All wealth myths are conspiracies of non-consensus and time compounding

Original Author: Sleepy.txt, Dongcha Beating

In 2017, Heiyi Capital made its first investment in Pop Mart and continued to invest additional rounds in the following years. In December 2020, Pop Mart went public in Hong Kong, with its market capitalization exceeding HKD 100 billion on the first day. Heiyi Capital achieved a paper return of over 100x, becoming a classic case in China's consumer investment sector.

In 2010, Sequoia Capital China invested in Meituan. After multiple follow-on investments, it ultimately achieved a return of over 100x when Meituan went public. This investment made Sequoia China one of the most successful institutions in the history of Chinese internet investment.

In the world of venture capital, a 10x return is considered excellent, while a 100x return is legendary.

However, in Europe, one venture capital firm achieved a nearly 1400x return on a single investment.

This firm is Balderton Capital. In 2015, they led the seed round for "Europe's Alipay," Revolut, investing £1 million. Over the next 10 years, they continued to participate in multiple funding rounds, with a total investment of approximately £3 million.

In 11 years, Revolut grew from a grassroots project rejected by Y Combinator into a fintech giant valued at $75 billion, hailed as Europe's most valuable fintech company. Today, Revolut has over 65 million users globally, with annual revenue exceeding $4 billion, annual profit over $1 billion, and processes billions of dollars in transactions daily.

In 2025, Balderton Capital cashed out approximately $2 billion by continuously selling part of its stake in Revolut. The remaining shares they hold are still worth over $4 billion based on the latest valuation. This means Balderton's total return on Revolut exceeds $6 billion, nearly 1400 times its investment.

Even more astonishing is that the fund holding Balderton's Revolut shares—Balderton Capital Fund V, established in 2014—had a total fundraising size of only $305 million. In 2025, by selling part of its Revolut stake, this fund had already returned over 20x to its investors. This means that even if all other investments in this fund went to zero, its return multiple would still far exceed the industry's top-tier fund average of 3-5x.

This story speaks to the essence of venture capital. In a business world where certainty has long vanished, how should we face uncertainty? When everyone sees risk, where does opportunity hide?

Two People from Different Worlds

The starting point of this story is the meeting of two vastly different individuals in early 2015.

The first person is Nikolay Storonsky, a Russian whose very bones are etched with restlessness. His father was a senior executive at Gazprom, providing a comfortable upbringing. He 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 fanatic, a former national-level swimming champion, and passionate about boxing and surfing.

In 2006, he moved to London, becoming a derivatives trader at Lehman Brothers, dealing with billions of dollars in trades daily. After Lehman Brothers collapsed in 2008, he moved to Credit Suisse. During frequent global travels, he incurred thousands of dollars in foreign exchange losses annually. He found this unreasonable and unfair.

So, he teamed up with Vlad Yatsenko, a software engineer with 10 years of experience at Credit Suisse and Deutsche Bank, to solve this problem themselves.

In 2014, they founded Revolut at the Level39 incubator in London's Canary Wharf. Storonsky invested his entire life savings of £300,000, betting on his future.

The second person he was about to meet, Tim Bunting, came from another world.

In 2007, the 43-year-old Bunting decided to leave Goldman Sachs.

He had worked at Goldman Sachs for 18 years, rising to become the Global Head of Equity Capital Markets and International Vice Chairman, one of the firm's partners. He stood at the pinnacle of a world of certainty, where every trade had precise models, every decision was backed by massive data, risks were quantified, and the future was predicted.

Yet he chose to leave, plunging into a completely different world—venture capital.

He joined Balderton Capital. The essence of venture capital is finding possibility within uncertainty. There are no perfect models here, only vague foresight and judgment of people.

When they met in February 2015, Revolut's situation was bleak. Their product demo was still non-functional, and they had just been rejected by Silicon Valley's most famous incubator, Y Combinator. In any normal investment decision process, this would be a project instantly vetoed.

But Bunting saw something different.

He later recalled seeing in Storonsky's eyes an ambition and drive to overturn the entire European banking industry. Simultaneously, he saw steadiness and reliability in the technical co-founder, Yatsenko. One understood finance, the other technology; one had drive, the other had composure—a perfect founder combination.

When everyone sees risk, great investors see opportunity. Consensus often only brings mediocre returns; only non-consensus can potentially deliver outsized returns.

In July 2015, Balderton officially led Revolut's seed round, investing £1 million at a post-money valuation of £6.7 million.

However, are excellent founders and courageous investors enough? Is there a greater force driving a 1400x return miracle?

Timing, Location, and People

Behind Revolut's success lies timing, location, and people.

First, the aftershocks of the 2008 financial crisis, which nearly destroyed public trust in traditional banks.

