Fintech
Revolut profits skyrocket as fintech eyes share sale deal that values firm at more than $40bn – The Irish Times
Revolution posted a better-than-expected profit of $428 million (€398 million) last year, as the London-based fintech weighs a share sale that would value it at more than $40 billion.
The profit beat CEO Nik Storonsky’s forecast for net income to come in at about $350 million, up from $7 million in 2022, marking a third straight year of profitability. The company’s revenue, which rose 95 percent to $2.2 billion, was also about $200 million higher than previously expected.
The filing comes three months ahead of the legal deadline. It marks the first time Revolut has not had to request an extension to file its annual accounts in years and is seen as an important signal as the company seeks a banking license from UK regulators that would allow it to expand its offerings in its home country.
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“We remain committed to our ongoing application for a banking license in the UK, as well as bringing the Revolut app to new markets and customers around the world,” Storonsky said.
Last year, the fintech needed a three-month extension to publish its 2022 annual accounts. And the company’s 2021 accounts were not published until March 2023, several months after the company’s already extended deadline. The group operates in the eurozone under a Lithuanian banking license and earlier this year came under the direct supervision of the European Central Bank due to its size.
The Financial Times reported last week that Revolut is targeting a valuation of more than $40 billion in a share sale that would cement its status as Europe’s most valuable startup. The SoftBank-backed company is working with Morgan Stanley to sell about $500 million of existing shares, including those held by employees, according to the report.
Revolut, co-founded by Mr Storonsky and Vlad Yatsenko in 2015, is Europe’s most valuable startup. It was previously given a valuation of $33 billion in a 2021 fundraise. The latest target, if met, would challenge a tough market for European fintech groups over the past two years, as valuations have been depressed by rising interest rates.
Revolut’s net interest income increased more than 500 percent to $621 million, driven by interest earned on excess money held with central banks, while card and transaction revenue jumped 59 percent to $605 million. Revenue from currency exchange and wealth products increased 46 percent to $491 million, while subscription revenue rose 53 percent to $303 million.
The company added nearly 12 million new customers globally last year, the highest number in 12 months since its founding, bringing its total to 38 million. Its base grew to 45 million in the first half of this year.
Customer deposits increased 41 percent to $22 billion, while the loan portfolio grew 159 percent to $680 million.
The number of customers in the Republic increased by 21 percent last year to 2.7 million, or about one in two people in the state. The company has aimed to increase its Irish customer base to more than 3 million this year.
Earlier this year, the company said it expected its global workforce to reach 11,500 by the end of 2024, which would represent a 40 percent increase from 2023.
— Additional reporting: Bloomberg