The David Rubenstein Show
00:12:17 · David Rubenstein, Nik Storonsky
[00:12:17] S0: They've had their problems too. Actually, did you leave Credit Suisse before they had their problems? [00:12:23] S1: Yeah, of course I left Credit Suisse twenty thirteen. So basically as soon as I got my British passport I resigned, and then when I came to UK. It was never a kind of objective to stay there more than two years. I always wanted to start my own business. But then I know, I said one year, then the second year, and the third year, and then after year six, when I got my passport, I decided to resign and then start my own business. [00:12:51] S0: Okay, you started your business in twenty fifteen. [00:12:55] S1: So I started working in twenty thirteen and I launched it twenty fifteen. [00:12:58] S0: Did you have any capital to help you start the company? [00:13:01] S1: I have my own savings, yes, right, so you. [00:13:03] S0: Put in some of your own money, but you presumably weren't a multi billionaire, so you didn't put in that much money, right, I. [00:13:09] S1: Mean back then I put probably about or half a million dollars half a million overall. But obviously I also didn't work for two years myself, so if you don't count my salary, I didn't have any salary. So to build something back then was my ship I compared to you nowadays, you have. [00:13:24] S0: A venture capital arm I it's called Quantum Light.
00:13:24 · David Rubenstein, Nik Storonsky
[00:13:24] S0: A venture capital arm I it's called Quantum Light. [00:13:29] S1: So it's a separate business. CE think it was three years ago as entrepreneur. I've done a lot of fundraising rounds with the vcs, and then I think at a certain point of time. I was very pissed off with the crowd thinking mentality right. So I had cases when termships were withdrawn, sign termshets, I had cases when a round was mucked down because I spro was down. So I had quite a lot of negative experience with the vcs. And then as a founder, I also wanted to invest my own money and I thought I can create something better in terms of investment. I think that has to be a scientific approach rather than human judgment. And then we build effective models that invest in startups Series B based on millions and millions data points on our startups, so they are trained machine learning models that invest plus. On top of it, I'm able to share with these statups my perisional knowledge. As a fund of revlut Plus, we help our startups to distribute their product for Revolut or to sell into Revolut, So we're all it's much better value proposition to funders compared to VC. [00:14:41] S0: What would you call you what you're doing angel investing or around A or we. [00:14:46] S1: Do serious B. We started we just launched a fund for serious LYS. [00:14:51] S0: What did you raise money for it? I assume people gave you all the money you wanted, but did you just use your own money and your friends money? Did you have to go out and raise money?
00:14:51 · David Rubenstein, Nik Storonsky
[00:14:51] S0: What did you raise money for it? I assume people gave you all the money you wanted, but did you just use your own money and your friends money? Did you have to go out and raise money? [00:14:58] S1: First fund was two hundred and fifty million, so I put around twenty five percent of my own money under. The rest was external LPCE and. [00:15:06] S0: What types of rates of return do you think you can get in that fund? [00:15:10] S1: So basically, when I had this idea, when we build a model and then we started back testing the model, it produces effectively forty to fifty percent a year on the year returns, long term returns. So when we started investing based on the model, I think now we are called top four or five percent of the funds the world in terms of returns. So it's usually thirty to forty returns. [00:15:35] S0: So you ever use your credit card and it gets turned down. In other words, you got to use a credit card at a restaurant or somewhere and they say your credits tonight? Is whatever happened to you? [00:15:45] S1: Initially? Yes, yeah, but it was more than a eight nine years ago when service wasn't that stable. Now we just don't have declines. [00:15:53] S0: But now that happened to you, did you tell people who you were? You didn't say, look, I'm the founder of the company. [00:15:58] S1: And was just coding engineers and trying to find out what happened. YI is declined. [00:16:03] S0: How many customers a rebel doold have? Now? [00:16:06] S1: So have seventy five million customers.
00:16:06 · Nik Storonsky, David Rubenstein
[00:16:06] S1: So have seventy five million customers. [00:16:09] S0: How big do you think you can take it? Do you think you can take it to one hundred million customers or more? [00:16:13] S1: Yeah, we can definitely take it to a hundred million customers. Our internal target is one hundred million daily active customers, and then one hundred million daily active customers will transfer about three hundred million monthly actives. [00:16:25] S0: It's said that companies, if they're really going to survive and prosper for over many period years at the time, they have to have a good culture. What is the culture you're trying to build in your company? [00:16:36] S1: So we have these five cultural values pretty well defined, starting with never settle, so never settlers, about being ambitious and setting up for big goals. Secondly, it's about dream team, so we prefer to work in a small team of extremely high intelligent people rather than in the lash teams for average people. Or third one is get things done. It's very important to be kind of you know, getting things done oriented. Then we have a cultural principle called deliverable. It's about almost perfection in everything what we do in terms of product. [00:17:15] S0: I suppose I say I have an account at a famous British bank, but I'm not happy with it, and I feel secure because I know they got all these buildings there and it seems like they have a lot of money behind them. You don't have any physical place for me to go right exactly.
00:17:15 · David Rubenstein, Nik Storonsky
[00:17:15] S0: I suppose I say I have an account at a famous British bank, but I'm not happy with it, and I feel secure because I know they got all these buildings there and it seems like they have a lot of money behind them. You don't have any physical place for me to go right exactly. [00:17:32] S1: So we are solving this trust issue through different methods. For example, yes, absolutely correct, it's important for people visually see a big building of massive columns and then feel as you know, there's in a lot of money behind the building. So we do differently as we build trust and reputation through brand. So for example, if you look at European airports, so majority of European airports we advertise on affectedly buy the whole airport and then advertise on the whole airport, on the bridge just and so on. So we would build a brand through a lot of advertising rather than having these massive buildings. [00:18:07] S0: Banks we're in the business hundreds of years ago principally to do two things. One have a place where people can park their money and also to borrow money. You borrow money from banks can I borrow money from you, it can borrow money for loss, right, So where do you get the money? [00:18:24] S1: Balance it right? [00:18:25] S0: The reason people like dealing with you rather than the big conventional bank is that you're less expensive. [00:18:31] S1: So well, not only saving the money, we're also saving that time everything is automated.
00:18:31 · Nik Storonsky, David Rubenstein
[00:18:31] S1: So well, not only saving the money, we're also saving that time everything is automated. [00:18:36] S0: If you look at the future of the financial service world, do you think that there's a future for large banks to keep having these big buildings or do you think ultimately five or ten or fifteen years from now, everybody's going to be online with everything in five times? [00:18:50] S1: Yes, then we'll see one and more consolidation and thing. We'll see more and more certain digital champions and the regions taking one and more banking shs regions. So maybe it will take ten years, maybe it'll take fifteen years, twenty years. But I do think that we'll see less and less legacy banks, or less and less legacy banks will make so much money. [00:19:14] S0: So are you enjoying doing all this? Are you enjoy running the bank, running the adventure fund and doing interviews with people like me? Are you having a good time or you're not that happy? [00:19:24] S1: I mean certain like certain things I like, certain things I don't like so I love building products. I love kind of solving problems. I don't like delays, which can be quite often in the regulatory business, because certain things can be outside of for kind of you know, your decision making and speed. [00:19:47] S0: What are the skill sets that you think are required to build a company like this and do you look for those same skill sets in the people you hire?