Nik Storonsky

Unveiling the 2024 UK Fintech Top 50 Report (Top 50 UK private fintech companies). Takeaway 1: less growth but much more profit -      Total Revenues of top 50 UK Fintech companies in 2023: £6.2bn; -      Revenues growth rate 2023 vs 2022: +45%; -      The annual revenues growth rate declined from 68% in 2022 to 45% in 2023; -      Combined positive EBITDA of £169m (vs a total loss of over £300m in 2022); -      Chip, Oxbury Bank, Truelayer and Moneybox registered the highest revenues growth rate in 2023 (+800%, +243%, +189%, +183%). -      The 10 most profitable companies have also a higher growth rate than the rest (+74% growth rate vs 48% of the benchmark). Takeaway 2: The breakeven message was heard by the sector -      17 companies are now profitable (34% of the panel); -      20 companies are > the Rule of 40 (Growth Rate + EBITDA Margin should be over 40%) vs. 10 in 2022; -      The median EBITDA margin was -39% (-96% in 2022); -      For the second year in a row Oak North has the best EBITDA Margin (64%), followed by Starling (47%) and Trading 212 UK (33%); -      Median GP Margin of 76%, The companies with positive EBITDA have a GP Margin 35% higher than the unprofitable companies (81% vs 60%). Takeaway 3: Fintech is just 10 years old but represents already 5% of the total UK finance industry -      The revenues of the top 50 fintech companies represented in 2023 around 5% of the total revenues of the top 5 UK Banks vs 3% in 2022; -      On average the companies in the fintech index are 10 years old (the top 5 UK banks are on average 249 years old).   Takeaway 4: Valuation are still too high, new down rounds are coming -      On average the fintech panel is valued @ 11.1x Revenues (latest disclosed valuation considered); -      The fintech sector in the US (70 listed players) is valued at 4.5x Revenues; -      In the UK, the main fintech listed players are Wise (8x revenues, 19x Earnings), AJ Bell (8x Revenues, 20x Earnings) and Pension Bee (12x Revenues, still loss making).

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Truelayer the UK open banking co did £12m revenue in 2023 up 2.5x YoY Is open finance finally here? It has 👉 10m users 👉 Raised $250m 👉 At a $1bb+ valuation TrueLayer counts companies like Coinbase and Revolut as customers. It is also the UK partner for Stripe and Stripe link. However 🔥 It burned £55m to make £12m 🔥 It will be out of cash unless it raises soon While it's cut headcount from over 430 to just under 350 what's next? 🧠 It's taken a long time for open finance to take off but Pay by Bank is finally there. Slowly but surely It's becoming an option at checkout. 🧠 The stripe partnership is huge. They get access to giant global companies and huge payment volumes. 🧠 This is way lower than Plaids $308m revenue. Showing how different the UK market is to the US, where open banking account opening is standadd 🧠 I wonder if stripe acquires them. The timing could be perfect. They get a talented team and they could "over pay" compared to VCs while giving the team a great exit. Huge shout out to Seb Johnson 📊 for the data and chart

