Fintech

Revolut engineers who received £80,000 bonuses in 2019 now sit on £600,000+

Published

10 months ago

25 June, 2024

Revolut engineers who received £80,000 bonuses in 2019 now sit on £600,000+

If you are a software engineer or anyone else considering working for a start-up fintech or a large bank, the riches that have flowed and should flow again shortly to the employees Revolution it might push you towards a fintech. Even mid-table Revolution people benefited enormously from working there.

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“Revolut has changed a lot of people’s lives,” says one employee who left the company a few years ago after working at Revolut for five years. “It allowed me to buy a house in London outright. My reality is completely different because of the time I worked there.”

Obviously Revolut doesn’t any fintech. It is Europe’s leading fintech unicorn and is targeting a $40 billion valuation in an upcoming share sale, which would make it Europe’s most valuable start-up. A former Revolut product manager describes it as “the UK version of Paypal or Amazon in terms of technology focus, work culture and follow-up opportunities”. It’s not an easy employer: “it’s one of the most challenging start-ups to work for,” he adds.

Revolut declined to comment for this article, but by the reckoning of several former employees we spoke to, there are “hundreds” of paper millionaires at Revolut waiting to cash out, as well as 20 or 30 people sitting on £8m or £15m. million pounds. and a small group of early-stage employees sitting on hundreds of millions.

The latter group includes Revolut founder Nik Storonsky. It is also thought to include key people like Edward Cooper, who joined in 2015 as head of mobile and now runs the cryptocurrency effort, as well as people like Michael Sherwood, the table tennis-playing former Goldman Sachs boss in London who joined Revolut’s board in 2020. People on £8m to £10m include vice-chairmen at Revolut and partners who worked there or started working there before 2019. Paper millionaires include other employees who were there five years ago or more.

Many of those on the verge of becoming rich through Revolut are in their 20s and 30s. There are a lot of people in the product, says an insider. There are also many software engineers. As Revolut’s valuation has risen, even relatively small amounts of shares paid out as bonuses in the past have increased significantly in value. “I know a 2019 senior engineer who received an £80,000 share bonus who is now worth over £600,000,” says one insider. In 2019, Revolut was valued at $5.5 billion. If the price of $40 billion were reached, it would be a more than sevenfold increase in value.

Some insiders suggest the gains are even more dramatic because Revolut used to subsidize the shares it offered to employees. The next share sale aims to hit a price of $441 per share, an insider says. Six years ago, Revolut reportedly granted shares to some employees at a price of just £10 with a vesting period of four years. There are unconfirmed stories of former mid-level engineers buying large homes in the most desirable areas of west London and then moving to Dubai.

One of those believed to be in the category of employees with hundreds of millions in Revolut shares is Alan Chang, the 30-year-old who joined Revolut at the age of 21 in 2015 and became chief revenue officer. Chang left in March 2022 after selling shares in the 2021 fundraising and now runs an energy start-up. He did not respond to requests for comment for this article.

Revolut insiders say the company has been generous in allowing both current and former employees to cash out when it sells shares. In 2021, they say former employees were limited to selling 10% of their holdings, while former employees could sell 20%. In the next cash raise it is rumored that only existing employees will be able to sell. Some former employees tell us they are saddened by this. The lucrative growth shares, issued to selected employees in 2021, appear to be excluded from the sale.

Even if he could sell, a former Revolut employee says he will hold on to his Revolut shares. “In my opinion it is very likely that Revolut has further growth potential of at least 3x over the next five years,” he tells us. The key to unlocking this growth is obtaining a UK banking license, which he says depends on Revolut improving its financial reporting. “They have invested enormously in improving these systems over the past few years and I expect they will see the full benefit of this work in the next year or two,” he says. Although Revolut CFO Victor Stinga appears relatively young, he says Stinga is highly capable and “very trusted” by Storonsky. “The problems Revolut faces with its financial audit are not related to the expertise of senior financial professionals, but are almost entirely technical,” he adds. “It’s a pain inherited from exponential growth and increasing complexity, and financial systems are catching up. The most experienced CFOs don’t have anywhere near enough technical knowledge and experience.”

If Revolut’s valuation increased another three to five times, employees could become even richer. The company plans to increase headcount by 40% this year. Finding work there is not easy: 500 people apply for each of them.

However, the days of truly making huge money from Revolut share bonuses may be over. Insiders say the shares are no longer offered to employees at the same generous discounts available five years ago. “There was a real golden window of opportunity at Revolut from 2017 to 2022/3,” says the former product manager. “Now the growth opportunity is not the same.”

