Startup Europe — The Sifted Podcast
00:12:48 · Tom Matsuda, Amy Lewin
[00:12:48] S1: Yes. Yes. So so most big banks these days, if you look at their revenue profiles, they make most of their money from lending. Revolut is quite different in that regard because it makes most of its money from fee income to the services they provide. That could be things like interchange fees when you make card payment. It could be a fee on stock trading. That's been kind of Revolut's bread and butter so far. But if it wants to kind of continue that pace of growth, it's likely going out to have to lend and push into these more kind of grown up products like business lending and and mortgages. [00:13:22] S0: Makes a lot of sense. And what what is Revolut's big end goal? Is is Storonsky on a mission to make this the biggest bank in the world? Is it more, you know, they've moved into telecoms. Is it potentially gonna become more of a sort of a super app play going to things outside of finance? What what do you think the the road ahead looks like?
00:13:22 · Amy Lewin, Tom Matsuda
[00:13:22] S0: Makes a lot of sense. And what what is Revolut's big end goal? Is is Storonsky on a mission to make this the biggest bank in the world? Is it more, you know, they've moved into telecoms. Is it potentially gonna become more of a sort of a super app play going to things outside of finance? What what do you think the the road ahead looks like? [00:13:44] S1: I mean, it it can be both, really. I mean, it obviously started with a mission to be this financial super app. But, know, obviously, going into telecoms, it might seem quite a strange move for a neobank to make, but it's... You know, they've they've done things like this in the past. They've launched eSIM products, but you can also do things like book your holiday via Revolut. You can get insurance for your pet if you really want to. You know, what it really is is like this control center for all your financial day to day. So telecoms might seem quite out there in terms of things, but, you know, it's it's a utility bill at the end of the day, right, which is a financial product. So it it makes sense in some ways to pivot into these products that are kind of tangentially linked to financial services. [00:14:28] S0: So another question that always gets asked about Revolut is when is it going to IPO? Where might it IPO? Is it going to be London?
00:14:28 · Amy Lewin, Tom Matsuda
[00:14:28] S0: So another question that always gets asked about Revolut is when is it going to IPO? Where might it IPO? Is it going to be London? [00:14:38] S1: I think Nik has been on the record in the past about criticizing the London stock exchanges as not really the place them and has publicly in the past said that if Revolut did IPO, it would be in The US. That seems to kind of reflect a wider move among other fintechs. Recently, just just to kind of compare the fellow neobanked, Darling, despite having most of its kind of customer base in UK, has has made more indications that it's willing to... Or look in The US if it were to IPO. [00:15:08] S0: And I found that really interesting because Storling doesn't even have a presence in The US at the moment, does it? And and when you speak to people like bankers, for example, that's always a big thing they point out. You know, they say everyone in the world or every every company in the world wants to IPO in The US. There's a huge queue of companies ready to IPO in The US when the markets really really open up again, and you need to be a really big business and ideally a business with a big customer base in The US in order to successfully list there. So so what's what's going on?
00:15:08 · Amy Lewin, Tom Matsuda
[00:15:08] S0: And I found that really interesting because Storling doesn't even have a presence in The US at the moment, does it? And and when you speak to people like bankers, for example, that's always a big thing they point out. You know, they say everyone in the world or every every company in the world wants to IPO in The US. There's a huge queue of companies ready to IPO in The US when the markets really really open up again, and you need to be a really big business and ideally a business with a big customer base in The US in order to successfully list there. So so what's what's going on? [00:15:41] S1: I mean, yeah, it's absolutely true. I mean, Starling doesn't have, you know, a kind of formalized retail banking offering in The US at the moment, but they are making pushes in the region. So Starling, alongside the kind of retail banking arm and their business banking arm as well, they have a software as a service product where they essentially sell the technology behind the bank to fintechs and also mid tier sized banks as well. And then currently kind of making a targeted push to take that to The US as well and even looking at possibly applying for a... Some sort of US banking license or making an acquisition to obtain a banking license that way. [00:16:22] S0: And what about Revolut's track record in The US?
00:16:22 · Amy Lewin, Tom Matsuda
[00:16:22] S0: And what about Revolut's track record in The US? [00:16:25] S1: So, yes, they... They've applied previously for a US banking license and sort of put that on the back burner. Last I heard back in November, I believe, at Slough, Nick spoke about possibly restarting those plans. But if I'm honest, it's been very quiet on that front. [00:16:42] S0: But I guess also that the IPO, you know, then it's not like they struggle in any way to raise money or make money. [00:16:48] S1: They don't. They they can stay private if they really, really want to. That... As shown with with the funding round that they're currently raising. It's huge 1,000,000,000 funding round. And, yeah, I mean, you... We've seen big companies in The US stay stay private. There isn't really, like, a pressing need for for Revolut, it seems, at this moment, to to IPO. [00:17:07] S0: Which other companies are on your radar, Tom? [00:17:10] S1: Yes. I mean, Revolut definitely takes up a lot of my time, for sure. But, obviously, Monzo, Starling, n twenty six, and Klarna. [00:17:18] S0: And what about... Is there a is there a trend? Is there a story? Is there a phenomenon that you're interested in and looking into at the moment?
00:17:18 · Amy Lewin, Tom Matsuda
[00:17:18] S0: And what about... Is there a is there a trend? Is there a story? Is there a phenomenon that you're interested in and looking into at the moment? [00:17:25] S1: Yes. So I have been looking... I think it was maybe a couple months ago when Klarna announced that they had to reduce reliance on on AI and actually had to hire remote teams to handle the customer service division. That was really, really interesting because, obviously, Klarna's been this huge kind of proponent of AI. And then kind of stepping back from that, I see as a signal that maybe there's a limit or at least a glass ceiling to what AI can do in financial services. And that's a topic I'm exploring at the moment. [00:17:57] S0: So any tips, listeners, send them [00:17:59] S1: Yes. [00:18:00] S0: Please Tom's way. He is Tom Matsuda at Sifted dot e u. And where else can people find you and follow you, John? [00:18:06] S1: You can reach me on LinkedIn. I'm also Tom Matsuda there.