Revolut Co-Founder Launches QuantumLight: $200M AI Venture Capital Firm

Revolut Co-Founder Launches QuantumLight: $200M AI Venture Capital Firm

In a world increasingly influenced by algorithms and artificial intelligence, a new player has emerged in the venture capital space. Nikolay Storonsky, co-founder of Revolut, has launched QuantumLight, a quantitative investment firm that relies on AI algorithms to source deals for early-stage companies. Since its founding in 2022, QuantumLight has already invested in nearly a dozen startups after raising a staggering $200 million for its debut fund.

While the venture sector has experienced a downturn recently, QuantumLight has been able to secure investments by taking a stake in health care-focused startup Rad AI, marking its fourth allocation this year. In fact, the firm is currently finalizing another deal, according to an insider.

QuantumLight sets itself apart from traditional venture firms by positioning its reliance on AI and data-driven decision-making as its key differentiator. Chief Executive Officer Ilya Kondrashov explains, “We look quite different compared to a traditional venture firm. It’s pretty logical that something like what we are doing will exist.” Storonsky’s involvement in QuantumLight marks the latest venture investment by a European tech billionaire looking to expand their wealth beyond their primary assets.

Revolut, the digital banking platform founded by Storonsky in 2015, recently announced its financial results for 2023, revealing a doubling of revenue to $2.2 billion. This timely release of audited financial results could help Revolut secure a much-awaited UK banking license.

Storonsky’s decision to allocate $60 million to QuantumLight’s fund is backed by his confidence in the firm’s ability to make precise decisions at a quicker pace than humans. He believes that systematic strategies, like those employed by QuantumLight, will come to dominate the market for startup deals, much like how Revolut challenged traditional banks.

Quant investing has been a powerful force in public markets for decades. Still, the lack of publicly available data in the private assets space has kept systematic players at bay. However, this is changing rapidly as financial firms seek to gain an edge in the booming realm of private equity and credit. QuantumLight has recognized this shift and has assembled a team of data engineers to support its quantitative investment approach.

While several venture funds have utilized AI models to analyze potential deals, Claudia Zeisberger, a senior affiliate professor for entrepreneurship at business school Insead, emphasizes that in venture capital, money is not the sole differentiator. The “soft stuff,” such as the investor network and relationship-building, remains crucial.

QuantumLight positions itself as the “first truly systematic” venture firm. The firm has raised funds from other tech founders and family offices, offering its portfolio company executives access to a playbook based on Storonsky’s experience in transforming Revolut into one of Europe’s most valuable startups.

The relationship between Storonsky and Kondrashov, who serves as QuantumLight’s CEO, has been fruitful since their initial meeting before the pandemic at a dinner for entrepreneurs in London. Storonsky’s involvement in major decisions is crucial to the firm’s operations.

With its first deal made in July 2023, QuantumLight now allocates about $5 million per investment. Kondrashov plans to continue making investments at a consistent pace for the next three years without immediate plans to raise another fund. He anticipates adding roughly a deal per month, confident that the capital raised so far is sufficient for QuantumLight’s ambitions.

As the venture capital landscape evolves, QuantumLight’s AI-driven approach, paired with the expertise of Storonsky and Kondrashov, has the potential to disrupt traditional investment firm models. By leveraging technology and data, QuantumLight aims to take on industry giants and offer a unique value proposition to startups seeking funding in an increasingly competitive market.