UK digital bank Revolut has completed a £384m round of funding, making it one of the most highly-valued tech start-ups in the world.
In total, the company has raised £645m. The latest funding round, led by US-based growth capital firm TCV, values Revolut at £4.2billion.
Launched in 2015, Revolut is an entirely digital financial platform that has attracted more than 10 million customers around the world – mostly Millennials.
The company started out offering a foreign currency exchange product, but then expanded into a full range of services including current and business accounts, commission-free stock trading and cryptocurrency investments.
The company says it is an innovative new kind of financial platform that gives people the power to spend, invest and transfer money without the high fees charged by conventional big banks.
The £4.2b valuation of Revolut is far higher than rival digital banks Monzo, Starling ( also UK-based) and the German digi-bank N26. None of these challenger banks have turned a profit yet.
In terms of total deposits by customers, analysis by The Financial Times and others shows that Revolut is in the lead again, with £900m banked in 2018, compared with N26 (£850m), Starling (£600m) and Monzo (£480m).
Revolut’s new round of funding was secured on the back of high customer demand and engagement and a strong financial performance last year.
The new capital will be used to focus on the customer experience and strengthen Revolut’s core retail and business offerings. The company aims to accelerate the daily usage of accounts.
Future plans include lending services for retail and business customers, extending high interest savings accounts beyond Britain, further improving customer service and rolling out banking operations across Europe.
Perks for account holders
Special perks for business account holders include £150 of free car driving credit with Zipcar For Business, plus discounts with digital law firm Sparqa, Amazon Business and pension service provider Smart Pension.
Growing by 154% last year, Revolut’s Premium and Metal subscription accounts are a successful revenue stream for the business. These services will continue to be developed.
Revolut’s Premium and Metal accounts feature a variety of benefits, including unlimited foreign currency exchange, airport lounge access, commission-free stock trading and travel insurance.
The Metal account is so-called because account holders are issued with an 18g contactless card cut from reinforced steel.
Revolut intends to continue expanding its workforce. The company now employs more than 2,000 people in 23 offices across the world. Its website currently lists a total of 356 job vacancies with 12 opportunities in Dublin and 172 vacancies at its Canary Wharf headquarters in London.
In order to ramp up its governance, Revolut has made a number of senior appointments. Last year, it appointed Martin Gilbert, the former Co-Chief Executive of Standard Life Aberdeen, as Chairman of its Board. Caroline Britton, a former Audit Partner at Deloitte, and Bruce Wallace, formerly Chief Operations Officer at Silicon Valley Bank, were both appointed as Non-Executive Directors.
Commenting on the new investment, Nik Storonsky, Founder & CEO at Revolut said: “Going forward, our focus is on rolling-out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability. TCV has a long history of backing founders who are changing their industries on a global scale, so we are excited to partner with them as we prepare for the next stage of our journey.”
Founded in 1995 in California, TCV provides capital to growth-stage private and public companies within the technology industry. Its other investments include Airbnb, Expedia, Facebook, LinkedIn, Netflix, Spotify, and WorldRemit.