Revolut $60b valuation to surpass European banks

Good morning. Here's what happened overnight and what you need to know today.

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1.

Revolut riches: UK fintech Revolut is aiming to become Europe’s most valuable start-up with a valuation exceeding USD40 billion ($60 billion) as part of a share sale, the Financial Times reported. The SoftBank-backed company is working with Morgan Stanley to sell about USD500 million worth of existing shares, including those held by employees, the paper reported citing unnamed sources. The expected valuation, up from the USD33 billion value it hit in 2021, would exceed major UK and European banks like NatWest and Société Générale. The company, founded by Nikolay Storonsky and Vlad Yatsenko in 2015, has around 40 million global customers and has been trying for years to secure a UK banking licence. (Financial Times)

2.

BoE balancing: The Bank of England (BoE) maintained its key interest rate at a 16-year high of 5.25% for the seventh consecutive meeting on Thursday, though some members of its Monetary Policy Committee called the decision “finely balanced.” BoE Governor Andrew Bailey welcomed the “good news” that May inflation had returned to its 2% target for the first time in nearly three years but said it was too soon to cut rates. Two members of the committee voted for a 0.25 percentage point cut to a less restrictive rate of 5%. Traders interpreted the meeting minutes as signalling a growing likelihood of a rate cut, with odds for an August reduction rising to over 50% from 32% before the meeting, according to Bloomberg. A potential rate cut later this year will come too late for Prime Minister Rishi Sunak, as his Conservative Party, significantly trailing the Labour Party in pre-election polls, faces the electorate on 4 July and the BoE is not due to meet again until 1 August. (Bank of England release) (Capital Brief)

3.

Map my timber: The US has urged the European Union to delay implementing a new deforestation law that, from 30 December, requires proof that imports like cocoa, soy, timber and sanitary products are not linked to deforestation. The law mandates geolocation data to confirm imports are deforestation-free and aims to transform voluntary pledges to halt deforestation—made by countries including the US—into action. In a 30 May letter to the European Commission, US commerce and agriculture officials argued the regulation would pose “critical challenges” to American producers, the Financial Times reported. “We therefore urge the European Commission to delay the implementation of this regulation and subsequent enforcement of penalties until these substantial challenges have been addressed,” the letter states. The request follows similar appeals from palm oil producers like Indonesia and Malaysia, top soy exporter Brazil, and from several agriculture ministers within the EU itself. (Financial Times) (Reuters)

4.

TikTok battle: TikTok's attorneys argued in court that the Biden administration's law forcing the sale or ban of the video app by 19 January is unconstitutional and should be overturned. In a court brief marking the start of the high-profile legal battle between the US government and the Chinese platform, TikTok largely reprised previous arguments that the law violates Americans' First Amendment rights, the Washington Post reported. TikTok tabled previously undisclosed negotiation documents, claiming the US government was not operating in good faith. This included a 100-page draft national security agreement offered in August 2022, giving federal officials extensive control over TikTok’s US operations, including a nationwide kill switch for security threats. The Biden administration declined that offer, citing insufficient resolution of concerns without detailing reasons. The briefs kick off a fast-tracked schedule for the case, with oral arguments slated to begin on 16 September and a ruling expected by 6 December. (The Washington Post)

5.

Insta exposed: A Wall Street Journal investigation found that Instagram recommends sexual content to teenage users, including those as young as 13, within minutes of account creation. Tests conducted over several months revealed that Instagram's algorithm pushed adult-oriented material to minors, despite Meta's recent claims that it offers age-appropriate experiences by restricting “sensitive content” to minors. A spokesman for Meta dismissed the findings as unrepresentative of teens’ overall experience, stating their efforts to limit sensitive content were ongoing. The journal’s findings aligned with Meta’s own previously undisclosed internal research indicating similar issues, the paper said. The test results found TikTok and Snapchat did not show such content to new teen accounts. (Wall Street Journal)

6.

Kaspersky ban: The Biden administration is set to ban the sale of antivirus software from Kaspersky Lab due to risks from the cybersecurity company’s ties to the Russian government, according to Reuters. The publication cited sources saying the multinational company will be put on a US trade restriction list, blocking sales, downloads of software upgrades, sales of white labelled products and any licencing of its products from 29 September. The move is aimed at preventing potential Russian cyberattacks and comes amid concerns that Kaspersky software could facilitate data theft, enable malware installation, and compromise security by withholding updates. Kaspersky reported generating USD752 million ($1.13 million) in revenue in 2022, serving over 220,000 corporate clients across approximately 200 countries. Notable customers include Italy’s Piaggio, Volkswagen's retail division in Spain, and the Qatar Olympic Committee, according to a corporate profile. (Reuters)

7.

Claude clout: Anthropic, the AI startup backed by Google and Amazon, has launched its newest AI model, Claude 3.5 Sonnet, just three months after introducing its Claude 3 series. The latest AI model outperforms its predecessor, Claude 3 Opus—which CEO Dario Amodei in March called the "Rolls-Royce of models"—in benchmark tests, operates at double the speed, and costs software developers only a fifth of the previous price. AI “models are a bit more fungible than cars," Amodei told Reuters. "I don't have to buy them and hold onto them for 20 years. That's one advantage of our field." The startup also introduced a group subscription plan aimed at enhancing collaborative work and a new “Artifacts” setting that organises user-generated content. The Claude 3.5 Sonnet is available for free. Like competitors OpenAI, Google and others racing to advance AI, Anthropic plans to release more models this year, including its Claude 3.5 Opus. (Reuters)

8.

Sizzling summer: Extreme heatwaves are impacting millions worldwide as summer begins in the northern hemisphere, with record temperatures causing widespread health emergencies. In Saudi Arabia, over 530 Egyptians died during the Hajj pilgrimage due to temperatures rising above 51°C. In the US, 86 million people are under heat alerts, with New York City opening cooling centres. India’s New Delhi on Wednesday experienced its hottest night in 55 years, with a reported temperature of 35.2°C at 1:00am local time. While Mexico, Greece, Serbia and other countries were also registering scorching temperatures. The World Meteorological Organization predicts an 86% chance that one of the next five years will eclipse 2023 to become the warmest on record, exacerbated by climate change. (Reuters)