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E142: Revolut's $45B valuation with employee share sale, Anduril Industries’s $1.5B round pushes valuation to $14B, Groq’s $640M Series D boosts valuation by 143%, Google acqui-hires Character.AI team, Reddit acquires Memorable AI, J.P. Morgan rolls out LLM suite to 60,000 employees, Ola Electric pops 20% on IPO | AG Dillon & Co Pre-IPO Stock Research – Aug 9, 2024 WEBINAR ANNOUNCEMENT: AG Dillon will be hosting a webinar on August 14 at 1:30pm ET titled “How RIAs Can Invest into Venture Capital and Still Custody at Schwab”. Step by step details of investing into alternatives at Schwab and we’ll explore how AG Dillon venture capital funds are specifically designed to eliminate incremental RIA operational and administrative work when investing into alternatives. Register at www.agdillon.com/webinar. Weekly pre-IPO reports… - Valuations, revenue multiples, performance = www.agdillon.com/reports - Market update pdf = www.agdillon.com/update - Index fact sheet = www.agdillon.com/index 00:06 | Revolut's $45B Valuation with Employee Share Sale - Online bank initiated $500M share sale at $45B valuation (secondary) - Europe’s most valuable start-up - Eligible employees (7,000 staff) can sell 20% of vested shares at $865.42/share - Secured UK banking license; 9M UK customers, 45M globally - 2023: £438M pre-tax profit, revenue almost doubled to £1.8B - Valuation surged from $15B, Jan secondary market valuation, to $45B in 8 months (+200%) 01:19 | Anduril’s $1.5B Round Pushes Valuation to $14B - Defense tech company - Raised $1.5B, new valuation $14B - Significant increase from $10B in Dec 2023 - Revenue doubled to $500M; 28x valuation multiple - Funding led by Founders Fund, Sands Capital; new backers: Fidelity, Baillie Gifford - Investment to expand "Arsenal" manufacturing platform; 5M+ sq ft for mass production of military systems 02:40 | Groq’s $640M Series D Boosts Valuation by 143% - Semiconductor company focused on AI inference chips - Raised $640M in Series D, valuation up to $2.8B (primary) - 143% increase from Feb 2024 round - Backed by Cisco, Samsung, BlackRock - Funds to scale tokens-as-a-service and deploy 108,000 LPUs by 2025 - Aims to challenge Nvidia in AI chip market 03:18 | Google Acqui-hires Character.AI Team - Custom AI chatbot company - Google licensed Character.AI's technology in an acqui-hire deal - Co-founders and some team members to join Google - Character.AI’s valuation rose to $2.5B (secondary), up from $1B - Company will operate independently with interim CEO Dominic Perella - Users sent 371M messages to chatbots; introduced voice features 04:06 | Reddit Acquires Memorable AI 04:42 | JPMorgan Rolls Out LLM Suite to 60,000 Employees 05:22 | Ola Electric Pops 20% on IPO 05:58 | Pre-IPO Stock Market Weekly Performance - www.agdillon.com/reports for full pdf 06:29 | Pre-IPO Stock Vintage Index Weekly Performance - www.agdillon.com/index for pdf with constituent level performance by year

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Revolut's Rise: Digital Banking and the Power of AI - A Weekend Reading Revolut Ltd., a leading European fintech firm, has recently seen significant valuation changes and strategic moves.  In March, an investment trust managed by Schroders Plc raised Revolut's valuation by 45%, implying a worth of $25.7 billion. This rebound in valuation highlights renewed investor confidence in the fintech sector, despite a drop from its 2021 peak valuation of $33 billion.  The Schroders report credits Revolut’s international expansion and solid progress for this positive reassessment. As reported by Financial Times and Bloomberg, Revolut has hired Morgan Stanley to facilitate the sale of $500 million in existing shares, potentially raising the company valuation to $40 billion. This move aims to provide liquidity for employees and early investors amid a sluggish IPO market.  The $40billion would "surpass the market capitalisation of UK lender NatWest and Paris-based Société Générale, and be on par with that of Lloyds Banking Group." Revolut is also actively pursuing a UK banking license, which would allow it to expand its services in its home market.  In the business banking space, the Revolut Business offer has all the chances to become dominant in geographies like Romania and Eastern Europe. I am not an official promoter of Revolut Business, but I have to note that their offering includes, in addition to standard banking: primary accounting, expense management, invoicing and, most recently, payments to treasury accounts. (for Romania) Read More: Financial Times: https://lnkd.in/dk65wZg8 Bloomberg News: https://lnkd.in/dWptyRGB

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Revolut's move into the Wealth Management space is one to watch.   Revolut’s decision to spin off $9.5B in wealth assets through an independent trading app signals its growing ambition to capture more of the global wealth and trading opportunity, and their recent pursuit of regulatory approvals in the Middle East only underscores their global ambitions.   From a Middle East perspective, this move adds to the rising number of global and regional players targeting the highly attractive wealth market. With its vast growth potential and shifting demographics, the region is becoming increasingly competitive.   For banks in particular, this should be a wake-up call. Digital transformations in Wealth are notoriously slow in taking root, especially in a market where investors and advisors alike are left with limited digital experiences, limited product variety, and underutilized analytics. This slow progress leaves incumbents vulnerable to new entrants with a more agile, data-driven, and client-centric approach.   For end investors, however, this is good news. It’s likely to spur a virtuous race towards better wealth and trading propositions.   But the real question remains: how long will it take for incumbents to embrace the risk-taking and agility needed to thrive in this highly complex, yet critical sector?   If Revolut taught us anything, it’s that moving fast and breaking the mold isn’t just a trend - it’s the future.

