Hotly tipped banking startup Revolut lost £100m ($131m) last year even as customer numbers and revenue surged.
Accounts filed with Companies House this week show Revolut lost £106.5m in 2019, up from a loss of £32.8m in 2018. Revenue grew slower than losses, rising 180% to £162.7m.
Revolut saw customer numbers surge from 3.5 million to 10 million last year and now has around 13 million users globally. The company also has 220,000 business customers. Customers held £2.2bn on its cards by the end of 2019, up from £1bn at the end of 2018.
Revolut is a financial technology startup founded in London in 2015. The startup began life as a cheap foreign exchange card linked to an app but has expanded into everything from stock trading to savings and even cryptocurrencies. Management say the company’s goal is to build “a single global platform to serve all the financial needs of the modern consumer.”
The startup has grown rapidly and quickly become one of Europe’s most valuable private tech businesses. It was valued at $5.5bn in a funding round earlier this year.
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“While we still have some way to go, we are pleased with our progress in 2019,” founder and chief executive Nikolay Storonsky said in an emailed statement.
“We tripled our revenues, increased retail customers from 3.5 million to 10 million, increased daily active customers by 231% and the number of paying customers grew by 139%.”
Revolut’s core product is free but it charges for certain “premium” services, such as its high-end metal cards and business accounts. Subscription income rose almost 200% to £39.5m.
The majority of revenue come from interchange fees charged when customers spend on its cards abroad or at home. Revolut earned £102.6m on these tiny fees, which are charge on each transaction. 99% of revenue came from the UK.
COVID-19 has slowed Revolut’s growth and hit revenue due to “restrictions on customers ability to undertake travel and other expenditure.”
Revenue is rising in some parts of the business, however, such as its crypto exchange. The company held over £90m of cryptoassets on behalf of customers by the end of 2019.
“As a result, the group was very well capitalised entering the COVID-19 pandemic,” directors wrote in the accounts. The board said Revolut has a “comfortable level of headroom above its regulatory capital and liquidity requirements.”
“Despite the current economic challenges, we remain focused on our goal of moving towards profitability,” Storonsky said.
Staff numbers grew from 633 to over 2,200 as the company expanded around the world and opened new customer service offices across Europe.
Revolut disclosed in its accounts that it has helped the government during the pandemic by sharing data on how spending habits have changed across sectors during lockdown.
Revolut worked with collapsed German payments giant Wirecard until June. Revolut said its “risk management framework” allowed it to “recognise the increasing risk arising from our contractural arrangement with Wirecard” and gradually end the relationship a no cost to customers and “negligible” cost to Revolut.