Title: "All Wealth Myths Are the Result of Non-Consensus and the Compounding Effect of Time"
Original Author: Sleepy.txt, Beating
In 2017, Shere Investment first invested in Pop Mart, and continued to increase its investment in the following years. In December 2020, Pop Mart was listed on the Hong Kong Stock Exchange, with its market value exceeding HKD 100 billion on its first day of trading. Shere Investment achieved more than a hundredfold return on investment, becoming a classic case in China's consumer investment sector.
In 2010, Sequoia Capital China Fund invested in Meituan. Through multiple rounds of follow-on investments, Sequoia China achieved a return of over 100 times when Meituan went public. This investment helped establish Sequoia China as one of the most successful venture capital firms in the history of China's internet industry.
In the world of venture capital, a tenfold return is already excellent, while a hundredfold return is legendary.
However, in Europe, one venture capital firm earned nearly 1,400 times return on a single investment.
This institution is called Balderton Capital. In 2015, they led the seed round investment of "Europe's Alipay," Revolut, with a 1 million pound investment. In the following 10 years, they continued to participate in multiple subsequent funding rounds, with a total investment of approximately 3 million pounds.
In 11 years, Revolut has grown from a grassroots project rejected by Y Combinator into a $75 billion fintech giant, hailed as Europe's most valuable fintech company. Today, Revolut has over 65 million users worldwide, generates more than $4 billion in annual revenue, earns over $1 billion in annual profits, and processes billions of dollars in transactions every day.
In 2025, Balderton Capital cashed out approximately $2 billion by continuing to sell part of its stake in Revolut. The remaining shares they hold are valued at over $4 billion based on the latest valuation. This means that Balderton's total return from Revolut exceeds $6 billion, which is nearly 1,400 times their initial investment.
More impressively, the fund held by Balderton in Revolut—the Balderton Capital Fund V, established in 2014 with a total fundraising of only $305 million—has already returned over 20 times the invested capital to its investors by 2025 through the partial sale of its Revolut shares. This means that even if all other investments in this fund were to become worthless, its return multiple would still significantly exceed the industry's top-tier average of 3 to 5 times.
This story reveals the essence of venture capital. In a business world where certainty has long vanished, how should we face uncertainty? When everyone sees risks, where do opportunities hide?
People from Two Worlds
The beginning of this story is the meeting of two completely different people in early 2015.
The first person is Nikolay Storonsky, a restless Russian through and through. His father is a senior executive at Gazprom, Russia's state-owned gas company, and the family is well-off. Nikolay holds dual master's degrees in physics from the Moscow Institute of Physics and Technology and economics from the New Economic School. He is also a sports enthusiast, having been a national-level swimming champion and passionate about boxing and surfing.
In 2006, he came to London and became a derivatives trader at Lehman Brothers, handling billions of dollars in daily transactions. In 2008, after Lehman Brothers collapsed, he switched to Credit Suisse. During his frequent global business travels, he spent thousands of dollars each year on foreign exchange losses. He found this unreasonable and unfair.
So, he turned to Vlad Yatsenko, a software engineer who had worked at Credit Suisse and Deutsche Bank for 10 years, and decided to tackle the problem himself.
In 2014, they founded Revolut at the Level39 incubator in London's Canary Wharf. Storonsky put all his savings—£300,000—on the line, betting his future on it.
The second person about to meet with him, Tim Bunting, comes from an entirely different world.
In 2007, 43-year-old Bunting decided to leave Goldman Sachs.
He worked at Goldman Sachs for 18 years, rising to the positions of Global Head of Equity Capital Markets and Executive Vice Chairman International, and became one of Goldman Sachs' partners. He reached the pinnacle of a world of certainty, where every transaction had precise models, every decision was supported by massive amounts of data, risks were quantified, and the future was predictable.
But he chose to leave and jumped into a completely different world—venture capital.
He joined Balderton Capital. The essence of venture capital is to seek possibilities amid uncertainty. There are no perfect models here, only vague foresight and judgment about people.
The situation for Revolut was quite bleak when they met in February 2015. Their product demo wasn't even working properly at that time, and they had just been rejected by Y Combinator, one of the most renowned incubators in Silicon Valley. In any normal investment decision process, this would have been a project that would have been immediately rejected.
But Bunting saw something different.
He later recalled that in Stolinsky's eyes, he saw an ambitious and formidable determination to overturn the entire European banking industry. At the same time, he saw steadiness and reliability in his technical partner, Yatsenko. One understood finance, the other mastered technology; one was driven and energetic, the other calm and composed. This was a perfect combination for founders.
