Losses have more than trebled at digital bank听Revolut听despite a huge increase in revenue.听
The London FinTech reported a听loss of 拢106.5 million in 2019, compared to 拢32.8m in 2018.听
Revenue听almost trebled, reaching 拢162.7m from 拢58.2m in 2018.听
It blamed the听mounting losses on geographical and product expansion, with Australia its latest full international launch just this week.听
A $500m funding round from US investors in February, before coronavirus reached the UK, saw Revolut’s valuation hit 拢4.3bn and become the UK’s most valuable FinTech.
The firm听offers features which have become standard among digital-only banking rivals Starling and Monzo, including current and business accounts, stock trading and cryptocurrency services.
The results听reflect those of Monzo, which last week saw losses more than double to听拢113.8m, up from 拢47.2m in 2019. Revenues at Monzo also听rose, but听stand some 拢100m below those of听Revolut.听
Monzo announced听cost-saving measures听and expressed 鈥渟ignificant doubt鈥� about its ability to continue.听
However听Revolut鈥檚听board said听its own company, which employs 2,200 staff,听has a听鈥渃omfortable level of headroom above its regulatory capital and liquidity requirements鈥�.听
Rival Starling Bank, which reported a loss of听拢52m compared to 拢25m in 2018, has revenue of around 拢80m and is confident of听becoming the first听neobank听to听break even next year听having largely dodged the negative effects of coronavirus, unlike its rivals.听
It was the only one of the three to not furlough any staff.听Revolut听cut 60 of its staff听and听offered a听scheme whereby employees could trade in part of their monthly pay听for equity in the company.听
Revolut听now has 13m customers around the world, compared with听Monzo鈥檚听4m and the 1.5m of Starling. The latter鈥檚 customer base has the oldest average age.听
Before coronavirus, it had planned to expand into Japan, Russia, the US, South America and Asia this year and to grow its headcount.
Currensea co-founder James Lynn told 老九品茶Cloud before COVID-19 hit the UK that the profitability of digital-only banks would present a challenge for as long as customers maintained a second traditional account to hold their income and savings.
neobanks