Fintech funding continues to grow at a rapid pace, resulting in drastic changes in how consumers spend and manage their money. In the latest development, Revolut – the London-based financial “superapp” that provides banking, investing, currency transfer and other wealth management services to nearly 16 million users globally – confirmed this morning that it has raised $800 million. The company said that this Series E round of funding is worth $ 33 billion.
This makes Revolut the most valuable fintech outside the UK, as well as one of the largest privately-backed scale-up startups not only in Europe, but in the world. It’s following in the footsteps of Klarna, a buy-now-pay-later startup from Sweden, which is diversifying into a wide range of other services for consumers and the businesses that integrate it. Klarna raised $639 million last month, valuing just under $46 billion. Earlier this year in the US, Stripe had a valuation of $95 billion.
This latest Series E is being led by SoftBank Vision Fund 2 and Tiger Global, who appear to be the only backers in this round. This comes on the heels of rumors Revolut was picking up big earlier this month. Revolut was last picked up about a year ago, when it closed the Series D at $580 million, but what’s surprising is how much its valuation has changed since then, growing 6x (it was $5.5 billion last year). dollars).
Nikolay Storonsky, Founder and CEO of Revolut, said in a statement, “The investments from SoftBank and Tiger Global are an endorsement of our mission to build a global financial superapp that enables customers to manage all their financial needs through a single platform. enables.”
As another point of reference, when Revolut reported financial data for 2020 last month, it noted that it earned $361 million in revenue (£261 million) in the fiscal year, an increase of 57% versus 2019 revenue. $229 million (£166 million) gross profit was $170 million (£123 million) in the previous year period, although it is still running on a net loss, with Q1 2020 at $76 million (£55 million). is racking up an adjusted operating loss of $277 million (£200.6 million). ) in operating losses for the whole year. In other words, the big money being placed now, and this big valuation, are long-term bets.
Revolut now has over 16 million customers and sees over 150 million transactions/month, and the plan will be to bring a wider range of services and promotions to grow that base, and give its users more money and time in the app. You have to get to install. . This will likely include exploring new areas such as insurance and a deeper dive into investment and trade, and a significant increase in credit services (which has been a major growth engine for other Neobanks and fintech companies). It said that Revolut is doing more to build its user base in the US and India.
Like other “Neobanks” that have emerged in recent years, Revolut is built around the idea of harnessing the already built banking and financial services infrastructure, which it uses via APIs and integrates into its service. . Revolut then focuses on creating a slick and user-friendly experience within its app and with its customer service.
Its technology focus is to improve service personalization, and to create new tools that are not commoditized, such as budgeting tools and other financial management features.
Scott Schleifer, partner at Tiger Global, said in a statement, “We believe Revolut’s focus on superior customer experiences and rapid product development puts the company in a strong position to continue scaling in both existing and new segments. Has been.” “We are excited to partner with Nick and the Rivers team as they build the next generation of financial services.”
This has particularly attracted younger users, who are not only more comfortable using digital services, but will be less experienced in all things finance.
But it will be interesting to see how and if Revolut brings more core financial infrastructure to its apps, or whether embedded finance reigns supreme.
Meanwhile, investors believe its current model has plenty of room for the technology to evolve.
“Revolut’s rate of innovation has redefined the role of financial services, [Revolut] At the forefront of Europe’s nascent neobanking sector. The company’s rapidly growing user base reflects continued demand for Revolut’s expanded suite of services,” said Karol Newyadomski, senior investor at SoftBank Investment Advisors, in a statement. “We look forward to supporting Nikolay and the team in continued product innovation and bringing our services to new markets globally.”