British fintech company Revolut is in talks to sell existing shares, aiming for a valuation of over $40 billion. If confirmed, this would make Revolut Europe’s most valuable start-up, surpassing Germany’s Deutsche Bank and Britain’s Barclays. The company, founded by Nikolay Storonsky in 2015, earns revenue from payments, subscriptions, and customer trading of stocks and cryptocurrencies. Despite waiting over two years for a UK banking license, Revolut’s growth trajectory remains impressive. It would leapfrog Barclays and NatWest, approaching Lloyds in value. This valuation represents a more than 20% increase from its 2021 valuation of $33 billion. Start-ups have faced funding challenges, and Revolut has also dealt with regulatory scrutiny over its accounting practices. However, its customer base of 40 million globally positions it as a major player in the fintech landscape1.
Market Correction and IPO Uncertainty
The European fintech industry has seen valuations decline after a funding boom in 2021, which reached a historic high of $238.9 billion. As capital tightened, valuations adjusted accordingly. Meanwhile, the European IPO market faces political uncertainty. Italian brand Golden Goose and Spanish retailer Tendam recently postponed listings due to market conditions influenced by the snap French elections. Revolut has considered an IPO but has yet to proceed. Additionally, the company has sought a UK banking license to expand operations domestically, although auditors faced challenges verifying revenue figures in its 2021 accounts1.
Revenue Growth and Future Projections
Revolut’s revenue has been rising rapidly, reaching a record $1.1 billion in 2022. While cryptocurrency trading drove revenue in 2021, interest income growth played a significant role in 2022. The company’s 2023 figures are yet to be published, but Revolut expects revenue to exceed $2 billion. Despite its small customer deposit base compared to traditional banks, Revolut’s revenue per customer remains high. With 40 million customers globally (including 9 million in the UK), Revolut continues to disrupt the financial industry and position itself as a major player1.
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