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Revolut bank, Europe’s top digital bank recorded a loss of £106.5 million in 2019. The firm is confidence in turning a profit with its current performance.
Revolut Bank renowned as one of Europe’s top challenger banks said its losses in the 2019 fiscal year stood at £106.5 million. This significant loss is triple-fold compared to the ones recorded in 2018 (£32.9 million), putting the company in a worrisome state pre-COVID-19.
The company increased both its revenue and its customer base in 2019, but these performances were negated by the reported loss. Revolut attributed its losses to the international expansion drive, a move that has seen it enter the US, Singapore, and Australian markets.
The growth tick by Revolut has been seen by the firm’s management to be a step in the right direction. Nik Storonsky, Revolut founder and CEO, said in a statement on Tuesday:
“While we still have some way to go, we are pleased with our progress in 2019, We increased daily active customers by 231% and the number of paying customers grew by 139%.”
Revolut Bank Rise to Dominance
British based Revolut Bank was founded on 1 July 2015, and has since, grown to be one of the formidable challenger banks in Europe.
Revolut offers banking services including GBP and EUR bank accounts, debit cards, fee-free currency exchange, stock trading, cryptocurrency exchange, and peer-to-peer payments. Its mobile app supports spending and ATM withdrawals in 120 currencies and sending in 29 currencies directly from the app.
This bank is one of the first startups to embrace the capabilities of cryptocurrencies in the payment service system. It also provides customers through its app with access to cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP by exchanging with about 25 fiat currencies.
Its drive to push greater values to its customers has stirred Revolut bank to seek licenses to offer lending services. While one of such licenses has been granted by the Bank of Lithuania, the company aspires to drive this offering mainstream through approvals in other countries it operates in.
The payment giant has attracted investors around the world and it secures a $500 million fund injection earlier this year. Nik Storonsky attributed the firm’s attractiveness to investors to its business model. He noted:
“We are on a mission to build a global financial platform on a single mobile app where our customers can manage their daily finances, and this investment demonstrates investors’ confidence in our model”.
Recent Growth Review
In a competitive and highly innovative business ecosystem, Revolut has carved a niche for itself. The company tripled its user base in 2019 to 10 million from 3.5 million about a year earlier. Valued at $5.5 billion, the company was able to wedge through the difficult times the coronavirus pandemic plunged the world into.
Martin Gilbert, Revolut’s Asset manager said in a statement:
“Both 2019 and the first months of 2020 have been periods of significant achievement and expansion for Revolut, putting the company on a clear path to long-term sustainable growth. Our continued growth and expansion during the pandemic has shown the resilience of our strategic plans and we are pleased that these plans are further endorsed by new investors”.
While Revolut Bank has never recorded a significant profit in a fiscal year since its inception in comparison to its competitor TransferWise which reported profits in 2017, it looks to turn in a profit despite the stressed state of the global economy this year. This is enough to boost the Revolut investors’ confidence to look beyond the losses reported and hope for better days ahead.