Even if you don’t make millions from your time at Revolut, working there can transform yours CV. “Revolut has a brand that gave me access to job opportunities I never imagined,” reflects one former employee. However, don’t expect your time at Revolut to be easy. “Everyone there is a certain type of person,” says another former employee. “- They are bankers, not technicians.”

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Fintech

US Agencies Request Information on Bank-Fintech Dealings

Published

9 months ago

30 July, 2024

FinCrypt Staff

Federal banking regulators have issued a statement reminding banks of the potential risks associated with third-party arrangements to provide bank deposit products and services.

The agencies support responsible innovation and banks that engage in these arrangements in a safe and fair manner and in compliance with applicable law. While these arrangements may offer benefits, supervisory experience has identified a number of safety and soundness, compliance, and consumer concerns with the management of these arrangements. The statement details potential risks and provides examples of effective risk management practices for these arrangements. Additionally, the statement reminds banks of existing legal requirements, guidance, and related resources and provides insights that the agencies have gained through their oversight. The statement does not establish new supervisory expectations.

Separately, the agencies requested additional information on a broad range of arrangements between banks and fintechs, including for deposit, payment, and lending products and services. The agencies are seeking input on the nature and implications of arrangements between banks and fintechs and effective risk management practices.

The agencies are considering whether to take additional steps to ensure that banks effectively manage the risks associated with these different types of arrangements.

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Fintech

What changes in financial regulation have impacted the development of financial technology?

Published

9 months ago

30 July, 2024

FinCrypt Staff

Exploring the complex landscape of global financial regulation, we gather insights from leading fintech leaders, including CEOs and finance experts. From the game-changing impact of PSD2 to the significant role of GDPR in data security, explore the four key regulatory changes that have reshaped fintech development, answering the question: “What changes in financial regulation have impacted fintech development?”

PSD2 revolutionizes access to financial technology
GDPR Improves Fintech Data Privacy
Regulatory Sandboxes Drive Fintech Innovation
GDPR Impacts Fintech Data Security

PSD2 revolutionizes access to financial technology

When it comes to regulatory impact on fintech development, nothing comes close to PSD2. This EU regulation has created a new level playing field for market players of all sizes, from fintech startups to established banks. It has had a ripple effect on other markets around the world, inspiring similar regulatory frameworks and driving global innovation in fintech.

The Payment Services Directive (PSD2), the EU law in force since 2018, has revolutionized the fintech industry by requiring banks to provide third-party payment providers (TPPs) with access to payment services and customer account information via open APIs. This has democratized access to financial data, fostering the development of personalized financial instruments and seamless payment solutions. Advanced security measures such as Strong Customer Authentication (SCA) have increased consumer trust, pushing both fintech companies and traditional banks to innovate and collaborate more effectively, resulting in a dynamic and consumer-friendly financial ecosystem.

The impact of PSD2 has extended beyond the EU, inspiring similar regulations around the world. Countries such as the UK, Australia and Canada have launched their own open banking initiatives, spurred by the benefits seen in the EU. PSD2 has highlighted the benefits of open banking, also prompting US financial institutions and fintech companies to explore similar initiatives voluntarily.

This has led to a global wave of fintech innovation, with financial institutions and fintech companies offering more integrated, personalized and secure services. The EU’s leadership in open banking through PSD2 has set a global standard, promoting regulatory harmonization and fostering an interconnected and innovative global financial ecosystem.

Looking ahead, the EU’s PSD3 proposals and Financial Data Access (FIDA) regulations promise to further advance open banking. PSD3 aims to refine and build on PSD2, with a focus on improving transaction security, fraud prevention, and integration between banks and TPPs. FIDA will expand data sharing beyond payment accounts to include areas such as insurance and investments, paving the way for more comprehensive financial products and services.

These developments are set to further enhance connectivity, efficiency and innovation in financial services, cementing open banking as a key component of the global financial infrastructure.

Sebastian Malczyk

General Manager, Technology and Product Consultant Fintech, Insurtech, Miquido

GDPR Improves Fintech Data Privacy

Privacy and data protection have been taken to another level by the General Data Protection Regulation (GDPR), forcing fintech companies to tighten their data management. In compliance with the GDPR, organizations must ensure that personal data is processed fairly, transparently, and securely.

This has led to increased innovation in fintech towards technologies such as encryption and anonymization for data protection. GDPR was described as a top priority in the data protection strategies of 92% of US-based companies surveyed by PwC.

Arid Islam

Financial Expert, Sterlinx Global

Regulatory Sandboxes Drive Fintech Innovation

Since the UK’s Financial Conduct Authority (FCA) pioneered sandbox regulatory frameworks in 2016 to enable fintech startups to explore new products and services, similar frameworks have been introduced in other countries.

