Nik Storonsky

**David Rubenstein** (0:03)
In 2015, Nik Storonsky started a small company designed to help people with their foreign currency exchanges. Today, that company is Revolut. It is the most valuable pre-IPO company in all of Europe.
I had a chance recently in Washington, DC to sit down with Nik Storonsky to talk about his amazing story, how he grew a very small company into such a giant financial behemoth. Let's talk about Revolut, because it's a company that's based in UK., focused more on Europe than the United States, and we'll get to that in a moment, but let's talk about what it does for the American audience, for example. What is Revolut? What does it actually do?

**Nik Storonsky** (0:40)
Well, Revolut is a digital bank, so we provide global banking services for people in more than 40 countries. So everything is packed into one simple app. So you can do your banking, you can do wealth management, stock trading, CFDs, bonds, crypto, you can borrow money, and you also have lifestyle service. For example, you can get yourself eSIM, or you can book a lounge, you can book a hotel, and so on. So everything is in one app for your financial services.

**David Rubenstein** (1:10)
Do you have a partner to start it with?

**Nik Storonsky** (1:12)
I actually started alone. So I built a product, I hired a team.
Then one of my first CTO that I hired, so later I made him, I think it was till 2018, I made him a co-founder as well, because it was easier for him to recruit engineers if he had title co-founder.

**David Rubenstein** (1:32)
So you start the company, and the mission you had was to enable people to do what that they couldn't do. What was your purpose in starting the company?

**Nik Storonsky** (1:42)
So I was a trader back then, and then I'm very quick in calculating numbers in my head.
And then every time when I went abroad or when I send money, I could instantly calculate, okay, I lost here $10, $50, and so on. And my initial idea was to build a product, a simple app with a card attached to it that allows you to spend money anywhere in the world at interbank rate. So saving effectively $50 to $70 in every $1,000 that you spend.

**David Rubenstein** (2:11)
In other words, you weren't trying to convert people's currency, you were letting them have a card that would enable them to buy something in whatever currency they wanted?

**Nik Storonsky** (2:19)
Yeah, so it's both, right? You can pre-exchange currency, or you can buy directly from your existing currency.

**David Rubenstein** (2:26)
Normally, throughout Europe, when you go to Europe, you see everywhere currency exchange places, and they always charge a fee. I don't remember what it is, 6%, 7%. So, you decided to start a currency exchange business without charging a fee?

**Nik Storonsky** (2:42)
You can call it currency exchange business. Yes, at the interbank rate without charging a fee. Correct.

**David Rubenstein** (2:47)
You didn't go out and build a physical bank, you did it all online, is that right?

**Nik Storonsky** (2:52)
Exactly, yeah.

**David Rubenstein** (2:52)
So, how did you get people to know about this service? Did you start advertising online?

**Nik Storonsky** (2:56)
Funny thing, we didn't spend any single marketing for the first five to seven years for being in operation. So, it was all a road of mouth.
So, I remember when I finally launched the product, it was summer 2015, and I physically was selling my product to friends, family, even people I don't know.

**David Rubenstein** (3:19)
Okay, so, if I go to London today and I say, here's $10 and I want to exchange it on a regular place, I would get back pounds minus about a 6% or 7% or 8% fee.

**Nik Storonsky** (3:32)
Correct.

**David Rubenstein** (3:32)
So, if I went on your service, what would I get back? Would I get back everything with virtual insurance, essentially no fee?

**Nik Storonsky** (3:40)
Exactly.

**David Rubenstein** (3:41)
Then you make the money, in effect, on the float, because you're getting paid by somebody, and then you kind of can invest that money, and then you don't have to pay somebody for a while. Is that how you make the money?

**Nik Storonsky** (3:52)
So every time when you spend with a card, merchant effectively pays 2 to 3 percent. But that's not the customer paying, but rather business itself. But I want to be clear, there was an initial product in 2015
Now, especially for US customers, we are fully licensed, digital bank providing all kinds of services.

**David Rubenstein** (4:13)
You have a European banking license now, is that right?