The first annual gain reported by Revolut follows the fintech giant’s January decision to suspend the launch of RevCoin.
British-Lithuanian neobanking and fintech platform Revolut recently reported its first annual profit due to higher user engagement. The London-based fintech giant revealed that it posted a net profit of £59.1 million for 2021. According to Revolut, its commendable performance for the given year was due to a sharp increase in its subscription to paid packages. Furthermore, the company revealed that the overall usage of its app also grew substantially in 2021.
Revolut earned revenue of £636.2 million, or $766.9 million, in 2021, three times what the fintech giant earned the year before. Furthermore, the British neobank also added that it expects revenue to have grown by more than 30% to £850 million by 2022. This development is part of Revolut’s business update for the stated year. However, due to its status as a private company, the company is also not required to share frequent quarterly reports.
Revolut’s CFO Mikko Salovaara addressed the company’s latest performance in a media session. Attributing Revolut’s results to diversified fintech business and diligent cost control, Salovaara also said:
“The worst possible scenario would be that Revolut was not sustainable or required external funding. The reality is that we do not require external financing. We continue to invest in our business, providing products people can trust.”
Revolut posted a pre-tax loss of £205 million.
Revolut report, first annual welcome relief benefit for troubled fintech space
Revolut’s first annual earnings announcement is a positive development for a fintech market plagued by valuation declines. As the industry continues to suffer from macroeconomic constraints, investors are considering safer companies.
The fintech industry has also seen massive downsizing as skyrocketing inflation and valuation cuts weigh heavily. Last July, Swedish fintech Klarna – Buy Now Pay Later (BNPL) – saw a colossal 85% valuation drop. At the time, Klarna fell to a relatively low $6.7 billion and was still reeling from its May global layoff scheme. The company recently posted a record $1 billion loss in its fiscal 2022 year due to deteriorating business conditions. The last time Klarna made a profit for the full year was in 2018.
In light of the Klarna development and the reverse of Revolut, Salovaara believes that investors are pleased with Revolut’s performance. However, the fintech’s CFO was unable to estimate Revolut’s current value, considering that the last time it raised cash was in 2021.
Revolut, which just missed the year-end deadline to file accounts with the UK company register, also faced UK regulatory concerns. Regulators questioned the strength of the company’s internal financial controls and Revolut’s auditors pushed for improvements in internal control.
RevCoin Launch On Hold
According to a January report, Revolut has suspended the launch of its native digital currency, RevCoin. The fintech giant postponed the coin toss to determine the full extent of the fallout from the FTX crash. In a statement, a Revolut spokesperson explained at the time:
“We are analyzing market conditions and evaluating the best time to launch RevCoin in the coming months.”
Although Revolut still intends to launch RevCoin this year, the company did not give a specific time. Instead, the spokesperson said the specifics of timing would depend on the neobank’s investigation.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
