8.6 C
New York
Friday, September 25, 2020
Home Challanger banks Revolut offers staff swap salary for shares

Revolut offers staff swap salary for shares

Revolut’s staff are being offered shares in exchange for lower take-home pay. This comes as the company seeks to tighten its belt in light of the COVID-19 pandemic.

First reported by Financial News, the new scheme offers all staff the option to swap £1 of their salary for every £2 of share options in the company

Read also: Monzo shuts Las Vegas customer support office, 165 employees being let go

Both co-founders Nikolay Storonsky and Vladyslav Yatsenko are also forgoing their salaries for a year like fellow challenger bank Monzo’s founder Tom Blomfield. Monzo has also had to furlough hundreds of staff.

Other members of Revolut’s senior team have most likely also taken similar pay cuts.

Co-founder of UK-based fintech Ikigai, Maurizio Kaiser, said following “This could completely wipe out a generation of start-ups, and also wipe out investors who won’t be able to invest in the next set of start-ups”.

“Very early-stage investors have downside protection in the form of Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS), but founders do not.”

“They tend to forego a salary in the early stages and might even have invested their own savings,” says Kaiser.

Revolut announced the closure of a long-awaited $500m fundraising on 25 February. Investors including Technology Crossover Ventures, which led the round, valued the start-up at $5.5bn.

Read also: Santander launches PagoFX in the UK to take on TransferWise

But the digital bank’s revenues have been hit by government-enforced lockdowns and travel bans, according to people close to the bank.

Interchange fees, which are deducted whenever a payment is made using a Revolut card, is another revenue stream that has suffered.

Revolut’s revenues more than quadrupled in the 12 months to 31 December 2018, rising 455% to £58.2m.

However, the start-up saw losses rise to £32.9m in 2018, up 222% on the previous year.

Avatar
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

Yandex agrees to Tinkoff bank acquisition for $5.5bn

Yandex is Russia’s biggest tech company and now it is set to buy the challenger bank called Tinkoff for $5.5 billion.

TransferWise reports 70% revenue growth and a 4th straight year of profitability

Annual revenue at TransferWise grew to £302.6 million, the company. These results show a net profit after tax of £21.3 million for fiscal year ending March 2020.

“Mitto helps its users to save money while saving the planet,” says Marcos Cuevas, the company’s co-founder and CEO

Mitto is a Barcelona-based debit card/finance app and it is mainly a sustainability-focused product that has raised €2M from Athos Capital and others. Mitto has a live crowdfunding campaign on Crowdcube in which the company has already raised £500,000.

Allica Bank is launching a £100m funding round

Allica Bank has already closed a £26 million investment and now is launching a new £100 million funding round to meet the current high levels of demand for its services.