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Accel, the Silicon Valley investor known for backing Monzo Bank, GoCardless, and Synthesia, has raised a $650 million European startup fund 💰 Andrei Brasoveanu, a Partner at Accel, commented on LinkedIn: “When we opened our office in London 24 years ago, Europe’s tech ecosystem was nascent and far from an obvious choice to build a team on the ground. It took another five years for the first unicorn to appear, but now the talent flywheel is spinning and so many fantastic companies have paved the way for the next generation of founders.” According to Dealroom.co, the European and Israeli VC market is now nearly half the size of the US market, with approximately $66 billion invested in 2023... 👇 Read more below 👇 #StartupsMagazine #Startups #Entrepreneur #VC #Funding #VCMarket

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𝐏𝐮𝐭𝐭𝐢𝐧𝐠 𝐑𝐞𝐯𝐨𝐥𝐮𝐭’𝐬 $𝟏𝟎𝟎𝐁 𝐀𝐦𝐛𝐢𝐭𝐢𝐨𝐧 𝐢𝐧 𝐏𝐞𝐫𝐬𝐩𝐞𝐜𝐭𝐢𝐯𝐞 Revolut wants to hit: • 100M customers • 100 countries • $100B revenue For comparison, here’s where JPMorgan Chase’s Consumer & Community Banking (CCB) division stands today: • 88.5M customers • Operating in 2 countries (primarily the US) • $70.1B in revenue Why CCB? It’s considered the leader in banking efficiency: • ROE: 38% • Overhead ratio: 50% • Digital adoption rate: 75% What’s fascinating? Revolut isn’t just aiming to match JPM’s scale—it’s planning to surpass it. And across all three metrics. But here’s the kicker: Even banking giants like JPM chose focused geographic expansion over the "everywhere" approach. There's probably a lesson in there somewhere... The ambition is admirable, but the execution will be the real story to watch. Banking at this scale isn't just about technology - it's about navigating dozens of different regulatory frameworks while maintaining efficiency. Thoughts? Is this the new face of banking ambition, or are we witnessing peak fintech optimism? #Fintech #Banking #Innovation

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Well, the weekend is off to a bleak start for Evolve Bank & Trust. The 23 pager C&D is mainly #AML and #OFAC related. I have many (not so popular) comments in the attached pdf. But here are some highlights and lessons learned for #banks involved in #BaaS and #fintech banking. And also, some lessons for fintechs. Without a bank partner, you have no business. So, while the US has a very nascent AML regulatory framework for #paymentprocessors and #fintechs, the regulations - in spirit - still apply to your fintech. 1) Staffing. Who would've thought?! 🙄 Not enough people. Not the right people. Why are bank boards and mgmt only concerned with ensuring enough loan people? (I know the answer...) 2) Board issues again. Of course, we will just continue to not make any changes to the legacy board talent and knowledge, and therefore will continue to see banks with massive penalties (formal or via cost of turn-around). If your board is not asking any questions related to AML people, threats, typologies, costs, changes needed, etc = ineffective board. 3) Authority. Again. Not the illusion, but actual real, "FULL AUTONOMY" and "meaningful decision-making authority" is what this order uses. Pg. 12. 🙌 4) In their fintech division - their plan must address: "steps to enable the timely identification, measurement, and reporting of risk exposures associated with each fintech partner, product, program, service, business line, or customer..." What is the best way to do that?? THREAT analysis. I say it a lot. Every #webinar, post, speaking gig... without a proper #threat analysis of each fintech and their products, you can't carry out what the regulators want. (pg. 6 and 11) 5) Finally some notes on what is expected for #ledger and sub-ledger activities for the fintech partners.(pg. 6) 6) Within 90 days they must perform a "comprehensive review of the effectiveness of the Bank’s program". Interesting. I'm a HUGE fan of indicators of in/effectiveness. Without any defined effectiveness definition from #FinCEN or any other agency (that is actually operational and not just fluff), how will this person give something that is materially impactful? 7) OFAC - operationalize the Treasury's OFAC Framework. It is not hard. It takes time, but I guarantee you will find deficiencies before your examiners. Fintechs - OFAC is not just for your bank partner. Come to the table with YOUR OFAC plan. #Sanctions programs apply to any and all global fintechs that touch USD, on US soil (any part of the process) or are owned or staffed by US persons. All in all, they cannot expand, offer new services or products until everything in this order is remediated. Just for the AML and sanctions turn-around, in my opinion, those costs will exceed $2MM. And that doesn't account for increases in staff, better technology, etc. 😥 More thoughts in the comments below... check out the first one! It's a doozy. ☠ #ifollowdirtymoney Federal Reserve Board

