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 almost tripled its income between 2020 and 2021. Due to this explosive development trajectory, the corporate reached profitability for the primary time.
Revolut’s monetary success begins on the prime of the funnel. On the finish of 2021, Revolut had greater than 16 million clients, representing a 46% enhance in comparison with 2020.
Revolut’s core product is an account to ship, maintain and obtain cash mixed with a fee card. Whereas Revolut has but to acquire a banking license within the U.Ok. (its house nation), the corporate now has a full banking license in Lithuania.
It will probably use this license throughout the European Financial Space by passporting rules, which implies that Revolut might be thought of as a financial institution in Europe. Along with these primary banking options, the corporate provides a ton of fintech merchandise — however extra on that later.
First, let’s take a look at the massive figures and convert them to {dollars} utilizing in the present day’s change price:
- In 2021, Revolut generated $769 million (£636 million) in income vs. $266 million (£220 million) in 2020.
- In 2021, Revolut reported a web revenue of $31 million (£26 million) vs. a web lack of $270 million (£223 million) in 2020.
- Gross margin additionally jumped from 33% to 70% between 2020 and 2021.
“Now we have achieved our first full 12 months of revenue and proven that we will speed up buyer development, at scale, and develop income throughout all of our product strains,” 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 clients. We additionally launched a number of new merchandise and noticed extra exercise from our buyer base.”
All the things is shifting up and to the fitting. In different phrases, issues are trying nice at Revolut proper now. That’s why the corporate managed to boost a $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 clients can create an account free of charge, customers must pay some charges for some cash administration providers. Essentially the most enthusiastic clients can even select to pay for a premium subscription plan to waive some charges and entry extra options.
On prime of that, Revolut generates income from interchange charges. Each time a Revolut customers pay 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 add up when you have got hundreds of thousands of consumers.
Income might be damaged down in three huge 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 providers symbolize 55% of whole income ($421 million/£349 million).
Whereas the primary objects are fairly simple to know, the final one consists of fairly a couple of Revolut providers. Revolut began as a seamless international change app mixed with a multi-currency card. Revolut expenses a minimum of 0.5% in change charges above a sure restrict free of charge customers. For everybody (together with paid customers), there are extra charges if you change cash on the weekend or when you’re exchanging an unusual foreign money.
Revolut additionally helps you to commerce cryptocurrencies, shares and commodities like gold and silver. For these monetary merchandise, Revolut expenses some vital charges — between 1.49% and 1.99% for crypto transactions, between 0.5% and 1.5% for treasured 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 buyers for shares. Keep in mind, 2021 began with the GameStop short squeeze on WallStreetBets.
Whereas 2022 won’t 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 proud of a 30% income soar. Revolut now has 27 million clients.
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 should enhance its inner processes. That will additionally assist in terms of acquiring a banking license within the U.Ok.
