Fintech Giant Revolut Boasts First Annual Profit After Crypto Boom
Top line
Fintech giant Revolut, one of Europe’s most valuable startups, reported on Wednesday turning its first ever annual profit in 2021, a major milestone for the company spurred by growing public interest in cryptocurrency and the shift to digital services during the Covid-19 pandemic.
Keywords
London-based Revolut reported a profit of $31m (£26m) in 2021, back from a loss of $269m (£223m) the previous year.
Revenue for the year, at $767 million (£636 million), was three times the company’s earnings from the previous year.
Revenue continued to rise in 2022, Revolut said, growing by more than 30% to 850 million pounds ($1 billion).
Revolut, which offers its customers debit cards and crypto services, benefited greatly from the surge in cryptocurrency interest in 2021, saying its crypto trading business accounted for around a third of its revenue.
The company, which celebrated hitting 25 million customers in 2022, said retail customers grew from 11 million people at the start of 2021 to 16 million people by the end.
Revolut’s chairman Martin Gilbert said the year “marked a significant milestone for the company” showing it has moved from being a start-up “only focused on growth, to ‘scale up’ looking to grow profitably.”
What we don’t know
Although Revolut reported increased revenue in 2022, the company has not disclosed profitability from last year. The year, filled with the economic fallout from Russia’s invasion of Ukraine and the Covid-19 pandemic, was not a good year for many companies, especially technology ones. The collapse of the cryptocurrency market is likely to have been felt particularly strongly given its importance to Revolut’s revenue in 2021. The company’s chief financial officer, Mikko Salovaara, told CNBC crypto accounted for only between 5% and 10% of sales in 2022, a marked decline from nearly a third in 2021. In a press release, Salovaara said it added more than 9 million customers in 2022 and continued to “focus on growth.” He boasted that the company now has about 27 million customers, a number that has more than doubled since the start of 2021. The company also doubled its workforce to 6,000 people in 2022, the executive said, noting the contrast with the layoffs made by many others companies. It is not clear why Revolut’s financial filing has come much later than expected, even when taking into account an approved delay.
Key background
Revolut has grown rapidly since its founding in 2015. Although its value has risen rapidly, the company has not been able to turn a profit, mainly due to its relentless pursuit of growth. The company has been trying to break into foreign markets, particularly the United States, and said it plans to launch in New Zealand, India, Brazil and Mexico in 2023. The company faces a number of controversies over its allegedly aggressive corporate culture, claims it denies , and has been criticized for late submission of the accounts. The company is reportedly close to securing a coveted UK banking license, which would allow Revolut to hold deposits and make loans to customers.
Big number
33 billion dollars. That’s how much Revolut was valued at in a funding round in 2021. The valuation made Revolut the UK’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 launches AI-led venture capital fund (Forbes)
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