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Revolut seeks $40bn valuation through share sale – FT "...Sources with knowledge of the plans told the FT that the fintech is working with Morgan Stanley to sell about $500 million worth of existing shares, including those held by employees, to reach this valuation. This comes after an investor revaluation earlier this year placed Revolut’s valuation at $25.7 billion, which was still down from its 2021 valuation of $33 billion..." #valuation #sharesale #neobank Financial Times Finextra _________________________________ If you want to immediately see new content that I curate 👉🏻 Ring my bell (🔔) and follow #informationbanker or if you want to get the posts that got noticed in my weekly What’d I miss newsletter, subscribe here: "https://lnkd.in/d5_KvWwu"

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Revolut recently solidified its position as Europe's most valuable startup. Having recently received its UK banking licence and reported impressive results for 2023 (including pre-tax profit of £438 million), Revolut will conduct an internal share sale of up to $500m, available only to eligible employees, at an implied valuation of $45b. As Josipa Majic Predin writes in Forbes: "Founded in 2015, this digital banking startup has not only disrupted the financial services industry but has also rewritten the rulebook on startup investing." Just months after its inception, Revolut partnered with Crowdcube a leading equity crowdfunding platform in the UK to offer retail investors a slice of the action. 433 individuals backed the campaign. Up to 2.4% of the company was offered at a £40 million valuation. In just seven years, these early investors have seen their stakes grow by an astonishing 40,000%!!! "The average investment during this crowdfunding round was £2,152. At the time, it may have seemed like a significant amount to risk on an unproven startup. Fast forward to 2023, and those same shares are now estimated to be worth around £860,000, based on Revolut's latest valuation of $33 billion in 2021 and now $45 billion in 2024." Understandably, and thankfully, more and more companies are turning to equity crowdfunding to fund their early rounds of investment. The UK equity crowdfunding industry is many years ahead of Australia's. Although late to the party, Australia's crowd sourced funding (CSF) industry is now among the biggest and best in the world. Second largest per capita, behind only the UK. I am tremendously proud of the contribution the Birchal Crew has made to the development of Australia's CSF industry. Two Australian CSF companies are listed now. Another recently announced a shareholder buyback representing a return of over 600% for early investors. Thanks to the efforts and vision of both sides of government, Australian companies have a regulated pathway to sourcing capital from over 10 million investors. And growth opportunities like Revolut's can now be offered to the many, rather than profiting the few in the know. #equitycrowdfunding #thefuture #innovation #startups #funding https://lnkd.in/g4PcZJi8

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Revolut Bank's Journey: From $40B to $45B Valuation Amid Regulatory Success Exciting times for Revolut! The fintech giant has successfully secured a UK banking license, unlocking new growth potential and pushing its valuation from $40 billion to an impressive $45 billion. This milestone, detailed by the Financial Times, positions Revolut as a strong competitor against traditional banks and opens doors for international expansion. The new license, despite some initial restrictions, is set to enhance Revolut's offerings, attract more deposits, and drive customer growth. Having house mortgages and other traditional banking services available directly on your device could drastically impact customer pool migration from traditional banks in the UK and continental Europe where Revolut is operating. Will the general public trust more an AI-powered load advisor and automated processing of their file, or spend days waiting for a human response at brick-and-mortar banks? I think the general public sentiment lifted the Revolut valuation with another $5Billions, just in the last month. Read more: Financial Times:

