Challenger Bank Revolut’s Losses Double As Costs Surge
Revolut, the challenger bank, and famed European unicorn lost £32.8 million ($40.3 million) in 2018.
The UK-based fintech reported a 247% jump in its cost of sales attributable to user acquisition costs, card scheme charges, and aggressive global expansion. However, revenue surged 354%. Revolut’s loss of £32.8 million ($40.3 million) in 2018 compared with a turnover of £58.2 million ($71.5 million) during that year.
A key competitor, Monzo, lost £47.2 million ($58 million) in the fiscal year ending February 2019.
Never mind Revolut’s loss; the bank on a path to ‘viability.’
The company’s expenses grew less sharply compared to its revenues.
“We’re generating a good contribution from each customer,” said Richard Davies, Revolut chief operating officer. “Then you’ve got an active choice about how much you want to invest in continuing the growth.”
Revolut is likely to triple revenues again this year. According to the company, the strident growth in turnover demonstrated its ultimate viability. But losses were expected to continue till such time the company was expanding internationally.
Despite Revolut’s loss, its adding services
Revolut offers a bouquet of mobile-based digital financial services, including currency exchange, budgeting and person-to-person (P2P) payments, all linked to a Visa card.
On Monday, Revolut announced a partnership with Visa to expand into 24 new markets, including the U.S. and Canada. As a result of this tie-up, Resolut would boost headcount by 3,500, taking it to a total of 5,000 employees.
Last month, Revolut launched a commission-free online brokerage service. Customers can buy popular US stocks, or even fractions of them, for as low as $1.
Fintech startup Revolut may raise funds again
Founded in 2015 by Nik Storonsky and Vlad Yatsenko, Revolut has so far raised $340 million. Investors include Index Ventures, Ribbit Capital, and Balderton Capital.
It may go for a fresh bout of fund-raising later this year, which could be as much as $500 million.
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