Revolut’s losses treble to £104.7m after year of rapid growth
Revolut’s losses trebled in 2019 to £104.7 million, following a year of rapid growth which saw the UK challenger hire 1,628 more staff, as well as launch in the US and Singapore.
Up from £32.8 million in losses the previous year, Revolut’s 2019 financial results fit into the pattern of its UK competitors.
Starling Bank’s losses doubled to £52 million in 2019, whilst Monzo’s losses more than doubled to £113.8 million the same year.
Nikolay Storonsky, founder and CEO of Revolut
Revenue surge
But all these challengers have managed to claw up their revenues. Revolut’s was up to £162.7 million in 2019 from £58.2 million in 2018.
This is arguably the most impressive increase of the bunch. The 180% jump is over £100 million more than its rivals raked in through the same year.
It also falls about £17.3 million shy of its target revenue for 2019, which was £180 million.
For comparison, Monzo’s revenue increased to £56 million in 2019 from £13 million in 2018. Starling’s was up to £14.2 million the same year from £750,000 in 2018.
Whilst Revolut’s losses have burgeoned in growth, so has its revenue. CEO Nik Storonsky was confident as recently as May that the fintech could still break even this year.
But more than 60% of Revolut’s income came from interchange fees in 2019, a margin significantly hampered this year due to the lack of travel during the pandemic.
A closer look at customer growth
Revolut nearly tripled its customer base from 3.5 million in 2018 to ten million at the end of 2019. It also acquired around 220,000 business accounts in 2019, a 260% increase year on year.
The fintech’s daily active user base grew by 231% between 2019 and 2018. It had around 1.1 million daily active users at the end of last year, making up around 10% of its entire user base.
The challenger stressed its focus on driving user activity following its $500 million mega funding round in February. It said it had “a particular focus on product development that will help accelerate daily usage of accounts”.
In 2020, Revolut unveiled its Junior account offering. It’s also continued to grow its trading offering, helped along by US trading app giant Robinhood’s decision to retreat from its UK launch plans.
The challenger made £20.5 million from ‘other income’, including its trading offering, in 2019. It also made £39.5 million from its Premium subscriptions.
These numbers, whilst smaller than what it made on interchange fees in 2019, show potential for where the start-up can push for profitability.
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