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E138: Tesla to invest $5B in xAI?, OpenAI launches SearchGPT, Wiz walks away from $23B Google deal, Klarna replacing 70 employees per month with AI, Revolut's $45B valuation surge, Cohere's $5.5B valuation boost, Goldman’s pre-IPO investment, Neuralink tender? | AG Dillon & Co Pre-IPO Stock Research – Jul 26, 2024 Weekly pre-IPO reports… - Valuations, revenue multiples, performance = www.agdillon.com/reports - Market update pdf = www.agdillon.com/update - Index fact sheet = www.agdillon.com/index 00:07 | Wiz walks away from $23B Google deal - Cloud security company - Opted for IPO over $23B Google deal - Influenced by antitrust concerns - Aims for $1B annual revenue; reached $350M last year - 40% of Fortune 100 clients - Valuation $13.1B (+9.1% vs May 2024) - 37x revenue multiple; Google deal 65x - Potential $20B IPO at 20x revenue 01:34 | Revolut's $45B valuation surge - UK online bank - Nearing $500M employee share sale - Valuation up to $45B (previously $40B) - Investors: Coatue Management, Tiger Global - $429M net income in 2023, forecast $976M in 2024 - Revenue: $2.2B in 2023, projected $3.7B in 2024 - 20M customers (March 2024) - Aiming for $9.3B revenue by 2026 - 17x revenue multiple 02:32 | Revolut secures UK banking license 03:22 | OpenAI launches SearchGPT - AI large language model company - Launching SearchGPT search engine - Summarizes info, cites sources like WSJ - Follow-up questions, linked sources - Sidebar for more results - Data: reputable news sources; e.g. News Corp, Axel Springer - Valuation $103B (+20% vs Apr 2024) 04:04 | Cohere's $5.5B valuation boost 05:17 | Goldman’s pre-IPO investment - Goldman leading $540M investment in NEA's continuation vehicle - Includes stakes in 11 companies: 38% Databricks, 10% Plaid - Provides liquidity to NEA's partners - Investors: Industry Ventures, Pathway Capital, Goanna Capital - Priced at 19% discount to NEA valuations; Databricks at $46b, Plaid at $8 … I have Databricks at $44b and Plaid at $4.8b ... Goldman overpaid? - Highlights venture capital innovation 07:23 | Neuralink tender? 08:10 | Tesla to invest $5B in xAI? - AI large language model business by Elon Musk - Polled users on Tesla investing $5B in xAI - Raised $6B, valuation $24B post-money - X rumored to have 25% ownership - Valuation $26.1B (+8.6% vs May 2024) 08:54 | Klarna replacing 70 employees per month with AI - Consumer lender and payments company - AI enhances efficiency across operations - AI-driven customer service cut backlog from 30 days to zero - Saved $40M; reduced 700 outsourced personnel - AI handles 80% of marketing copywriting - Headcount down from 4500 to 3700 - Increased cost per employee; higher salaries, more equity - Valuation $10.7B (+60% vs Jul 2022) 11:27 | Pre-IPO Stock Market Weekly Performance - www.agdillon.com/reports for full pdf 12:09 | Pre-IPO Stock Vintage Index Weekly Performance - www.agdillon.com/index for pdf with constituent level performance by year

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Revolut is now more valuable than many of the big banks in Europe. It is just 9 years old and operates only via an app - no offices. That is a clear sign that no business can be unchallenged in the digital economy. It is also a lesson as when startups see opportunities many people question how tiny companies can challenge big incumbents. But such challenges succeed all the time. Isn’t OpenAI putting Google on defensive? At Storied Data we challenge the entire content creation and distribution paradigm. Why do we need multiple tools to create different types of content - documents, presentations, reports, brochures, etc.? Why do we need multiple file formats when the web is the only medium for information distribution? Why do we make a differnce between a document and an app? The more change, the better. https://lnkd.in/eg3GkX9X