According to Eurobarometer surveys, European public trust in banks hit a historic low post-crisis. Banks themselves were mired in trouble, with profitability plummeting. Data shows the average Return on Equity (ROE) for European banks fell from around 11% pre-crisis to 4%-5% around 2015, far below their US counterparts.

To survive, banks began massive layoffs. From 2012 to 2015, European banks closed over 10,000 branches and cut tens of thousands of jobs. This led to a sharp decline in service quality and terrible customer experience, leaving a huge market vacuum for new challengers.

Meanwhile, the wave of technology was reshaping the market. In 2015, smartphone penetration in Europe began to rise significantly, and mobile banking adoption grew rapidly. The shift of financial services from offline branches to mobile apps became an irreversible trend.

The regulatory tailwind also arrived at the right time. The EU passed the second Payment Services Directive (PSD2) in late 2015. The core of this legislation is "open banking," breaking banks' monopoly on customer data and allowing third-party fintech companies to access user bank account data with authorization to provide innovative financial services. This paved the way for the entire fintech industry's development.

A new generation of consumers was also rapidly maturing. As digital natives, they deeply disliked traditional banks' cumbersome processes and poor experiences. A 2015 survey showed 80% of consumers under 45 believed they should be able to complete any financial task through a mobile app.

The fragmented nature of the European market itself became a booster for Revolut. Europe consists of dozens of countries, languages, and currencies. The inconvenience and high cost of cross-border transactions had long been a major pain point.

Against this backdrop, around 2015, the starting gun fired simultaneously on Europe's fintech track. Germany's N26, the UK's Monzo and Starling, and cross-border remittance-focused TransferWise (now Wise) emerged almost concurrently. They each occupied a niche: N26 focused on design, Monzo emphasized social features. The industry consensus then was to conquer one market or product category at a time.

But Revolut was an outlier from the start.

Its core insight was that banking could be built like a global software product, full-stack and borderless from day one. While competitors were meticulously cultivating their test plots, Revolut was expanding globally. This bold, highly controversial strategy at the time ultimately allowed it to outpace all rivals.

However, between a grand vision and a great company lies a perilous journey. Revolut's path was not smooth.

Sprinting Amid Controversy

One of Revolut's company values is "Never Settle." This value is deeply ingrained in the company's DNA, driving it to sprint through controversy over the past 11 years.

This "never settle" attitude first manifested in the speed of product expansion.

In July 2015, Revolut officially launched its product, processing over $500 million in transactions in its first year. By the end of 2016, user numbers exceeded 300,000, processing nearly £1 billion in transaction volume. In November 2017, Revolut announced surpassing 1 million users, reaching this milestone in just over two years.

Storonsky's creed is "Releasing and iterating faster gives you more chances to win." After launching its core low-fee foreign exchange card, Revolut quickly introduced many new features: cryptocurrency trading in 2017, followed by stock trading, savings vaults, budgeting tools, insurance, P2P payments, business accounts... It transformed itself into an all-encompassing financial super-app, while its competitors were still cautiously guarding their own turf.

This aggressive expansion strategy drove astonishing growth. In 2017, Revolut's user base tripled, and revenue grew nearly fivefold. In 2018, users grew from 1.5 million to 3.5 million, with revenue increasing by 354%. By April 2018, Revolut completed a $250 million Series C funding round, reaching a post-money valuation of $1.7 billion, officially becoming a unicorn.

Revolut's ability to launch new features quickly stemmed from its VC-like internal product strategy.

They didn't believe in elite "top-down design." Internally, many new products and features were often tested simultaneously. Only a small fraction would eventually "graduate" into real business lines. Those that didn't gain traction were cut, while successfully validated ones received doubled resource allocation.

Today, none of Revolut's core revenue products came from top-level strategic planning; all grew from this culture of internal competition and trial-and-error.

But this came at a great cost. Over these 11 years, Revolut faced at least three existential crises.

The first crisis was about trust.

In 2016, the company needed more funds for expansion, but traditional financing channels weren't smooth. Storonsky proposed a bold idea: raising funds from the public via the crowdfunding platform Crowdcube. This was a very unconventional move at the time, opposed by many investors.

But Balderton overruled the objections, supporting the decision. They believed it not only solved funding but was also excellent marketing, testing public trust in Revolut. Ultimately, 433 ordinary people participated, investing an average of about £2,152 each. They believed in Revolut's vision, voting for the startup with real money.

Now, these early supporters have reaped astonishing returns. The price of an iPhone back then turned into a down payment for a house in London's suburbs a decade later. That £2,152 investment is now worth over £380,000, a return exceeding 170x.

The second crisis was about culture.

In February 2019, UK's Wired magazine published a bombshell report exposing serious issues in Revolut's corporate culture. The report accused the company of pursuing growth at any cost, ruthlessly exploiting employees, leading to extremely high turnover. The company was plunged into a major public relations crisis.

