Revolut experiences first full 12 months of revenue


The all-in-one fintech app Revolut has launched its annual report for 2021. Whereas 2021 ended greater than a 12 months in the past, this report consists of some vital figures as the corporate practically tripled its income between 2020 and 2021. Due to this explosive development trajectory, the corporate reached profitability for the primary time.

Revolut’s monetary success begins on the prime of the funnel. On the finish of 2021, Revolut had greater than 16 million clients, representing a 46% improve in comparison with 2020.

Revolut’s core product is an account to ship, maintain and obtain cash mixed with a cost card. Whereas Revolut has but to acquire a banking license within the U.Okay. (its residence nation), the corporate now has a full banking license in Lithuania.

It might probably use this license throughout the European Financial Space by way of passporting guidelines, which implies that Revolut may very well be thought-about as a financial institution in Europe. Along with these primary banking options, the corporate presents a ton of fintech merchandise — however extra on that later.

First, let’s have a look at the large figures and convert them to {dollars} utilizing immediately’s change charge:

  • In 2021, Revolut generated $769 million (£636 million) in income vs. $266 million (£220 million) in 2020.
  • In 2021, Revolut reported a internet revenue of $31 million (£26 million) vs. a internet lack of $270 million (£223 million) in 2020.
  • Gross margin additionally jumped from 33% to 70% between 2020 and 2021.

“We’ve achieved our first full 12 months of revenue and proven that we will speed up buyer development, at scale, and develop income throughout all of our product strains,” Revolut co-founder and CEO Nik Storonsky mentioned within the launch. “In 2021 we have been granted a full banking licence from the European Central Financial institution and welcomed tens of millions of recent clients. We additionally launched a number of new merchandise and noticed extra exercise from our buyer base.”

Every thing is shifting up and to the correct. In different phrases, issues are trying nice at Revolut proper now. That’s why the corporate managed to lift a $800 million funding spherical at a $33 billion valuation in the course of 2021.

Producing income from crypto buying and selling and different charges

Revolut’s income comes from a number of sources. Whereas clients can create an account totally free, customers need to pay some charges for some cash administration providers. Essentially the most enthusiastic clients also can select to pay for a premium subscription plan to waive some charges and entry further options.

On prime of that, Revolut generates income from interchange charges. Each time a Revolut customers pay for one thing with a card, retailers need to pay some card transaction charges. These charges are break up between the service provider’s financial institution, the cardboard scheme (Visa or Mastercard for instance) and the cardboard issuing financial institution (Revolut in that case). Whereas Revolut solely will get a tiny fraction of the transaction quantity, it may possibly add up when you could have tens of millions of consumers.

Income might be damaged down in three huge pillars:

  • Playing cards and interchange signify 23% of whole income ($180 million/£149 million).
  • Subscriptions signify 17% of whole income ($129 million/£107 million).
  • Overseas change and wealth providers signify 55% of whole income ($421 million/£349 million).

Whereas the primary gadgets are fairly simple to grasp, the final one consists of fairly just a few Revolut providers. Revolut began as a seamless international change app mixed with a multi-currency card. Revolut fees a minimum of 0.5% in change charges above a sure restrict totally free customers. For everybody (together with paid customers), there are further charges while you change cash on the weekend or if you end up exchanging an unusual foreign money.

Revolut additionally permits you to commerce cryptocurrencies, shares and commodities like gold and silver. For these monetary merchandise, Revolut fees some vital charges — between 1.49% and 1.99% for crypto transactions, between 0.5% and 1.5% for valuable metals.

2021 was a particular 12 months with a crypto increase that led to a spike in crypto transactions in addition to some renewed curiosity from retail buyers for shares. Bear in mind, 2021 began with the GameStop quick squeeze on WallStreetBets.

Whereas 2022 won’t look as dramatic as 2021, Revolut already shared a brief preview of final 12 months’s numbers. In 2022, the corporate’s income elevated as soon as once more to greater than $1 billion (£850 million). It’s a 30% improve, which is far decrease than the 189% improve in 2021. And but, many large-scale startups can be fairly proud of a 30% income bounce. Revolut now has 27 million clients.

Now, it’s time to stabilize the enterprise as Revolut did not launch its monetary statements on time. If the corporate needs to go public within the coming years, it should enhance its inside processes. That might additionally assist in relation to acquiring a banking license within the U.Okay.