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Is Revolut a 5x better business than Wise? Both UK fintechs made net profits of c.$450m last year but Wise's share price fell under £7 today -30% in 3 years and its market capitalisation is $9bn versus Revolut's recent valuation of $45bn. Revolut is a better, faster growing, more diversified biz with optionality from its UK banking license but is it 5x better? Wise and Revolut have similarities: - Revenues excluding interest income of £1,052m for Wise vs £1,210m for Revolut. - Geography - Both Wise and Revolut generate only 30% of revs excl. interest income from the UK. - Gross interest income of £485m for Wise and £500m for Revolut. 25% of this interest is passed back to customers by Wise but only 8% for Revolut. Wise and Revolut have differences: - Revolut has more product diversification and arguably a deeper moat with less reliance on cross-border FX and more revenues from cards, interchange and subscription fees. That said, how high PE is Revolut's crypto trading revenues and Wise makes 25% of its revenues outside of FX in areas like cards. - Revolut is faster growing. Last year Revolut's revenues excluding interest income were up 50% while Wise only grew at just under half this pace. - Revolut has a lot of heavy lifting to do on compliance with the UK Ombudsman saying it got more fraud complaints than any other UK bank. Conclusion: Both Revolut and Wise are fantastic businesses with visionary leaders. Revolut's valuation is a private fund-raising round, which may have all sorts of preferential terms and Tiger Global has a colourful track record of big hits and big flops. Revolut has optionality with its banking license as Marc Rubinstein quantified a few weeks ago and better growth but this valuation difference illustrates the challenge we face in the UK. Lots of white papers, listing regime rule changes have occurred but should the UK lower CGT on newer companies coming to market rather than raise it as it as is rumoured? The only sector of local brands, which can change the makeup of the FTSE100 into a higher growth index is fintech. Let's be clear Nik Storonsky will not go first - why should he? The UK needs to IPO Monzo, Starling, OakNorth and re-rate Wise. Perhaps even a Checkout IPO before Revolut would bite... The good news for the UK is we have time: - Revolut is highly profitable, - Storonsky is taking a couple of hundred million dollars out at a high valuation and shouldn't be a rush, - Revolut is a strong brand in the UK, Ireland + Continental Europe but it will take time for them to try to crack the super competitive US market. If they succeed big it's "Hasta la vista, baby" but if not the valuation is unlikely to exceed $45bn in an IPO and London needs to ready to pounce - a trailing PE of 20x on Wise is not a great advert for UK fintech. If you like this post subscribe to my substack link in comments below… #fintech #stocks #banks

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🚨 Just in: Revolut has secured its investment firm license in the UK. This will allow it to launch products that were not available to UK users. Revolut's 650,000+ UK-based trading users can buy UK and EU-listed stocks and ETFs. I think this is interesting for three reasons. 1. Revolut is consistently getting UK licenses - a sign of maturity. 2. That user number probably puts them in the top 10 trading apps in the UK. 3. Revolut is mastering cross-sell and being the everything app for finance. 🧠 Revolut's long wait for a UK banking license finally thawed; now it's an investment firm. - Revolut was recently granted a UK banking license with restrictions by the Prudential Regulation Authority (PRA) - It's a huge narrative shift and a sign of maturity in the "Digital Challengers" who were once considered "innovative but bad at compliance" - That's no longer true 🧠 Revolut is a major trading app vs Robinhood, HL and Freetrade. - Freetrade is the "Robinhood for the UK" and has 1.4m registered users - Hargreaves Lansdown (HL) "eTrade for the UK" has 1.9m active users - Robinhood hasn't announced yet but is acquiring aggressively 🧠 Revolut is mastering cross-sell and revenue diversification. - Revolut with 10m users, and assume 50% active, has a lot of headroom to grow if they can cross sell deeper than 15% of its user base. - Revolut was also a pioneer of the premium account. Its subscription includes access to the FT and WeWork. Users love it. - Revolut was also one of the first to launch eSIM's. - As every bank tries to figure out the future of cross-sell and packaged accounts, Revolut is THE case study.

