In the technology market, especially in the fintech universe, there is a race against time. As they burn cash at an accelerated rate, many companies are looking to tighten their belts to become “healthier”. Those who can’t, end up having to look for more money and a valuation smaller.
Sweden’s Klarna, for example, saw its market value plummet from US$46 billion to US$7 billion. This has cast doubt on the global advances of some fintechs. In the case of Revolut, valued at US$33 billion, with a presence in 35 countries, this does not seem to be a problem. At least for a while.
“We got lucky in timing. Revolut raised more than US$ 800 million a year ago, is prepared and generates cash”, says Glauber Mota, CEO of Revolut in Brazil and South America, to the NeoFeed. The company announced its entry into the country in March and, according to Mota, the plans were revised upwards. “To enter the market faster.”
This is because, according to the executive, fintech is already testing the product, which is at an advanced stage. “It went faster than some operations that would enter Asia,” he says. Today, Revolut, with more than 20 million customers worldwide, has 90 people dedicated to the Brazilian unit and a few more will be hired by the end of the year.
Brazil will be the 36th country to receive a Revolut operation. Currently, there is a queue with tens of thousands of people interested in opening an account. “My personal goal is to open before the Qatar World Cup (in November) and I believe we will achieve it.”
In the long term, the goal is to have between 10 million and 20 million customers in Brazil. It’s not a simple task. At Faria Lima, Revolut is even known, but in “Big Brazil” this is one of the great challenges. Even more so with the type of product you are going to offer and the competition you will find.
In the account aimed at individuals, the goal, according to Mota, is to “become a global financial reference without borders”. In addition, it will have investments in global equities, commodities and crypto. “We’re going to get really heavy on crypto. And there will be a lot of evolution.”
In this first phase, he says, the client will be able to trade with all the shares listed on the American stock exchange. “And we will enable the purchase of fractions of shares. With a dollar, you’ll be able to buy part of Apple’s stock,” he says. If there is demand, Revolut can plug in other global exchanges.
But the sea will not be as calm as you might think. Some players are already well established and others are starting to navigate this segment. Avenue, for example, created this category in Brazil and, in July, sold a 35% stake in the company to Itaú – a share that could exceed 50.1% in up to two years.
Other competitors such as Inter, which bought the American Useend; and C6 Bank, which has JPMorgan as a shareholder, also operate global accounts. In the field of investments, XP recently announced its international account, as did Genial and Warren.
In crypto, where Revolut says it bets a lot of its chips, it will rival most of these companies and even Mercado Bitcoin, Binance, Coinbase, among others.
“This market is still small and little explored in terms of competition. We will be the first real challenger and I intend to deliver a better experience”, says Mota about the international operation.
Initially, fintech will focus on banking. “Our account operates in more than 30 currencies and it is possible to change from euro to dollar, from dollar to yen in one click”, says Mota. “And no one has the experience of being a full local account and doing an instant multi-currency transfer like Revolut.”
A seasoned financial market executive, who spoke with the NeoFeed about this market on condition of anonymity, says the big question so far is how Revolut will operate. “Is it going to be another cowboy acting on the fringes of the financial system?” he asks.
“Where is the money? Within which financial system? In the United States or Malta?” he asks. And go on. “Will there be a DTVM to offer investments? Will there be an exchange brokerage here in Brazil?”.
Mota explains that the money is “distributed in all jurisdictions in which Revolut operates”. “As we have money flows in all directions and countries happening all the time, we can manage and do the settlement ‘instantly’ to the customer by debiting the source of the resource and crediting the destination in a consolidated way for all movements”, he says.
After that, he says, “the company does, in back officeyou settlements normal via Swift (or SEP in Europe)”. “For the customer it is instantaneous, but for our back office are normal flows of the financial system. Obviously all tax and regulatory filings happen normally.”
About having a broker and a DTVM, Revolut is negotiating local partnerships, but does not rule out setting up its own operations. At the same time, there is a request to obtain authorization from the Central Bank to operate as a Direct Credit Society (SCD), in order to have a local account and offer a credit card. “I believe this should happen in early 2023.”
In the second phase, with the approval of the BC, the company provides all the services of a digital bank, launching a credit card. And the creation of a corporate account aimed, above all, at small and medium-sized companies that – according to Mota, are “underserved in the international market”.
Through the account, called Revolut Business, the client will have access to an ERP system that helps with people management, salary payment, future exchange management, among other services. “That is, it facilitates the management of the company”, says Mota.