QuantumLight Launches $200 Million AI-Driven VC Fund by Revolut's Nik Storonsky

Revolut founder and CEO Nik Storonsky is set to revolutionize the venture capital landscape, much like he did with the financial services sector. The billionaire entrepreneur, formerly a trader at Lehman Brothers, has launched a new quantitative investment firm, QuantumLight, which leverages algorithms and artificial intelligence to identify early-stage investment opportunities. Founded in 2022, QuantumLight has already invested in nearly a dozen startups, raising approximately $200 million for its debut fund, significantly backed by Storonsky himself.

Despite the downturn in the venture sector, QuantumLight recently invested in Rad AI, a healthcare-focused startup, marking the firm's fourth allocation this year. According to sources, the London-based firm is currently finalizing another deal.

QuantumLight distinguishes itself from traditional venture capital firms by heavily relying on data and artificial intelligence rather than human intuition to source deals. CEO Ilya Kondrashov, speaking from the Revolut offices in London, stated, "We look quite different compared to a traditional venture firm. It’s pretty logical that something like what we are doing will exist."

Storonsky, 39, joins a growing cadre of European tech billionaires who are expanding their wealth beyond their primary ventures through strategic investments. Checkout.com founder Guillaume Pousaz's family office, Zinal Growth, has invested in over two dozen startups since 2021. Similarly, an investment firm associated with Spotify Technology SA's Daniel Ek invested €10 million last year in a Swiss startup focused on anti-aging technologies. Collectively, Pousaz and Ek possess fortunes estimated at around $10.4 billion, while Storonsky's net worth stands at approximately $4 billion, according to the Bloomberg Billionaires Index.

This week, Revolut announced its 2023 financial results, revealing that its revenue nearly doubled to $2.2 billion. The timely release of these audited results could potentially aid the company in securing a long-awaited UK banking license, which has been delayed partly due to accounting issues.

Storonsky has allocated about $60 million to QuantumLight's fund. In a statement, he emphasized that the firm’s strategy enables more precise and faster decision-making than traditional human-led approaches. He expressed confidence that systematic strategies would play an increasingly significant role in the startup investment market. "These systematic strategies will command a meaningful share," he said. "Like Revolut is challenging the traditional banks, QuantumLight has ambitions to take on giants."

While quantitative investing has been influential in public markets for decades, it has rarely touched private assets due to the scarcity of publicly available data. This is changing as Wall Street firms seek advantages in the booming private equity and credit sectors. Companies like Ares Management Corp. and BlackRock Inc. are hiring quantitative analysts to gain a competitive edge.

QuantumLight mirrors this trend, having hired several data engineers among its roughly two dozen employees. Despite its innovative approach, the firm remains relatively small within the venture capital landscape. While many venture funds use AI models to evaluate potential deals, these tools are not as vital as an extensive investor network, according to Claudia Zeisberger, a senior affiliate professor of entrepreneurship at Insead business school. "Ultimately, in VC, money is not a differentiator. It’s the soft stuff, the door-opening and so on," she said.

QuantumLight positions itself as the “first truly systematic” venture firm, raising funds from other tech founders and family offices. Kondrashov noted that portfolio companies benefit from a "playbook" derived from Storonsky's experience of transforming Revolut from a small prepaid debit card business into one of Europe’s most valuable startups, offering a range of financial services including bank accounts, money transfers, and stock trading.

A Cambridge University graduate and former Goldman Sachs Group Inc. analyst, Kondrashov previously founded his own UK fintech company, Kriya. He emphasized that Storonsky remains a pivotal figure at QuantumLight. "He’s part of all the major decisions," Kondrashov said.

The two first met at a pre-pandemic dinner for entrepreneurs in central London and reconnected as Storonsky began building QuantumLight in 2022. The fund, which made its first investment in July 2023, typically allocates about $5 million per deal. Kondrashov anticipates a consistent investment pace over the next three years with no immediate plans to raise additional funds. "We are probably going to be adding roughly a deal a month," he noted. "We raised all the capital that we need."

As QuantumLight continues to forge ahead with its AI-driven investment strategy, the venture capital industry will be watching closely to see how this innovative approach reshapes the landscape.