New York threatens London’s fintech dominance, says Revolut UK chief
London is at risk of losing its supremacy in the fintech sector to New York, the UK chief executive of Revolut has warned.
Francesca Carlesi said on April 15 that the prospect of losing talent to the US was the “biggest threat” for Britain’s fintech sector, which has been hit by a drop-off in investment in recent years.
Speaking at London’s Innovate Finance Global Summit, Ms Carlesi said: “Right now there is a bit of a risk posed by New York. It’s not just about listing, it’s about talent.
“New York is probably the only other city in the world with the same concentration of human capital in financial services. So that’s where I see the biggest threat.”
Her comments came as a Revolut shareholder increased its stake in the business by 45pc, in a sign that investors are regaining confidence in the fintech sector.
Schroders Capital Innovation Trust revealed in its 2023 annual report that it now values its stake in Revolut at £7.8m, up from £5.4m in 2022.
The write-up implies that Revolut has an overall valuation of roughly $25.7bn (£20.7bn), up from $17.7bn a year earlier.
That figure remains lower than Revolut’s $33bn valuation in 2021, which was achieved after it raised $800m from backers such as SoftBank.
Revolut declined to comment on the valuation.
However, the markup does signal a turnaround in a sector that has been hit by falling valuations in recent years.
In 2022, buy-now-pay-later business Klarna suffered an 85pc cut to its valuation from $45bn to $6.7bn.
Stripe, the online payments company, also saw its valuation plunge to $50bn in 2023, down from $95bn two years earlier.
Venture capital investment into the fintech sector fell by 42pc in 2023 to $35.5bn, according to analysis by S&P. This was down from a high of $91bn in 2021.
This led to start-ups conducting mass layoffs.
However, Schroders said it was “cautiously optimistic” about “improving market conditions” across its portfolio of high-growth investments, such as Revolut.
Schroders said Revolut had reported “solid progress” in 2023 and “continued its rapid international expansion” with customer numbers increasing to 35 million.
It said Revolut expected to achieve revenues of $2bn in 2023, up 80pc on the previous year.
