Digital banking startup Revolut has raised $500 million in its latest funding round, the London-based company has revealed. The funding round was led by American venture capital firm TCV which has participated in previous rounds. Revolut intends on channeling the funds towards creating new features for its users and expanding to other European countries.
Revolut has continued to challenge the legacy banking system, offering its users easily accessible and affordable digital alternatives. It also allows its users to easily purchase cryptos from fiat. The users can also send the cryptos, but only to other users on the platform. And with its funding round valuing the company at $5.5 billion, it’s now one of Europe’s most valuable startups, and the U.K.’s most valuable fintech startup.
We're excited to announce that we have raised a $500 million investment round. Looking ahead, we'll be focused on rolling-out banking operations in Europe, and building a bunch of new services for you all to enjoy. https://t.co/5ATiS15NHE
— Revolut (@RevolutApp) February 25, 2020
The company intends to use the money to expand its services from its bedrock market in the U.K. and into other European countries. The CEO, Nik Storonsky revealed just how ambitious the company is, stating in an interview that it’s targeting 100 million users in the next five years. It currently has 10 million users. To do this, the company intends on enrolling more employees, with Nik revealing that it will add 1,000 new employees this year alone to the 2,000 it already has.
Revolut will also work on enhancing the features on its platform for its daily users, he stated. He didn’t delve into its crypto plans, including whether it intends to add more cryptos to its roaster. It currently supports five cryptos, namely BTC, XRP, Ether, Litecoin and BCH.
Despite its high valuation, Revolut is yet to start being profitable. It last released its financial results in 2018, revealing that it had generated $63 million in revenue. This was a four-fold increase from the $16 million it had generated a year earlier. However, it made a loss of $42 million for the year, almost double the previous year.
Revolut’s loss making is perhaps a result of its freemium nature, with most of its services being free for its users. It generates revenue from products such as insurance and business accounts. Yet another crypto-friendly platform, Robinhood, follows a similar path. The American company supports Bitcoin SV and six other cryptos on its platform, alongside its zero-fee stock trading application which is its main offering. While its financial reports have remained under wraps, several reports indicate that it’s not yet profitable either. Robinhood is valued even higher than Revolut at $7.6 billion.
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