Revolut, the UK's $1.7 billion star fintech, has big dreams as it takes on the American market

Revolut

Revolut cofounders Vlad Yatsenko, left, and Nikolay Storonsky.

• London's Revolut was founded only three years ago but already has 3 million customers, and is aiming for 100 million customers in the next five years.
• The challenger bank is set to hit the US market in early 2019, saying 75,000 people are already on the waiting list.
• "We want to one of the largest financial services companies in the world," says CEO Nikolay Storonsky.

A UK app-based banking alternative valued at $1.7 billion has plans to grow even bigger. Just three years old, it's hitting the US early next year to continue its rapid expansion.

Revolut, founded in 2015 by a developer, Vlad Yatsenko, and former trader Nikolay Storonsky, already has 3.2 million customers and the company boasts that it has long waiting lists outside Europe. Dubbed "the Amazon of banking," Revolut's success has reportedly lured a potential $500 million investment from Japan's SoftBank.

The London company allows users to spend money worldwide in 150 currencies at a real-time exchange rate, with no fees, through a debit card. CEO Nikolay Storonsky outlined his ambition to see the bank reach 100 million customers in the next five years and break into North American and Pacific markets in the coming months.

"We want to one of the largest financial services companies in the world and continue our expansion," Storonsky, a former Lehman Brothers and Credit Suisse trader, said in an interview with Business Insider. "That's my dream."

The US market has long been on Revolut's list for expansion, he says, but with significantly higher barriers to entry than Europe, progress has been slow. The company had originally planned to expand into the US by the end of 2018 but is now expecting a roll out early next year, in late March or early April.

Among the hurdles: US regulations require domestically issued debit cards to use a different inter-bank messaging system - basically how banks send and receive information such as money transfers - compared with the rest of the world. And US debit cards must have at least two networks to be compliant. Rather than partner with a US provider, Storonsky said Revolut opted to build its own US-based processor.

The company will decide soon which bank to partner with in the US as part of its offering.

"Regulation is key, in the UK it's very quick," said Storonsky, who holds a masters in economics from the New Economic School in Moscow. "But as you become a big organization, regulators pay much more attention, which can slow things down."

As well as the US, Revolut plans to expand to Canada, Australia, New Zealand, Hong Kong, Singapore, and Japan in 2019. More Asia Pacific launches will come in the first quarter of next year.

Read More: UK fintechs claim Brexit could lead to a 'lost generation' of London businesses

The company raised $250 million earlier this year, giving it a $1.7 billion valuation. Earlier this month, Revolut was reported to be in talks with SoftBank to secure a $500 million investment. Storonsky declined to comment on any Softbank discussions, and was coy on the prospect of future funding.

"It depends how much investors are willing to invest," he said. "We're open to new investors, but them having a good reputation is important."

Previous series C funding was led by DST Global, the investment vehicle of Russian billionaire Yuri Milner who was an early investor of Facebook, Twitter, and Spotify, among others. Existing Revolut investors Index Ventures and Ribbit Capital also took part in the financing.

Revolut's success has been built on its low-fee, multi-currency platform so far. But Storonsky sees cryptocurrencies, already on offer via Revolut, as an enduring part of the company's future. Cryptocurrencies have plunged in 2018 with their combined market cap now at $130 billion, down from a high of $800 billion in January, according to research site CoinMarketCap.

"Banks are still very risk averse of crypto, institutional funds as well" says Storonsky. "As a result, Wall Street is not really interested - there is no demand from institutional clients."

On the product side, Revolut offers customers three options: a free account, a premium account, and a recently introduced metal account. The latter provides users with unlimited exchange in 24 fiat currencies, as well as five major cryptocurrencies: bitcoin cash (BCH), bitcoin core (BTC), ethereum (ETH), litecoin (LTC), and ripple (XRP).

Storonsky says Revolut has managed to sidestep the Brexit snags that have impacted a large number of other UK fintechs. The firm has applied for a banking license in Luxembourg as part of its plans to reduce any Brexit related issues.