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With the recent Annual Report 2023 of Monzo Bank and Starling Bank and the financials 2023 disclosed in recent interviews by Revolut management, I started to prepare the 2024 edition of the UK Fintech Top 50 Private Companies Report. The picture emerging is the increasing dominance of Monzo Bank, Revolut and Starling in the sector, with the 3 players representing around 50% of the total revenues of the sector (total revenues of the top 50 companies: £5.9bn). The top 10 fintech companies by revenues are also enjoying a strong profitability, with an average EBITDA margin of 17%, and OakNorth being the best practice with an impressive 64% EBITDA Margin. With the exclusion of Checkout, all the top 10 companies by revenues are now profitable. The increase in profitability is related to the scale reached by the big players, with an average revenues growth rate 2023 vs 2022 of 51% (Monzo Bank and Ebury best practice with a growth rate of 119% and 85%). Initial preview of the performance of top 10 players attached, with the full report coming soon.

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It took Revolut just 9 years to transform from a FinTech startup to High Street Retail Bank. Last month, Revolut finally after 3 years secured its British Banking License. But the three-year wait was not easy. Revolut had to negotiate with Softbank for months to eliminate preference shares - a pre-requisite for a UK Bank License. It had to appoint a dedicated UK CEO to strengthen governance. All this, despite securing EU Banking License from ECB in 2021. Finally, after 9 years, Revolut is a High Street Bank in its core markets (UK and EU). But Revolut isn't stopping here. It has already laid its eyes on India - the largest emerging FinTech ecosystem. Earlier this year, Revolut received in-principle approval from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPI). This approval builds upon Revolut India’s existing licences for issuing multi-currency forex cards as well as for cross-border remittance services. Since Nik and Vlad launched Revolut in 2015, it has onboarded 45M users and has scaled to $2.3bn in revenue with ~$560M in profits. And they're just getting started. Revolut is currently valued at $40B and could possibly IPO at $100B+. Massive outcome for early investors Index and Balderton (I have worked at companies funded by them).

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Revolut's recent foray into the bond market, introduced just 3 days ago, provides an interesting point of comparison with our offerings at Digital Bonds AI. While Revolut enters this space as a traditional financial intermediary, selling bonds in a conventional manner and focusing on large-scale issuances, our approach diverges significantly. At Digital Bonds AI, we offer digital bonds issued and exchanged on blockchain technology, eliminating the need for intermediary institutions. This not only reduces costs but also enhances accessibility for users. Moreover, our platform supports new bond issuances, in contrast to Revolut's model, which primarily involves the sale of existing bonds. A key advantage of Revolut's entry into this market, from our perspective, is their accurate identification of customer needs. Despite offering cryptocurrencies, which typically entail higher returns but also greater risks, Revolut has wisely included bonds in their portfolio—an asset class known for its lower risk and more stable returns. We concur that a diversified portfolio is essential for investors, balancing higher-risk assets with safer investments to mitigate overall portfolio risk. As the current surge in cryptocurrency markets inevitably gives way to substantial downturns, as history has shown with declines exceeding 90%, our blockchain-based bond solutions will become even more attractive. Forward-thinking investors can secure their portfolios now with our innovative offerings, ensuring stability amid market volatility. We invite potential business partners and investors to explore the benefits of collaborating with Digital Bonds AI. Our cutting-edge technology, cost efficiency, and user-centric approach position us as a compelling choice in the evolving financial landscape.

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BaaS platform Solid settled its dispute with its Series B investor FTV Capital, agreeing to buy back it shares -- at a 56% discount: FTV originally sought to clawback its $61 million investment, made near the peak of the fintech bubble, by alleging Solid fraudulently inflated its revenue numbers. Solid insists FTV did due diligence and knew what it was getting before it invested, and resorted to making allegations of fraud for what was, essentially, buyer's remorse. The two settled the matter earlier this month, with Solid buying back its shares from FTV, though at a steep discount. However, the settlement does include a hint that more trouble may be coming for Solid in the future. Full story in Sunday's Fintech Business Weekly through the link in the comments below. #fintech #fintechnews #baas

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