Revolut: What is the banking app and why is it one of the UK's most successful FinTech start-ups?

What is Revolut? What is its current valuation and why is it one of the UK's most successful FinTech start-ups? (Pic: Revolut)

The London-based company recently announced that it had achieved even greater success with its latest funding round and new valuation following a rocky year of adapting to the economic volatility of the coronavirus pandemic.

Its latest valuation has placed it among some of the most successful British financial tech (FinTech) companies of all time, but it also means that its early investors and founders alike could be billionaires if the estimation of value is correct.

Revolut has seemingly gone from strength to strength since first launching in 2015, with one of the world’s largest technology and financial investment companies, SoftBank, joining as investors in its new funding round.

As the FinTech boom continues and shows extremely positive signs of growth for new start-ups emerging in the sector, here’s everything you need to know about Revolut – what it is, how it’s become so successful and its next steps.

What is Revolut?

Founded in 2015 by former Lehman Brothers trader Nikolay Storonsky and Vlad Yatsenko, Revolut describes itself as a ‘financial superapp’ allowing users to create an account for exchanging currencies, hosting debit cards, virtual cards, Apple Pay and letting users also trade stocks, cryptocurrencies and more financial assets.

It is one of many companies, like ‘buy now, pay later’ e-shopping company Klarna and mobile banking giant Monzo, which have ridden high on the growing demand from consumers for more convenient and tech-savvy solutions to manage their finances and banking on the go.

While Revolut saw huge financial losses pre-pandemic after it hired thousands more members of staff and propelled its growth, the same year also saw it become fully profitable and the UK’s most valuable FinTech company with a valuation of £4.2 billion.

What is Revolut’s latest valuation?

As of July 2021, Revolut’s 2020 valuation has grown even larger – with a series E $800 million (£579m) funding round seeing its value climb after bringing in huge international firms like Japan’s SoftBank and Tiger Global on board as new investors.

This funding round has boosted Revolut’s valuation to a whopping £24 billion, or $33 billion, making it the UK’s most valuable fintech or private tech company.

The company plans to use the money from it’s latest fundraising success to boost its appeal for US customers and establish itself in the Indian market.

Nikolay Storonsky, Founder & CEO of Revolut said, “SoftBank and Tiger Global’s investments are an endorsement of our mission to create a global financial superapp that enables customers to manage all their financial needs through a single platform.

"This funding round makes Revolut the UK’s most valuable fintech, demonstrating investors’ confidence that we can deliver products that raise the bar for customers’ expectations across the whole financial services industry.”

He added that plans for the ‘superapp’ would include increasing its offer and services to customers exponentially, adding greater layers of security, more personalisation in services and expanding its suite of in-app financial products.

Rishi Sunak, UK Chancellor of the Exchequer, also commented on the news of the sky-high valuation.

“It’s great news that Revolut has raised a further $800m and plans to expand even further – creating more jobs here in the UK,” Mr Sunak said.

“We want to see even more great British Fintech success stories like Revolut, which is why I’ve published a roadmap setting out how we will ensure the UK sector remains competitive, forward-looking, and dynamic.”

How did Revolut become so successful?

Observers of Revolut’s rise have said that its success lies in its ability to concentrate a variety of financial services in a single app – with an interface which is fairly straightforward, easy to use and adaptive to a range of customer needs.

It has emerged as one of the leading firms eclipsing traditional banking, fitting a new generation of digital users who have grown up with the internet and become reliant on smartphones and digital devices for managing their lives and finances.

During the pandemic, lockdown was also seen to have a huge impact on banking – with more users relying on digital and internet banking when local bank branches closed their doors across the country and reduced their operating hours nationwide.

One of Tiger Global’s partners, Scott Shleifer, said following their contribution to Revolut’s series E fundraiser that: “We believe Revolut’s superior customer experience and focus on rapid product development put the company in a strong position to continue scaling in both existing and new geographies.

"We are excited to partner with Nik and the Revolut team as they build the next generation of financial services.”

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