FinTech: Revolut Scoops Up Another $80M in the February Series D

July 27, 2020 | FinTech, News

TSG Consumer Partners is the new investor.

It’s as if the pandemic never happened for Revolut, the UK-based challenger bank, and fintech. It just got another $80 million in its Series D kitty from TSG Consumer Partners, the private equity company that focuses on consumer product companies and has AUM of $5 billion. (FT)

TSG’s investment came in at the same Round D valuation of $5.5 billion struck in February. That valuation tripled from its previous one of $1.7 billion in April 2018.

The $5.5 billion tag has remained unaffected by the virus even though the neobank’s card business took a severe hit from the pandemic. The bank is still unprofitable but hopes to be in the black by the end of the year.

TSG proposed Revolut accepted

Revolut Chief executive Nikolay Storonsky said the startup was not looking for extra capital beyond the $500 million it raised in a D round in February.

However, “TSG approached us with an exciting proposition to work together,” he told FT.

Since the last raising, Revolut has struck out beyond the Atlantic in a substantial U.S. foray. In March it rolled out its app-based services in the country, offering customers an account with a debit card within minutes using a smartphone. Its U.S. banking is backed for operations by Metropolitan Commercial Bank (NYSE: MCB). The FDIC, therefore, insures customers’ deposits up to $250,000.

Earlier this month, Revolut launched crypto buying and selling in 49 U.S. States through crypto brokerage Paxos Trust Company.

In May, Storonsky told FT that Revolut had a real opportunity to benefit from the pandemic and that he was on the hunt for corona-hit travel aggregators.

In the context of the TSG investment he said: “Given the current climate, we’re delighted to be in such a strong position to bring better banking services to people around the world.”

The online bank will use the money to grow its UK operations and its new rewards program.

Revolut having it good

Investors are favoring Revolut, even in such an uncertain economic climate. Other fintechs have not been so fortunate.

Last month, online challenger rival Monzo raised £60 million at a valuation of £1.25 billion, a 40% down round that brought the industry face-to-face with the harsh fallout from the virus outbreak. Analysts also said investors were suffering from “challenger bank fatigue.”

Related Story:  Revolut is Crypto Brokerage Paxos’ First US Client                                                  

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