The British neobank claims 10 million users worldwide, including nearly a million in France.
Fundraising at $ 500 million: check. Revolut announces a mega round table led by the American fund TCV (Airbnb, Facebook, LinkedIn, Netflix…) alongside existing investors, without specifying which ones. Its latest fundraising of $ 250 million in April 2018 was led by the Russian fund DST Global, alongside Index Ventures and Ribbit Capital. In total, the British neobank has raised more than $ 836 million since its launch in 2015. This new round is not a surprise. “We want to raise at least $ 500 million in equity and potentially, at a more advanced stage, up to $ 1 billion in convertible debt”, said his boss, Nikolay Storonsky, at Reuters last November.
This funding it values $ 5.5 billion, two billion more than its German competitor N26, whose last round in July 2019 amounted to $ 170 million. Revolut thus becomes the second most valued European fintech, tied with Swedish Klarna, specializing in split payment. The number one spot is still allocated to the Dutch payment provider Adyen (25 billion euros), listed on the stock exchange since June 2018. Revolut is now playing in the court of the (big) Americans since its counterpart Chime, which raised 500 million of dollars at the end of 2019, is valued at 5.8 billion dollars and the Brazilian Nubank (400 million dollars raised in July 2019) reached a valuation of 10 billion dollars.
“46% of Revolut users use their account every month and 14% daily”
This round table will allow him to continue his insatiable conquest of customers. The neobank targets 100 million users worldwide by 2023. Today, it claims 10 million. They were 8 million in October 2019. But these figures are in perspective since only 46% of its users use their account each month and 14% daily (figures dating from October 2019). Like many mobile banks that offer a free offer, Revolut is struggling to become a master account. Consumers still remain attached to their traditional banks which provide more and more functionalities from neobanks and play on the fiber of security (although Revolut also has a banking license). “We will now focus on the deployment of banking operations in Europe, the increase in the number of people using Revolut in current account“Nikolay Storonsky said in a statement.
To increase its user base, Revolut is counting on its international expansion, notably in the United States, whose launch took place at the end of 2019. It has to face several American neobanks but also N26, present across the Atlantic since July 2019 , in partnership with Axos Bank. In total, London fintech is present in 36 countries, including 31 countries in the eurozone. Revolut should also launch in Latin America and other Asian countries (it has been in Singapore since the end of 2019) but has not yet specified a date.
This funding will also allow him to hire en masse. Last September, the start-up announced that it would recruit 3,500 people by summer 2020 to reach the 5,000 mark. It currently has 2,000 employees in 23 offices. A real challenge for this neobank who has been criticized for its aggressive HR methods and unconventional recruitment methods, as a great investigation from The Wired has shown.
This new round will also serve to improve the user experience of the application and develop new offers such as the ready to individuals and businesses. Revolut already offers consumer credit in the United Kingdom through a partnership with the personal loan platform Lending Works. The neobank also plans to offer its savings account at 1.35% (in partnership with Paragon Bank) outside the United Kingdom. New functionalities are also in preparation for the two paid versions of the neobank.
This diversification becomes essential for this fintech which still generates little income. Of its £ 58.2 million in turnover in 2018 (€ 69.4 million), 71.1% came from interchange fees and the use of the card, according to his latest financial report. The remaining 28.9% therefore comes from its premium offers, business accounts and other services (purchase of cryptocurrencies for example). Admittedly, its turnover increased by 355% between 2017 and 2018 but its losses jumped by 122% over the same period, reaching 32.8 million pounds sterling (39.1 million euros). In a press release, Revolut says “seek profitability”.
In France, Revolut continues its little way and should soon pass the bar of a million users, thus catching up with N26 which reached this threshold last October. Hexagon is Revolut's second market, behind the United Kingdom. However, the number of active monthly and daily users is not shared, as is the cost of acquisition. Revolut spends very little on marketing (mainly on social networks) unlike its German competitor who displayed in the Paris metro and has boosted its digital marketing in recent months.
This almost nonexistent budget will increase in 2020 since the French office has just been strengthened. A new manager from France and the Benelux took up his duties at the end of 2020, while this position remained vacant for almost 18 months. Seven people occupy the Paris office located in a Wework including business developers and marketing managers. The team in charge of French customer service is based in London. Objectives of the French office: continue to grow the user base, individuals and businesses (it has several tens of thousands of corporate clients in France) and remain “open to local partnerships. This is a growth axis”, indicated Georges Nilles , head of growth France and Benelux, last January.