In the unicorn series "Blessed by BlackRock SoftBank, how did Klarna, the "European Flower" with a valuation of 45.6 billion, come about? In the article, we mentioned that the online payment market is getting bigger and bigger. According to FinTech Report 2021 – Digital Payments released by Statista, the global digital payments market size will be $5,474.6 billion in 2020 and $105203 billion in 2025, with a compound annual growth rate of 14%.
Just seven years after its inception, British digital banking giant Revolut has become one of the world's leading unicorns.
Based on the latest valuation, the company has become the world's fourth-largest fintech unicorn, after Ant Group, Stripe, and Klarna, according to Crunchbase. As the UK's largest unicorn, Revolut's valuation surpasses that of Britain's established bank NatWest.
How did Revolut create such a growth myth? Unicorn Encyclopedia, Wealth Express; Listen to my three-inch tongue, multiply and long song: next take you into the story of Revolut.
The founding process
People often have to pay high currency conversion fees, handling fees and exchange rate differences when people go abroad, which are generated by the banking settlement and clearing system, but these costs are borne by customers.
On July 1, 2015, Nikolay Storonsky and Vlad Yatsenko co-founded Revolut to address the high cost of foreign exchange.
Nikolay Storonsky and Vlad Yatsenko
Nikolay Storonsky has said they are trying to build a financial firm that is "10 times better and 10 times cheaper." （The reality of what we’re trying to achieve is to build a ten times better financial services company that is ten times cheaper as well.）
Corporate business
Revolut mainly provides digital bank accounts and a variety of other financial services, and currently supports the transfer and exchange of a variety of international currencies such as gbp, US dollar, euro, Australian dollar and Singapore dollar, and its users can transfer and spend money through a variety of channels, as well as trade other innovative financial products.
Revolut supported regions (image source website)
Revolut's innovation is that it can be used globally and managed in multiple currencies at the same time, Revolut accounts can complete online shopping, deposits, transfers and other transactions on a global scale, and with the help of physical cards, they can withdraw money at VISA-enabled ATMs around the world and register through mobile phones. Revolut benefits users around the world who need to travel overseas, especially young people who love mobile phones, thus saving time and saving transaction costs.
This business is at the heart of Revolut, and through its partnership with Mastercard, Revolut's services are able to cover the world. In the mobile app, users can also apply for a physical card, the Revolut card is a prepaid card with the Mastercard logo, so it is necessary to deposit a sufficient amount of money before spending. In addition, its exchange rate uses the interbank exchange rate, which currently supports real-time conversion of 30 currencies and consumption of more than 150 currencies.
Image source: official website
Now That Revolut has gradually become a virtual bank, it has launched a number of services such as deposits, travel insurance, personal butlers, etc., effectively replacing the daily business of many traditional banks, which is more attractive to young people who like new technologies. On the enterprise side, Revolut also provides convenient financial services for small and micro enterprises and self-employed households, including budget management, salary payment, etc., improving efficiency and saving employers' foreign exchange costs.
Company valuation
Since July 2016, Revolut has conducted a total of more than a dozen rounds of funding. The main investors are SoftBank, Index Ventures, Molten Ventures, Seedrs, Ribbit Capital and so on
Several financings that are highly concerned by the market include:
On 14 July 2016, Revolut Ltd. received a Series A round of financing led by Balderton Capital.
On July 11, 2017, Revolut Ltd. received a $66 million investment led by Index Ventures.
In July 2021, Revolut completed a $800 million Series E financing for SoftBank.
Revolut has been favored by the capital markets since its inception, valuing $1.8 billion in a Series C funding round in 2018 and reaching the level of another fintech darling, TransferWise, in just three years.
In 2021, after being injected $800 million by venture capital institutions such as SoftBank, its valuation reached $33 billion. For the funding, Revolut Chief Financial Officer Mikko Salovaara said the company does not need to raise capital at this time, but "the environment for raising funds is very good", so the company decided to take advantage of it.
Financial Position
Revolut's user growth has been considerable. Except for the stagnation of user growth caused by the NEW CROWN epidemic in 2020, there has been a high growth rate in the rest of the time.
Revolut is in good shape and its revenue is growing rapidly. Due to the impact of the new crown pneumonia, the company's loss in the first half of 2020 expanded rapidly, resulting in an increasing annual net loss. But the company's earnings report shows it has broken even in November 2020 and achieved profitability in the last two months of 2020.
Listing rumors
After raising $800 million in August 2021, Revolut's chief financial officer, Mikko Salovaara, said that after completing this huge financing and raising a lot of money, Revolut does not plan to go public immediately, and the possibility of a first IPO this year is extremely unlikely.
But Nikolay Storonsky, CEO and founder of Revolut, said the company's revenue would add "billions of dollars" more or consider an IPO. He reiterated that Revolut has always aimed to go public in the UK and the US, and possibly both.
Given that the company's 2020 revenue has reached £222 million ($301 million), combined with the company's growth trend, this target does not seem difficult to achieve.
If Revolut is successfully listed in the UK, it will become one of the most valuable companies on the London Stock Exchange.
Have cattle lovers used Revolut? Its emerging form of financial trading, are you optimistic about its development prospects? If britain's biggest unicorn went public, would you invest? Welcome to the discussion below.