Revolut marches on despite mounting losses at the company

22 Jun 2021

Image: © Proxima Studio/Stock.adobe.com

Chief executive Nikolay Storonsky said ‘nothing is happening at the moment’ when it comes to further funding.

Revolut’s financial results for 2020 have provided the clearest view to date on how the pandemic has impacted one of fintech’s biggest companies.

It’s a mixed bag. Revenue was up 57pc to £261m and user numbers spiked, but losses are also mounting. It booked total comprehensive losses of £168m for the year ending 12 December 2020, an increase from £107m the year prior.

The company added that it made a gain of £38.7m on cryptocurrencies – the company provides crypto trading features – thanks in large part to the soaring value of bitcoin and other cryptocurrencies last year.

Despite the economic challenges of 2020, Revolut moved ahead with further international expansion, most notably launching in the US and Japan. The former in particular is a capital-intensive endeavour, where the start-up faces a great deal of competition from local fintech players as well as its British peer Monzo.

This year, the company said in a statement, is focused heavily on the US.

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Such investments raise the question about whether Revolut, last valued at $5.5bn, will be seeking further funding from backers. Bloomberg reported that the London-based company is seeking to raise funds that will value it at $20bn.

Speaking to CNBC this morning (22 June), chief executive Nikolay Storonsky said that the company is “always in conversations with investors, but nothing is happening at the moment”.

Revolut derives revenue from interchange fees and subscription services. The latter is emerging as a key business model for fintech players, with rival N26 pushing its premium features strongly.

According to Revolut, subscriptions to its Metal and premium services increased by 51pc last year with the proportion of new customers upgrading to paid tiers at 14pc, up from 11pc.

Its business accounts increased to 500,000 in 2020 as the company rolled out more features for business throughout the year. It launched business accounts in the US this year too.

It is part of a wider expansion beyond payments for the company. Recently Storonsky said that Revolut is looking into offering loans and credit cards in the Irish market.

Jonathan Keane is a freelance business and technology journalist based in Dublin

editorial@siliconrepublic.com