet to achieve significant scale and profit, the startups as a whole are threatening to upend banks handicapped by creaky computer systems.
Revolut makes money by charging fees on ATM withdrawals and taking a cut from merchant charges on payments in shops. Since it began in July 2015, the company has processed more than $2 billion in foreign-exchange transactions, Storonsky said.
A former equity derivatives trader born in Russia, he started Revolut with Vlad Yatsenko, a technology developer who used to work for Deutsche Bank AG. If all goes according to plan, the company will be profitable by November and have as many as 2 million customers by the end of the year, he said.
“As a banker I’d already reached the maximum and it became very boring,” Storonsky said. “Because of the downturn in the markets, business was decreasing and there wasn’t as much client flow. ”
Revolut began offering checking accounts earlier this year, parking customer deposits in Lloyds Banking Group Plc and Barclays Plc because it doesn’t have a banking license. His firm plans to expand into insurance at the end of March and wealth management from April or May this year through partnerships with third-party companies he declined to identify because the plans aren’t public yet.
“We provide our customers with much better rates than competitor banks and the idea always was to expand beyond foreign exchange,” Storonsky said. “We’re trying to launch as fast as possible, the speed of that is much more important to prioritize than setting a target for how big we want this to grow.”