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Revolut's crypto holdings explode to half a billion

The Revolut card. Photo: Revolut
The Revolut card. Photo: Revolut

Revolut, the fast-growing and buzzy UK fintech startup, now holds over half a billion pounds worth of cryptocurrency on behalf of customers, accounts reveal.

Revolut's annual accounts, which were shared with the press this week, show the startup held £537m ($742bn)-worth of cryptocurrency on behalf of its clients at the end of 2020. Holdings grew more than five fold from £93m at the end of 2019.

The jump in crypto holdings came amid a revival in interest in the market towards the end of 2020. The price of bitcoin began rallying strongly in October, amid an uptick in interest from institutional investors. The momentum continued into 2021 and the price of bitcoin peaked at more than $64,000 in April, before halving.

Read more: Bank challenger Revolut launches £2.99-a-month Plus service

Revolut began offering crypto investment and trading services to its 15 million clients in 2017, just as the last crypto boom was cooling.

Surging crypto investment through the app last year helped to flatter the company's top line. Revolut reported a 57% jump in adjusted revenues to £261m, including a £39m gain from crypto appreciation.

Exploding crypto revenue helped Revolut weather a downturn in its core business of card transactions. Lockdowns from March onwards let to a collapse in card spending, which hit revenues.

The company pivoted to pushing subscription services such as metal cards, wealth management, and business accounts. Revolut had half a million business customers by the end of 2020.

Read more: Revolut applies to become a UK bank

"We increased our efforts to diversify our revenues, reducing the reliance on interchange and international travel and developing tools and services to facilitate consumer adoption of digital financial management," Martin Gilbert, Revolut's chairman, wrote in the accounts.

"Our revenue growth through the year reflected the increasing relevance of our product mix, the attractiveness of subscriptions and our continued customer growth."

The ructions of COVID-19 still meant losses grew by 57% to £168m. The company pointed to improving momentum as the year wore on — operating losses dropped from £55m in the first three months of 2020 to just £6m in the final three months.

Revolut founder and chief executive Nikolay Storonsky. Photo: Revolut
Revolut founder and chief executive Nikolay Storonsky. Photo: Revolut

"Revolut entered its next phase of growth in 2020 as we broadened our global footprint, strengthened our capital base, enhanced governance and bolstered executive management," Gilbert said in a statement.

"These developments continue to provide a strong platform from which to launch new products to serve our rapidly growing customer base."

Read more: Revolut raises $500m in funding, valuing London fintech at $5.5bn

Revolut was founded by two former investment bankers in 2015 as a foreign exchange card linked to an app. The startup has since expanded rapidly into all manner of other financial services — everything from trading to bankings and insurance. Founded in London, it has also expanded rapidly around the world and now has operations in over 35 countries.

Customer numbers grew 45% last year to 14.5m and deposits near doubled to £4.6bn.

Nikolay Storonsky, Revolut's founder and chief executive, said the business was now "more resilient and productive". The company shared unaudited numbers pointing to continued strong momentum in the business at the start of 2021, particularly within trading. Revolut launched dogecoin (DOGE-USD) trading earlier this month.

Revolut raised over $500m last year in a valuation of $5.5bn and is said to be plotting another fundraise that would value the business at as much as $15bn. The company is targeting expansion in the US and India this year. The company applied for a full UK banking licence in January.

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