Topline
Fintech giant Revolut, one of Europe’s most valuable startups, reported turning its first ever annual profit in 2021 on Wednesday, a major milestone for the company spurred on by soaring public interest in cryptocurrency and the shift to digital services during the Covid-19 pandemic.
Nikolay Storonsky is chief executive officer of Revolut, which announced its first annual profits on … [+]
Key Facts
London-based Revolut reported a profit of $31 million(£26 million) in 2021, bouncing back from losses of $269 million (£223 million) the year before.
Revenues for the year, $767 million (£636 million), were triple the company’s takings from the year before.
Revenues continued to rise in 2022, Revolut said, growing more than 30% to £850 million ($1 billion).
Revolut offers its customers debit cards and crypto services and benefited immensely from the surge of interest in cryptocurrency in 2021, and saying its crypto trading business accounted for around a third of its revenues.
The company, which celebrated hitting the 25 million customer mark in 2022, said retail customers grew from 11 million people at the start of 2021 to 16 million people by the end.
Revolut chairman Martin Gilbert said the year “marked a significant milestone for the company” that shows it has transitioned from being a start-up business “only focused on growth, to the ‘scale-up’ looking to grow profitably.”
What We Don’t Know
Though Revolut reported increased revenues in 2022, the company has not disclosed profitability from last year. The year, fraught with the economic fallout of Russia’s invasion of Ukraine and the Covid-19 pandemic, was not a good one for many companies, particularly tech. The collapse of the cryptocurrency market is likely to have been felt particularly keenly given its importance to Revolut’s revenues in 2021. The company’s chief financial officer, Mikko Salovaara, told CNBC crypto only accounted for between 5% and 10% of sales in 2022, a marked drop from nearly a third in 2021. In a press statement, Salovaara said it added more than 9 million customers in 2022 and continued to “focus on growth.” He boasted the company now has some 27 million customers, a figure that has more than doubled since the start of 2021. The company also doubled its headcount to 6,000 people in 2022, the executive said, noting the contrast to the layoffs made by many other companies. It is not clear why Revolut’s financial filing has come much later than expected, even when accounting for an approved delay.
Key Background
Revolut has grown rapidly since its founding in 2015. Though its value has climbed rapidly, the company has failed to turn a profit, largely on account of its relentless pursuit of growth. The company has been striving to break into foreign markets, particularly the U.S., and said it plans to launch in New Zealand, India, Brazil and Mexico in 2023. The company is facing a string of controversies surrounding its reportedly aggressive corporate culture, allegations it denies, and has been criticized for the late filing of its accounts. The company is reportedly close to securing a sought-after U.K. banking license, which would allow Revolut to hold deposits and make loans to customers.
Big Number
$33 billion. That’s how much Revolut was valued at in a 2021 funding round. The valuation made Revolut the U.K.’s most valuable fintech and it ranks as one of Europe’s most valuable startups.
Further Reading
Meet the British digital bank trying to conquer America (CNN)
Russian-Born Billionaire Behind Revolut Fintech App Publishes Anti-War Letter (Forbes)
Revolut’s Billionaire Founder Nik Storonsky To Launch AI-Led Venture Capital Fund (Forbes)
Source: https://www.forbes.com/sites/roberthart/2023/03/01/fintech-giant-revolut-boasts-first-ever-annual-profit-after-crypto-boom/