The all-in-one fintech app Revolut has released 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 progress trajectory, the corporate reached profitability for the primary time.
Revolut’s monetary success begins on the high of the funnel. On the finish of 2021, Revolut had greater than 16 million prospects, representing a 46% enhance 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 passporting rules, which implies that Revolut could possibly be thought of as a financial institution in Europe. Along with these fundamental banking options, the corporate gives a ton of fintech merchandise — however extra on that later.
First, let’s have a look at the massive figures and convert them to {dollars} utilizing at the moment’s change fee:
- In 2021, Revolut generated $769 million (£636 million) in income versus $266 million (£220 million) in 2020.
- In 2021, Revolut reported a internet revenue of $31 million (£26 million) versus a internet lack of $270 million (£223 million) in 2020.
- Gross margin additionally jumped from 33% to 70% between 2020 and 2021.
“We now have achieved our first full 12 months of revenue and proven that we are able to speed up buyer progress, at scale, and develop income throughout all of our product traces,” Revolut co-founder and CEO Nik Storonsky stated within the launch. “In 2021 we have been granted a full banking licence from the European Central Financial institution and welcomed hundreds of thousands of recent prospects. We additionally launched a number of new merchandise and noticed extra exercise from our buyer base.”
Every thing is shifting up and to the appropriate. In different phrases, issues are trying nice at Revolut proper now. That’s why the corporate managed to boost an $800 million funding round 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 prospects can create an account without spending a dime, customers must pay some charges for some cash administration companies. Probably the most enthusiastic prospects also can select to pay for a premium subscription plan to waive some charges and entry extra options.
On high of that, Revolut generates income from interchange charges. Each time a Revolut consumer pays for one thing with a card, retailers must pay some card transaction charges. These charges are cut 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 might probably add up when you’ve hundreds of thousands of shoppers.
Income could be damaged down in three large pillars:
- Playing cards and interchange symbolize 23% of whole income ($180 million/£149 million).
- Subscriptions symbolize 17% of whole income ($129 million/£107 million).
- International change and wealth companies symbolize 55% of whole income ($421 million/£349 million).
Whereas the primary objects are fairly straightforward to grasp, the final one consists of fairly a number of Revolut companies. Revolut began as a seamless overseas change app mixed with a multi-currency card. Revolut costs a minimum of 0.5% in change charges above a sure restrict without spending a dime customers. For everybody (together with paid customers), there are extra charges while you change cash on the weekend or if you find yourself exchanging an unusual foreign money.
Revolut additionally enables you to commerce cryptocurrencies, shares and commodities like gold and silver. For these monetary merchandise, Revolut costs 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 growth that led to a spike in crypto transactions in addition to some renewed curiosity from retail traders for shares. Keep in mind, 2021 began with the GameStop short squeeze on WallStreetBets.
Whereas 2022 may not 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% enhance, which is far decrease than the 189% enhance in 2021. And but, many large-scale startups could be fairly pleased with a 30% income leap. Revolut now has 27 million prospects.
Now, it’s time to stabilize the enterprise as Revolut failed to release its monetary statements on time. If the corporate needs to go public within the coming years, it must enhance its inside processes. That might additionally assist in the case of acquiring a banking license within the U.Okay.
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