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Why Startups Expect a 2025 Rebound
Signs of European VC improving, Revolut becomes Europe’s Most Valuable Startup, and more...
SearchVentures
January 01, 2025
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European VC may have a comeback
Happy New Year ✨ After a challenging couple of years for European startups, 2025 is projected to bring renewed optimism as the funding environment gradually recovers and investors regain confidence in startup investments.
What are VCs planning for 2025?
This Week’s Trends
Optimism returns in European VC
How Revolut became Europe’s Most Valuable Startup
New €140M climate tech fund and more
Read Time 3 minutes
The Startup Trend
European VC deals rebound
Despite the funding downturn, 20% of European startup founders found it easier to raise VC funding in 2024 compared to 7% in 2023, this was mainly due to the market showing increased optimism for European AI & tech startups.
> Founders have noted an increase in cross-border deals, signaling Europe’s potential shift away from a fragmented funding environment.
> According to investors, secondary funding is on the rise, providing liquidity options for early backers and improving investor confidence.
💡 European VC deals are projected to increase by nearly 12% in 2025, indicating a potential relief from the downturn of the past two years.
Startup Feature
How Revolut became Europe’s Most Valuable Startup
Revolut, founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, has become Europe’s most valuable startup of 2024, with a valuation of $45 billion. Starting as a simple idea for fee-free currency exchange, it has now become a financial super-app with over 50 million users.
“We built Revolut to solve the pain of unfair banking fees. That drove everything we did.”
Building the Future of Banking
Co-Founders Nikolay Storonsky and Vlad Yatsenko
In 2015, Nikolay Storonsky and Vlad Yatsenko realized that traditional banks were charging excessive fees for simple transactions and currency exchanges. They had both spent several years in the banking sector, with Nikolay working as a trader at Credit Suisse, while Vlad was developing financial systems for Deutsche Bank.
Convinced that traditional banks were exploiting a lack of competition, they set out to create a fintech startup designed to eliminate hidden fees and inefficiencies.
"Getting our first investor wasn’t easy. But we knew if we could solve a real problem, the growth would follow.”
The duo bootstrapped Revolut’s launch, with Nikolay investing £300,000 of his savings to develop the platform. The pitch for a transparent, low-cost currency exchange app quickly resonated with users, attracting over 100,000 in its first year.
Building on rapid growth and strong user adoption, Revolut secured its first $2.3 million seed round, allowing the founders to expand their fintech into payments & transactions.
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Becoming Europe’s Most Valuable Startup
In August 2024, Revolut reached a $45 billion valuation through a secondary share sale, becoming Europe’s most valuable startup and overtaking Checkout.com’s $30 billion valuation. Rather than raise new capital, the share sale allowed employees and early investors to cash out their equity, while attracting new backers like Coatue and Tiger Global, showcasing strong confidence in Revolut’s valuation and business model.
“We built Revolut to solve real problems in financial services, and this valuation reflects how far we’ve come.”
With over 50 million users across 35 countries, it now offers new services such as cryptocurrency, stock investments, business accounts, and travel insurance.
Revolut also secured its UK banking license in 2024, allowing it to offer regulated services like deposits and lending. This move positions Revolut as a fintech that directly competes with traditional banks while its total assets currently stand at €16.6 billion across its users.
What’s Next for Revolut?
Revolut is now preparing for its next phase of growth, with plans to enter the Indian market in 2025 and deploy a network of ATMs in Spain. With these initiatives Revolut is betting on stronger growth and digital centric banking for Europe, while expanding its service to the global market.
“Our mission is to create financial services that people love to use, and we’re just getting started”
Revolut’s $45 billion valuation makes it the most valuable startup of 2024. With rising interest for AI and tech across the European ecosystem, it would not be unlikely to see another startup take it spot for 2025.
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Headline News
This Week In Startups ✍️
Founders
> 1KOMMA5°, a German home electrification startup, has secured €150 million in a Pre-IPO round. This brings the company's funding to over €450 million.
> Mindgard, a security AI startup, has raised $8 million funding to tackle emerging AI security risks.
> Arborea has secured €5 million in a new funding round led by Indico Capital Partners to cultivate proteins on any surface.
Investors & VCs
> 360 Capital, a French VC firm, has closed its new climate tech fund, 360 LIFE II for the first time at €140 million.
> Fuel Ventures has raised a £20 million round from Chinese investors including Shijingshan Industrial Fund and Zhongguancun Development Group.
> Voima Ventures, a VC firm based in Helsinki and Stockholm, closes €100 million+ Fund III for Nordic and Baltic deeptech startups.
How Was Today's Newsletter?If this issue was a startup, how would you rate it? |
Cheers,
Odin Lund & Hari Mohandas
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