New York threatens London's fintech dominance, says Revolut UK boss

Revolut's Francesca Carlesi says the prospect of losing talent in the US is the “biggest threat”; for UK fintech

London risks losing its supremacy in the fintech sector to New York, the chief executive of UK firm Revolut has warned.

Francesca Carlesi said on April 15 that the prospect of losing talent to the US was “the biggest ever threat” to the UK's fintech sector, which has suffered from falling investment in recent years.

Speaking at London's Global Innovative Finance Summit, Ms Carlesi said: “There is some risk now coming from New York . It's not just about listing, it's about talent.

“New York is probably the only city in the world with a similar concentration of human capital in financial services. That's where I see the biggest threat.”

Her comments come after shareholder Revolut increased its stake in the business by 45%, a sign that investors are regaining confidence in the fintech sector.

Schroders Capital Innovation Trust said in its 2023 annual report that it now values ​​its stake in Revolut at £7.8 million, up from £5.4 million in 2022.

The description suggests that Revolut's Total Valuation is approximately $25.7 billion (£20.7 billion), up from $17.7 billion a year earlier.

The figure remains lower than Revolut's $33 billion 2021 valuation, which was achieved after the company raised $800 million from backers such as SoftBank.

Revolut declined to comment on the valuation.

However, the premium signals a turnaround in a sector that has been hit by falling prices in recent years.

Buy now, pay later company Klarna has lost 85% of its value from $45 in 2022. billion to $6.7 billion.

The valuation of online payments company Stripe also fell to $50 billion in 2023, from $95 billion two years earlier.

Venture investment in the financial technology sector fell by 42%. in 2023 to $35.5 billion, according to S&P analysis. This is down from $91 billion in 2021.

This has led to massive layoffs at startups.

However, Schroeders said he is “cautiously optimistic” about the “improving market.” conditions” across its portfolio of high-growth investments such as Revolut.

Schroeders said Revolut reported “significant progress” in 2023 and “continued its rapid international expansion”, increasing the number of customers to 35 million.

The report said Revolut expects to achieve revenue of $2 billion in 2023, up 80% from the previous year.