The all-in-one fintech app Revolut has launched its annual report for 2021. Whereas 2021 ended greater than a yr in the past, this report contains 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% improve 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 residence nation), the corporate now has a full banking license in Lithuania.
It may use this license throughout the European Financial Space by means of passporting guidelines, which implies that Revolut may very well be thought of as a financial institution in Europe. Along with these fundamental banking options, the corporate presents a ton of fintech merchandise — however extra on that later.
First, let’s have a look at the large figures and convert them to {dollars} utilizing at the moment’s trade price:
In 2021, Revolut generated $769 million (£636 million) in income vs. $266 million (£220 million) in 2020.
In 2021, Revolut reported a internet earnings of $31 million (£26 million) vs. a internet lack of $270 million (£223 million) in 2020.
Gross margin additionally jumped from 33% to 70% between 2020 and 2021.
“We’ve achieved our first full yr of revenue and proven that we will speed up buyer development, 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 tens of millions of recent clients. We additionally launched a number of new merchandise and noticed extra exercise from our buyer base.”
All the pieces is shifting up and to the proper. In different phrases, issues are trying nice at Revolut proper now. That’s why the corporate managed to lift a $800 million funding spherical 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 without spending a dime, customers need to pay some charges for some cash administration companies. Essentially the most enthusiastic clients also can select to pay for a premium subscription plan to waive some charges and entry further options.
On prime of that, Revolut generates income from interchange charges. Each time a Revolut customers pay for one thing with a card, retailers need to pay some card transaction charges. These charges are break 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 may possibly add up when you have got tens of millions of consumers.
Income may 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 trade and wealth companies symbolize 55% of whole income ($421 million/£349 million).
Whereas the primary gadgets are fairly straightforward to grasp, the final one contains fairly a number of Revolut companies. Revolut began as a seamless international trade app mixed with a multi-currency card. Revolut prices at the very least 0.5% in trade charges above a sure restrict without spending a dime customers. For everybody (together with paid customers), there are further charges once you trade cash on the weekend or if you end up exchanging an unusual foreign money.
Revolut additionally enables you to commerce cryptocurrencies, shares and commodities like gold and silver. For these monetary merchandise, Revolut prices 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 yr with a crypto growth that led to a spike in crypto transactions in addition to some renewed curiosity from retail traders for shares. Bear in mind, 2021 began with the GameStop quick squeeze on WallStreetBets.
Whereas 2022 won’t look as dramatic as 2021, Revolut already shared a brief preview of final yr’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% improve, which is far decrease than the 189% improve in 2021. And but, many large-scale startups can be fairly proud of a 30% income bounce. Revolut now has 27 million clients.
Now, it’s time to stabilize the enterprise as Revolut did not launch its monetary statements on time. If the corporate needs to go public within the coming years, it must enhance its inner processes. That will additionally assist in terms of acquiring a banking license within the U.Ok.