At this time, Revolut was in a period of hyper-growth. In 2019, user numbers surpassed 10 million, and expansion into Australia and Singapore began. But this crisis severely damaged the company's reputation.

As a board member, Bunting immediately engaged in deep discussions with Storonsky. He shared his experience managing thousands at Goldman Sachs, helping Storonsky realize that at a certain stage, the company must establish a more mature, humane management system. With Balderton's help, Revolut brought in more experienced managers and began systematically improving its corporate culture.

The third crisis was about compliance.

Starting in 2021, Revolut applied for a UK banking license from the Financial Conduct Authority (FCA), but approval didn't come for three full years. Regulators raised serious concerns about its anti-money laundering systems and corporate governance. This was a potentially fatal blow for a fintech company.

While waiting for the UK license, Revolut didn't halt its expansion. In 2020, it completed a $580 million Series D funding round, reaching 14.5 million users and entering the US and Japanese markets. In 2021, it completed an $800 million Series E round, valuing the company at $33 billion. By 2022, user numbers had grown to 26 million.

At the critical moment, Bunting leveraged his industry network again. He personally invited Martin Gilbert, a titan of UK investment and Chairman of abrdn, to become Revolut's Chairman. This move greatly enhanced regulators' trust in Revolut. In July 2024, Revolut finally obtained the precious UK banking license.

Upon receiving the UK license, Revolut also delivered stellar results. In 2024, user numbers surpassed 50 million, annual revenue reached $4 billion (up 72%), annual profit exceeded $1 billion for the first time, and total customer transaction volume processed exceeded $1 trillion. The company became the top-downloaded financial app in 19 countries.

Through these 11 years of trials, Balderton Capital remained steadfastly behind Revolut. Bunting served continuously on Revolut's board, providing indispensable support at every critical juncture and participating in every subsequent funding round.

European VC's "American Dream"

Revolut's legendary success brought Balderton, long behind the scenes, fully into the spotlight. The underlying logic behind this London VC's capture of a miracle wasn't accidental luck but stemmed from the blood of Silicon Valley powerhouse Benchmark Capital flowing in its veins.

In 1999, Benchmark's partners decided to establish a European branch, Benchmark Capital Europe, in London. They brought not only capital but also a unique organizational structure—the Equal Partnership model.

In traditional VC funds, a few General Partners typically hold most of the power and profits, while other partners are in relatively secondary positions. This pyramid structure easily leads to internal competition and conflicts of interest.

The Equal Partnership model is completely different. At Balderton, all partners own the firm equally, have equal say in any decision, and share economic returns equally, regardless of who sourced or led the deal. This system ensures all partners' interests are highly aligned, enabling them to operate like a pack of wolves.

The advantages of this system were vividly demonstrated during the Revolut investment.

First, better due diligence. When Bunting first met Storonsky, while he understood financial markets thoroughly, he wasn't fully versed in the underlying technical implementation. So, he immediately brought in partner Suranga Chandratillake, who had an engineering background, to jointly assess. Partners had no concerns about claiming credit, only a shared goal: investing in the best companies.

Second, because all partners' interests were completely tied, they could truly make decisions most beneficial for the company from its perspective. In Revolut's multiple funding rounds, Balderton provided unwavering support, never hesitating due to internal disputes.

Finally, more comprehensive post-investment support. Startups face different problems at different stages. The equal partnership model means entrepreneurs can tap into the entire partner team's resources at any time.

In 2007, the European team spun off from Benchmark, officially renamed Balderton Capital, after the street where their first office was located. The core equal partnership system was fully preserved, becoming key to Balderton's standout success in the European VC jungle.

However, a good system doesn't guarantee every investment's success. In the world of venture capital, what ultimately determines victory?

The Power Law

Simply put, this law is an extreme version of the 80/20 rule.

In the world of venture capital, it means a small fraction of investments will contribute the vast majority of a fund's returns. The vast majority of investments ultimately become mediocre or total losses.

According to PitchBook data, in the venture capital industry, the top 10% of investments contribute 60% to 80% of the entire industry's returns. A VC's daily work is searching for that 1% possibility among countless seemingly unreliable projects. They need to cast a wide net but, more importantly, place heavy bets on the very few projects with the potential to become super-winners at critical moments.

In Balderton Capital's 25-year history, it has invested in over 275 companies, including star companies like Darktrace, Depop, and GoCardless. Without Revolut, Balderton might still be an excellent European VC, but it wouldn't be the legend it is today.

This also determines that the essence of venture capital is a game of non-consensus. If a project's prospects have become everyone's consensus, its valuation inevitably rises, leaving limited future return potential. Only those early-stage, unpopular, controversial non-consensus projects can potentially deliver disruptive