His London-based Revolut Ltd. raised the money in a round that included Balderton Capital and Ribbit Capital, according to a statement on Wednesday. Storonsky, 32, will use the funds to expand in Asia and North America, and let customers hold cryptocurrency. He also plans to gather $5 million in crowdfunding from consumers on Seedrs later this month.
Revolut, which Russian-born Storonsky founded two years ago with former Deutsche Bank AG technology developer Vlad Yatsenko, makes money from fees on ATM withdrawals and takes a cut from merchant charges on payments in shops. As early as next week, it plans to let customers hold, exchange, spend and transfer virtual currencies such as bitcoin, litecoin and ethereum for free, profiting from the price differences between buyers and sellers as opposed to charging commission.
“Adding cryptocurrencies and the ability to buy and sell them is a big step forward for a financial organization,” Storonsky, who used to trade equity derivatives, said in an interview. “Big banks are looking at us and seeing what we’re doing, for future things they want to add to their product pipeline, but they’re very slow.”
The cryptocurrency sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum are getting hit even harder.
Storonsky is among former bankers such as ex-JPMorgan Chase & Co. executive Blythe Masters and erstwhile Barclays Plc Chief Executive Officer Antony Jenkins who are taking advantage of new technology to win customers in an industry dominated by their old employers. Although most fintech firms have yet to achieve significant scale and profit, the startups as a whole are threatening to upend banks handicapped by creaky computer systems.
Revolut, which currently employs 140 people in London, Krakow and Moscow, plans to open offices in New York and Singapore and hire about 20 more staff, according to Storonsky.
The Asia and North American growth plan will come “in parallel to expanding in Europe. These are big markets, there’s huge demand for our products,” he said. “We’ve got waiting lists and now is the time to enter.”