- London-based startup enjoys massive increase in transactions and sign-ups
- 50% user upsurge and with 6,000 new app users per day
In an exceptional development for a niche industry that has so far struggled to attain profitability, British-headquartered money transfers app Revolut has announced that, in the final month of 2017, it broke even for the first time since it was founded in 2015.
In December last year, the cross-border payments app saw its monthly transaction volume swell to $1.5bn, a staggering year-on-year rise of 700%.
The startup now boasts a total of 1.5 million signed-up customers who use its mobile app, a rise of 50% on the one million it achieved just three months ago in November. Revolut is currently attracting between 6,000 and 8,000 new sign-ups every day. None of the traditional banking giants can boast a similar customer growth rate.
The company declined to reveal any information on revenues or losses, stating that it made no sense to disclose these figures in the context of the highly competitive market it operates within.
Customers using Revolut’s app can open a bank account within 60 seconds. It permits international money transfers at the interbank rate, and customers can enable and disable debit card features in a matter of seconds. In 2017, it launched a new feature allowing customers to buy, hold and sell cryptocurrencies such as Bitcoin, Litecoin and Ethereum. Customers can also use their Revolut accounts to buy travel insurance, open a credit line and obtain a personal IBAN.
Currently, Revolut boasts 800,000 active monthly users, with 350,000 customers opening the app every day.
In its “breaking even” announcement, Revolut claimed that it is the first challenger bank to achieve this breakthrough in so short a time interval.
Fintech challenger banks, unlike the conventional banking giants, are small groups. Most are headquartered in Britain and were launched with the express aim of competing with the established banking giants. However, many fintech innovators, such as the UK’s Monzo and Germany’s N26, have struggled to convert the expansion of their customer bases into profit. One of the more established fintech disrupters, TransferWise, took six years to reach profitability.
That may be about to change. The European Union has introduced new rules that will open the data of the established banking giants to third-party firms, which many observers believe will help the new fintech challenger banks (along with some of the big tech firms) to increase their competitiveness.
In November last year, Revolut applied for a European banking licence with a view to delivering credit and deposit services within that regulatory regime. However, Europe is just the beginning. The startup announced that it also intends to expand to Canada, the US, Australia and Singapore over the coming 12 months, following with plans to launch in Brazil, India, South Africa and the UAE.
The company told TechCrunch journalist Romain Dillet over the weekend that December wasn’t simply a “lucky month” – January is shaping up handsomely too.
In a statement on 26 February, CEO and co-founder Nikolay Storonsky said: “Whilst it is encouraging to see that our business model is working, becoming a profitable business is not our priority right now. We are completely focused on expanding Revolut to as many countries around the world as possible, with the United States, Singapore and Australia almost ready to go."
