August 1, 2023

Does Revolut's 'founder factory' spell trouble for its long-term crypto bet?

With more departures from the crypto team, what’s at stake for Revolut’s ambitious crypto roadmap?

Kari McMahon

7 min read

Revolut cards

Crypto has been one of Revolut’s top-performing divisions, a big revenue-driver partly responsible for giving the fintech its first year in the black. Its proprietary crypto tech has also distinguished it from European rivals like Monzo and Starling. 

But the crypto team has been a revolving door of talent, and with digital asset prices and activity still soft, it’s bringing in significantly less money than before. 

With another set of departures confirmed to Sifted this week, what’s at stake for Revolut’s ambitious crypto roadmap? Sifted spoke to two individuals familiar with Revolut’s crypto operations — on the condition of anonymity — and fintech analysts about the trajectory of the division.


Turnover at Revolut’s crypto division

Since October 2019, five people have headed Revolut’s crypto efforts, three of whom — Soups Ranjan, Arthur Johanet and Jean Meyer — have left to launch crypto startups. 

The latest departure is Ruslan Fakhrutdinov, who confirmed to Sifted that he had quit as head of crypto operations and was now building his own company. Fundraising documents and sources familiar with the new venture say that he's raising funds for a self-custodial “crypto super-app” and has joined forces with Revolut crypto engineering leads Stefano Franz and Dmitrii Krasovskikh.

Revolut CEO Nik Storonsky’s right-hand man Alan Chang, who had been chief revenue officer at the fintech, left last year to found energy startup Fuse Energy (formerly known as Tesseract). Robert Sargsian, who contributed to the long-term product strategy for Revolut Crypto, founded blockchain-based payment platform Due. Other crypto startups in the works from former Revolut employees include Web3 gaming wallet Qubit, digital dollar wallet DolarApp and DeFi app Boku.

“We are proud that Revolut is considered a ‘founder factory,’” a Revolut spokesperson says, citing a recent report highlighting Revolut as a leading producer of entrepreneurs in London.

High turnover is not unusual at Revolut. There have been multiple departures from Revolut’s C-suite this year including its chief financial officer Mikko Salovaara, the CEO of Revolut NewCo UK James Radford and its chief of staff and head of UK banking products Joel Kass.

“It’s not uncommon in highly entrepreneurial companies that people join for phases of growth and some decide to move on when the time is right for them,” adds the Revolut spokesperson. “We thank them for their hard work and dedication during their time at Revolut as they all contributed to our mission to build the world’s first truly global financial super-app.”

Despite the leadership churn, one source familiar with Revolut’s crypto division is still confident about its talent. Its current head, Emil Urmanshin, has been in the post for over a year.

“Despite lots of folks having left, the core team is still very strong,” the source says, adding that crypto startups being built by former Revolut employees are more likely to work in the more nascent areas of crypto — such as decentralised finance (DeFi) and non-custodial services — rather than challenge the neobank's core trading business.

The startup has around 6,000 employees globally; the Revolut spokesperson would not disclose the size of the crypto team but says the company plans to increase its headcount by roughly 15-20% in the next six months. 

Revolut’s revenue-driver

Talent continuity is one of the challenges facing Revolut’s crypto division, but the more existential threat may be its ability to generate money. Revolut first launched crypto trading services in 2017 allowing customers to trade three tokens within the app. Slowly more tokens were introduced, then came a stream of new services from learn-and-earn courses for complete beginners to crypto collections for casual investors. 


Revolut isn’t shying away from the fact that crypto revenues will be significantly lower in 2022 as prices have languished globally. Revolut’s former CFO Mikko Salovaara told Sifted that crypto was making up around 5% to 10% of revenues, down from 2021 when it contributed around 30%. The company wouldn't disclose precise crypto revenues.

Revolut faces a tougher path than most other neobanks when it comes to offsetting crypto’s declining revenues as it doesn’t have a lending business benefitting from rising interest rates in one of its key markets, says Robert Le, crypto analyst at PitchBook. Revolut needs a UK banking licence to be able to offer lending services as well as regulator-protected deposits in the UK.

“We know last year crypto trading was down across the board and you can see that with public companies like Coinbase,” Le says. “If you want to just mirror that across with Revolut, I just don't see 2022 being a profitable year for them.”

The fintech isn’t too worried about the downturn as it views crypto as a long-term play, Revolut’s spokesperson tells Sifted.

“Due to our diverse revenue lines, we are fortunate that any downturns in the wider market do not affect us as much as other fintechs,” the spokesperson adds.

Revolut lowered its crypto trading fees recently, a move that several analysts and market participants suspect is an attempt to increase transaction volumes as revenues fall. Crypto trading volumes have picked up slightly this year, but Le suspects this activity is being driven more by institutions rather than retail, which benefits players like Binance and Coinbase that offer institutional trading services rather than Revolut, which predominantly serves retail clients and only enables businesses to invest excess corporate cash into crypto.

A crypto challenger bank

All that said, Revolut is better positioned than most to take advantage of any rebound in crypto, thanks to its much better distribution and regulatory approval than rivals. 

That comes from its positioning in Europe, where it's secured both a banking licence and crypto asset licence from European regulators in Lithuania and Cyprus respectively. It also secured a licence to operate a crypto asset business in the UK.

“I think they're very well positioned because they have the distribution,” Le says. “There’s not a lot of centralised players in Europe that have the scale that Revolut has.”

In Europe, its two primary competitors, Monzo and Starling Bank, have yet to dabble in crypto. German fintech N26 offers crypto services via a partnership with Bitpanda, but has to share revenue with Bitpanda and lacks the proprietary crypto tech that Revolut can boast.

In the US market, more fintechs offer crypto services similar to Revolut. But many of those players also don’t have the same scale — or access to such a broad customer base. Revolut has over 30m retail customers worldwide; stock trading app Robinhood, by comparison, has around 11m monthly active users.

US players must also contend with regulatory headwinds. Revolut recently delisted three tokens in the US in response to the enforcement actions against Binance and Coinbase.

Revolut also offers more lucrative crypto services than just simple trading, including staking, where individuals lock up crypto tokens for a set period of time to support the operation of a blockchain network and receive rewards in return. The neobank launched staking earlier this year, putting it ahead of simple crypto trading services. 

“If you’re staking on Ethereum, you’re getting 5% to 8% [in annual return],” Pitchbook’s Le says. “You can offer customers 3% to 4% and you can get a cut of that. So I think over the long-term, staking will be a pretty large market, there’s going to be a lot of companies going to get into that and offer that to their customers.”

However, some of Revolut’s more ambitious plans have been put on hold. It's yet to launch its non-custodial service, where users are entrusted with the wallet’s private key. And when momentum started to build around decentralised crypto services following the collapse of FTX, Revolut paused its RevCoin project and its plans to build a new product for “the future of decentralised finance and connecting it to traditional banking”, per publicly available information. Revolut did not comment on these plans. 

While many crypto startups, including those founded by former Revolut employees, are looking to build decentralised services, Revolut’s slower and steadier pace could still win out against those newer competitors.

And despite contending with a crypto bear market and Revolut’s own growing pains, from regulatory headwinds to employee turnover and its 2022 financial reporting requirements — which are due to be filed within the next two months — crypto still remains one of Revolut’s important core bets, says a source familiar with the crypto division.

“Revolut's ambition is to make our customers' lives easier in every aspect of managing their money,” says the Revolut spokesperson. “Cryptocurrency is a popular new class of asset that Revolut customers want us to offer.”

Kari McMahon

Kari McMahon is a freelance writer.