This has reduced the “crippling effect on innovation” caused by a “one size fits all” regulatory approach, which would also require machines to be built to complete regulatory compliance before any testing. Successful applications within sandboxes give regulators the confidence to move forward and address gaps in laws, regulations, or supervisory approaches. This has led to widespread adoption of new technologies and business models and helped channel private sector dynamism, while keeping consumers protected and imposing appropriate regulatory requirements.

George Blandford

Co-founder, UK Linkology

GDPR Impacts Fintech Data Security

A big change in financial regulations that has had a real impact on fintech is the 2018 EU General Data Protection Regulation (GDPR). I have seen how GDPR has pushed us to focus more on user privacy and data security.

GDPR means we have to handle personal data much more carefully. At Leverage, we have had to step up our game to meet these new rules. We have improved our data encryption and started doing regular security audits. It was a little tricky at first, but it has made our systems much more secure.

For example, we’ve added features that give users more control over their data, like simple consent tools and clear privacy notices. These changes have helped us comply with GDPR and made our customers feel more confident in how we handle their information.

I believe that GDPR has made fintech companies, including us at Leverage, more transparent and secure. It has helped build trust with our users, showing them that we take data protection seriously.

Dr. Rhett Stubbendeck

CEO & Co-Founder, Leverage Planning

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Fintech

M2P Fintech About to Raise $80M

Published

9 months ago

30 July, 2024

FinCrypt Staff

Application Programming Interface (API) Infrastructure Platform M2P Financial Technology has reached the final round to raise $80 million, at a valuation of $900 million.

Specifically, M2P Fintech, formerly known as Yap, is closing a new funding round involving new and existing investors, according to entrackr.com. The India-based company, which last raised funding two and a half years ago, previously secured $56 million in a round led by Insight Partners, earning a post-money valuation of $650 million.

A source indicated that M2P Fintech is ready to raise $80 million in this new funding round, led by a new investor. Existing backers, including Insight Partners, are also expected to participate. The new funding is expected to go toward enhancing the company’s technology infrastructure and driving growth in domestic and international markets.

What does M2P Fintech do?

M2P Fintech’s API platform enables businesses to provide branded financial services through partnerships with fintech companies while maintaining regulatory compliance. In addition to its operations in India, the company is active in Nepal, UAE, Australia, New Zealand, Philippines, Bahrain, Egypt, and many other countries.

Another source revealed that M2P Fintech’s valuation in this funding round is expected to be between USD 880 million and USD 900 million (post-money). The company has reportedly received a term sheet and the deal is expected to be publicly announced soon. The Tiger Global-backed company has acquired six companies to date, including Goals101, Syntizen, and BSG ITSOFT, to enhance its service offerings.

According to TheKredible, Beenext is the company’s largest shareholder with over 13% ownership, while the co-founders collectively own 34% of the company. Although M2P Fintech has yet to release its FY24 financials, it has reported a significant increase in operating revenue. However, this growth has also been accompanied by a substantial increase in losses.

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Fintech

Scottish financial technology firm Aveni secures £11m to expand AI offering

Published

9 months ago

30 July, 2024

FinCrypt Staff

Aveni, Investment Management, AI, NLP, UK

By Gloria Methri

Today

To come
Aveni Assistance
Aveni Detection

Artificial intelligence Financial Technology Aveni has announced one of the largest Series A investments in a Scottish company this year, amounting to £11 million. The investment is led by Puma Private Equity with participation from Par Equity, Lloyds Banking Group and Nationwide.

Aveni combines AI expertise with extensive financial services experience to create large language models (LLMs) and AI products designed specifically for the financial services industry. It is trusted by some of the UK’s leading financial services firms. It has seen significant business growth over the past two years through its conformity and productivity solutions, Aveni Detect and Aveni Assist.

This investment will enable Aveni to build on the success of its existing products, further consolidate its presence in the sector and introduce advanced technologies through FinLLM, a large-scale language model specifically for financial services.

FinLLM is being developed in partnership with new investors Lloyds Banking Group and Nationwide. It is a large, industry-aligned language model that aims to set the standard for transparent, responsible and ethical adoption of generative AI in UK financial services.

Following the investment, the team developing the FinLLM will be based at the Edinburgh Futures Institute, in a state-of-the-art facility.

Joseph Twigg, CEO of Aveniexplained, “The financial services industry doesn’t need AI models that can quote Shakespeare; it needs AI models that deliver transparency, trust, and most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, and reviewed by financial services experts for specific financial services use cases. Generative AI is the most significant technological evolution of our generation, and we are in the early stages of adoption. This represents a significant opportunity for Aveni and our partners. The goal with FinLLM is to set a new standard for the controlled, responsible, and ethical adoption of generative AI, outperforming all other generic models in our select financial services use cases.”