When everyone sees risks, great investors see opportunities. Consensus often leads only to average returns; it is only through non-consensus that the potential for exceptional returns exists.
In July 2015, Balderton officially led the seed round investment in Revolut, investing £1 million, valuing the company at £6.7 million post-investment.
But is having an excellent founder and courageous investors enough? Behind a miracle that delivers a 1,400 times return, are there even greater forces at play?
Favorable timing, advantageous location, and harmonious people.
Behind Revolut's success lies a combination of favorable timing, location, and people.
First, there are the aftershocks of the 2008 financial crisis, which nearly destroyed the public's trust in traditional banks.
According to a Eurobarometer survey, the trust of European citizens in banks has dropped to a historical low after the crisis. Banks themselves are also deeply mired in difficulties, with sharply declining profitability. Data show that the average return on equity (ROE) of European banks fell from about 11% before the crisis to 4%-5% around 2015, significantly lower than their U.S. counterparts.
In order to survive, banks began large-scale layoffs. From 2012 to 2015, European banks closed more than 10,000 branches and laid off tens of thousands of employees. This led to a sharp decline in banking service quality, a terrible customer experience, and created a huge market vacuum for new challengers.
At the same time, the wave of technological advancement was reshaping the market. In 2015, smartphone penetration in Europe began to rise sharply, and the adoption of mobile banking also accelerated rapidly. The shift of financial services from physical branches to mobile apps has become an irreversible trend.
Meanwhile, favorable regulatory winds have also arrived at just the right time. In late 2015, the European Union passed the second version of the Payment Services Directive (PSD2). The core of this legislation is "open banking," which breaks the monopoly of banks over customer data and allows third-party financial technology companies to access users' bank account data, under user authorization, to provide innovative financial services. This has paved the way for the development of the entire fintech industry.
A new generation of consumers is growing rapidly. As digital natives, they strongly dislike the cumbersome processes and poor experiences of traditional banks. A 2015 survey showed that 80% of consumers under 45 years old believed they should be able to handle any financial service through a mobile app.
Moreover, the inherently fragmented nature of the European market has also served as a catalyst for Revolut. Europe consists of dozens of countries, languages, and currencies, and the inconvenience and high costs of cross-border transactions have long been a major pain point.
Against this backdrop, around 2015, the fintech scene in Europe erupted with activity. German startup N26, UK-based Monzo and Starling, and cross-border money transfer specialist TransferWise (now known as Wise) all emerged around the same time. Each carved out its own niche: N26 focused on design, Monzo emphasized social features. The prevailing industry consensus at the time was: capture one market or one product category at a time.
But Revolut has been an outlier from the start.
Its core insight was that banking could be built like a global software product, fully stack and borderless from day one. While competitors were still carefully cultivating a single experimental patch, Revolut had already expanded globally. This bold strategy, which was highly controversial at the time, ultimately allowed it to outpace all its competitors.
However, the journey from a grand vision to a great company is fraught with peril, and Revolut has certainly faced its share of challenges along the way.
Rushing headlong through the controversy
One of Revolut's company values is "Never Settle" (Never be satisfied). This value is deeply embedded in the company's DNA, driving it to keep rushing forward amid controversies over the past 11 years.
This insatiable drive is first reflected in the speed of product expansion.
In July 2015, Revolut officially launched its product and processed over $500 million in transactions in its first year. By the end of 2016, the user base exceeded 300,000, with nearly £1 billion in transaction volume processed. In November 2017, Revolut announced that it had surpassed 1 million users, reaching this milestone in just over two years.
Strolinsky's creed is, "Releasing and iterating faster will give you more opportunities to win." After launching its core product, the low-fee currency exchange card, Revolut quickly introduced many new features: cryptocurrency trading in 2017, followed by stock trading, savings vaults, budgeting tools, insurance, peer-to-peer payments, business accounts, and more. It has transformed itself into an all-encompassing financial super app, while its competitors are still cautiously guarding their own small domains.
This aggressive expansion strategy brought astonishing growth. In 2017, Revolut's user base tripled, and its revenue increased nearly fivefold. In 2018, the user base grew from 1.5 million to 3.5 million, and revenue surged by 354%. By April 2018, Revolut completed a $250 million Series C funding round, achieving a post-money valuation of $1.7 billion and officially becoming a unicorn.
