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ECC Company Review - Revolut

Revolut is a #Fintech company founded in 2015. Nikolay Storonsky, a British-Russian entrepreneur founded Revolut. It offers banking services including GBP and EUR bank accounts, a Master card prepaid debit card or a Visa debt card, free of cost currency exchange, peer to peer exchange, stock trading and crypto currency exchange. Revolut is one of the fastest growing Fintech start-ups. It’s now one of a wave of new mobile app-based challenger banks which offer banking services without a costly network of physical branches. It now has a customer base of over 10 million users, with customer growth climbing over 150% in 2019.


Revolut had announced its long-awaited $500m Series D at a $5.5bn valuation, making it the most highly valued fintech in Europe. In just under two years, the London-based fintech has more than tripled in price, having been valued at $1.7bn at its April 2018 raise. Revolut’s valuation follows a similar logic to Plaid, the US fintech recently acquired by Visa for $5.3bn. Plaid is making revenues of $100m-200m according to Forbes, which is in line with Revolut’s own projected income stream of around £170m which is three times the £58.2m it reported in 2018. Revolut’s new valuation will raise eyebrows as for a long time the whole fintech space has been accused of being a price bubble, buoyed by investors who make backroom deals to make their shares and exit agreements more appealing. Revolut’s valuation should also be put into context against its peers i.e. N26, Starling and Monzo which are all priced between $1bn and $3.5bn. Revolut leads in terms of downloads, deposits and revenues even when adjusted for time. This metrics could justify its higher valuation.


But it’s noteworthy that Revolut which is still making losses is priced more highly than its profit-making peers. Regardless, Revolut has come a long way since its seed round pitch. Now the question is not if the company will resign #growth in favour of #profitability, but when.


Article by DHAPOLA Abhimanyu Singh - abhimanyusingh.dhapola@edhec.com

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