Revolut was crowned Britain’ most valuable fintech as it completed an US$800mln funding round that gave it a price tag of US$33bn.
The banking and payments apps raised the money from two cornerstone investors – Softbank and Tiger Global - which despite their hefty investment own less than 2.5% of the business between them.
Revolut has not been without controversy since it was founded in 2015 by former Credit Suisse trader Nikolay Storonsky because of his annoyance about hidden bank charges, not least over alleged links to Russia earlier in its life.
The business now though has more than 16mln customers in 35 countries and ambitions to expand into the US, China and India using the money raised today.
Mikko Salavaara, chief financial officer, said the raised money would be spent on marketing and product development but would not affect plans to go public eventually.
“Eventually we will be a public company, but there are no immediate plans to list,” reported the Standard.
The value of today’s deal also raised eyebrows, as last year a fundraise involving US groups TCV and TSG Consumer Partners valued the digital bank at US$5.5bn.
But it has been a beneficiary of a surge in online activity and trading that has boosted transactions to more than 150mln per month allied to soaring values of private funding deals.
In May, Revolut said losses in 2020 had risen to more than £200mln as the group recruited heavily to cope with the surge in demand for its dealing and payment services, though it said it made a profit in the last two months.
The group has also struggled with compliance issues due to the speed of its expansion, but after the heavy investment in its systems is said to now be confident these have been addressed.
In a statement, Storonsky, said, “SoftBank and Tiger Global’s investments are an endorsement of our mission to create a global financial superapp that enables customers to manage all their financial needs through a single platform.
“This funding round makes Revolut the UK’s most valuable fintech, demonstrating investors’ confidence that we can deliver products that raise the bar for customers’ expectations across the whole financial services industry.”
The fundraise will be a boost for the UK government’s attempts to attract more fintech and technology-based companies to the UK and today’s funding was warmly applauded by chancellor Rishi Sunak.
“It’s great news that Revolut has raised a further US$800mln and plans to expand even further – creating more jobs here in the UK.
“We want to see even more great British Fintech success stories like Revolut, which is why I’ve published a roadmap setting out how we will ensure the UK sector remains competitive, forward-looking, and dynamic.”
Karol Niewiadomski, senior investor for SoftBank Investment Advisers, added “Revolut’s rate of innovation has redefined the role of financial services, placing [Revolut] at the forefront of Europe’s nascent neobanking sector.”