Revolut is able to quickly launch new features because the company internally adopts a venture capital-style product strategy.
They are not superstitious about elite-style "top-down design." Internally, there are often numerous new products and features being tested simultaneously. However, only a small portion of them will eventually "graduate" and become actual business lines. Those that don't succeed are cut, while the ones that are successfully validated will receive significantly increased resource support from the company.
Today, none of Revolut's core revenue-generating products stem from top-level strategic planning; instead, they all emerged from a culture of internal competition and trial-and-error.
But this also came at a great cost. Over these 11 years, Revolut has faced at least three life-or-death challenges.
The first test comes from trust.
In 2016, the company needed more capital for expansion, but traditional financing channels were not working smoothly. Stolarski came up with a bold idea: to raise funds from the public through the crowdfunding platform Crowdcube. This was an unconventional move at the time, and many investors expressed opposition.
However, Balderton strongly supported this decision despite opposition. They believed that it would not only resolve the funding issue but also serve as an excellent marketing opportunity to test the public's trust in Revolut. In the end, 433 ordinary people participated in this crowdfunding campaign, with an average investment of about £2,152 each. They believed in Revolut's vision and cast their votes for the startup with real money.
And now, these early supporters have also reaped astonishing returns. The price of an iPhone back then, after 10 years, became a down payment for a house in the suburbs of London. An initial investment of £2,152 has grown to be worth over £380,000, yielding a return more than 170 times the original amount.
The second test came from culture.
In February 2019, the UK's Wired magazine published a major exposé revealing serious issues with Revolut's corporate culture. The report accused the company of pursuing growth at all costs and ruthlessly exploiting its employees, leading to an extremely high employee turnover rate. As a result, the company suddenly found itself in a major public relations crisis.
At that time, Revolut was experiencing rapid growth. In 2019, the company's user base exceeded 10 million, and it began expanding into Australia and Singapore. However, the outbreak of this crisis severely damaged the company's reputation.
As a board member, Bunting had an in-depth conversation with Storonsky at the earliest opportunity. He shared his own experience from managing thousands of people at Goldman Sachs, helping Storonsky realize that once a company reaches a certain stage, it must establish a more mature and humanized management system. With Balderton's assistance, Revolut brought in more experienced managers and began systematically improving its corporate culture.
The third test came from compliance.
Since 2021, Revolut has applied for a banking license from the UK's Financial Conduct Authority (FCA), but it has not been approved for an entire three years. The regulator raised serious concerns about its anti-money laundering systems and corporate governance. This is a fatal blow for a fintech company.
While waiting for its UK license, Revolut did not slow down its expansion. In 2020, the company completed a $580 million Series D funding round, reached 14.5 million users, and entered the U.S. and Japanese markets. In 2021, it raised $800 million in a Series E funding round, achieving a valuation of $33 billion. By 2022, the user base had grown to 26 million.
At a critical moment, it was once again Bunting who leveraged his industry network. He personally invited Martin Gilbert, a titan of the UK investment world and chairman of Aberdeen Standard Investments, to serve as chairman of Revolut. This move significantly enhanced the trust of regulators in Revolut. In July 2024, Revolut finally secured the valuable UK banking license.
While obtaining a UK license, Revolut also delivered an impressive performance. In 2024, the company's user base exceeded 50 million, with annual revenue reaching $4 billion, a 72% increase. For the first time, its annual profit surpassed $1 billion, and the total value of customer transactions processed exceeded $10 trillion. The company became the most downloaded financial app in 19 countries.
Throughout these 11 years of journey filled with challenges and progress, Balderton Capital has consistently stood firmly behind Revolut. Bunting has served as a board member of Revolut, providing indispensable support at every key stage of Revolut's development, and has continuously participated in each subsequent funding round.
The "American Dream" of European VCs
Revolut's meteoric rise has brought Balderton, previously a behind-the-scenes venture capital firm, into the spotlight. The fundamental logic behind this London-based VC's success in capturing such a miracle is not due to mere luck, but stems from its very essence—its lineage as a descendant of Benchmark Capital, a prestigious Silicon Valley firm.
In 1999, the partners of Benchmark decided to establish a European branch in London, called Benchmark Capital Europe. They brought not only capital, but also a unique organizational structure—the equal partnership model.
In traditional VC funds, a few general partners (GPs) usually hold the majority of power and profits, while other partners occupy relatively secondary positions. This pyramid structure often leads to internal competition and conflicts of interest.
In contrast, equal partnership is entirely different. At Balderton, all partners equally own the firm, have equal say in any decision-making, and receive equal economic rewards—regardless of who identified or led a particular deal, everyone shares the same financial returns. This system ensures that all partners' interests are highly aligned, enabling them to work together as a pack of wolves.
The advantages of this system are clearly demonstrated in the process of investing in Revolut.
First was better due diligence. When Bunting first met Storonsky, he understood financial markets thoroughly but did not fully grasp the technical implementation behind the idea. As a result, he immediately brought in partner Suranga Chandratillake, who had an engineering background, to evaluate the opportunity together. With no concerns about taking credit among the partners, they shared a single common goal: to invest in the best companies.
Second, because the interests of all partners are fully aligned, they are able to genuinely make the most beneficial decisions from the company's perspective. During multiple funding rounds of Revolut, Balderton has consistently provided strong support, never hesitating due to internal conflicts of interest.
Finally, there is more comprehensive post-investment support. Startups encounter different challenges at various stages. The equal partnership model means that entrepreneurs can access the resources of the entire partner team at any time.
In 2007, the European team separated from Benchmark and officially renamed itself Balderton Capital, named after the street where their first office was located. The core system of equal partnership was also fully preserved and became a key factor in Balderton's ability to stand out in the European venture capital landscape.
However, even a good system cannot guarantee the success of every investment. In the world of venture capital, what ultimately determines success or failure?
Power Law
Simply put, this rule is an extreme version of the 80/20 rule.
In the world of venture capital, it means that a small portion of the investments will contribute the majority of the fund's returns, while the majority of the investments will ultimately yield mediocre results or even result in total losses.
According to data from PitchBook, the top 10% of investments in the venture capital industry account for 60% to 80% of the industry's returns. The daily work of a VC involves searching for that 1% chance among countless projects that seem unreliable at first glance. They need to cast a wide net, but more importantly, they must place significant bets on a very small number of projects with the potential to become superstars at critical moments.
Over its 25-year history, Balderton Capital has invested in more than 275 companies, including star enterprises such as Darktrace, Depop, and GoCardless. Without Revolut, Balderton might still be an excellent European VC firm, but it certainly wouldn't be the legend it is today.
This also defines the essence of venture capital as a game based on non-consensus. If a project's potential has already become a consensus among everyone, its valuation will inevitably rise, leaving very limited room for future returns. Only those early-stage projects that are initially undervalued and surrounded by controversy—non-consensus ideas—have the potential to deliver disruptive, above-average returns.
For venture capital, success is not about hit rate, but about the magnitude of returns. Missing nine out of ten investments doesn't matter, as long as one investment returns a thousandfold, it's enough to achieve great success. This may sound like gambling, but top-tier VCs use a rigorous philosophy and discipline to increase the probability of winning.
So, is there a replicable formula behind this miracle of a 1400 times return?
The formula for a thousandfold return
Excess returns = (Unconventional founders × Structural era opportunities) ^ Patience across cycles
First, the founder of non-consensus.
In the world of venture capital, evaluating people is always the top priority. Especially at the seed stage, when the product, market, and data do not yet exist, the founder is almost the sole basis for judgment. A top-tier founder must be an optimistic perfectionist, someone who can have unrealistic visions for the future while also being grounded enough to solve immediate problems.
Second, there are structural opportunities of the era. Revolut's success is inseparable from the unique historical window in Europe in 2015. The lingering effects of the financial crisis, the popularity of mobile internet, the liberalization of regulatory policies, and the generational shift among consumers all played a role. Great companies are products of their time. They can keenly identify structural changes and use their products and services to become synonymous with those changes.
Finally, and most importantly, is the patience to ride through the business cycle. From 2015 to 2026, Revolut has gone through a cultural crisis, regulatory challenges, and intense market competition. Over these 11 years, Balderton has remained a firm supporter, not only continuously investing but also providing valuable advice and resources at critical moments. This long-term commitment and patience in weathering difficulties alongside the founders is a necessary condition for achieving exceptional returns.
In the world of capital, time is the best friend as well as the worst enemy. Only those investors who can resist short-term temptations and stick to long-term values will ultimately reap the compounding returns of time.
A million pounds turning into six hundred million dollars is not just a wealth myth; it is a story about insight, courage, and patience. It tells us that in this rapidly changing era, real opportunities are always reserved for those who can perceive the trends of the times, embrace change, and are willing to journey through cycles alongside great entrepreneurs as long-term thinkers.
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