Will Revolut IPO?
Revolut has said it would consider an IPO in the next two or three years, depending on the market conditions.Co-founder and CEO Nik Storonsky said there is no timing yet for a potential market debut, but he commented that Revolut is “obviously a venture-funded company so at a certain point in time it will happen.”
The listing was initially rumoured to be taking place in 2022 but it’s now more likely to be in 2023 or early 2024.
Here’s everything we know so far.
Revolut IPO plans
Revolut has no concrete IPO plans, but it has been discussed by company representatives – including the CEO – on multiple occasions.
As there’s been no official filing, there’s no information about where the listing will take place. But given Revolut is a British company, a London float is likely. There’s no price range yet either.
IPO rumours gathered more momentum when Revolut hired former Standard Life Aberdeen joint chief executive Martin Gilbert as chairman of its board and also brought in Michael Sherwood, the former joint chief executive of Goldman Sachs in London, to its board.
The company also recruited a head of investor relations in May 2022, giving another sign it was gearing up for a listing.
Learn more about what an IPO is and how it works.
Revolut IPO date
Revolut’s IPO date is also unknown. Storonsky has said the company would need to ‘be in at least the few billion dollars range of revenue a year’ before it lists.
Revolut’s adjusted annual revenue was £261m ($359m) in 2020, so despite Storonsky’s claims that the company is nearly ready, it seems unlikely to be any time soon.
Plus, other factors have also come into play, such as the Russian invasion of Ukraine stalling causing volatility across equity markets throughout 2022. Most IPOs that were due to take place in 2022 have been pushed into 2023, and Revolut is likely to be no different.
According to some reports, even 2023 could be optimistic for the company given that it’s yet to receive its UK banking license.
See other upcoming IPOs in 2023.
What is Revolut’s value?
Revolut was last valued at $33 billion at the time its IPO plans were first discussed in September 2021. But a lot has happened in the meantime, and such a lofty valuation is likely to have shrunk by the time the firm lists.
The company has raised a total of $1.7 billion in funding over 19 rounds to date. Its major investors include Tiger Global Management, G Squared, SoftBank and TCV.
How to trade the Revolut share price
You can trade the Revolut share price once it has been listed in the same way as any other stock on the market.
What is Revolut?
Revolut is a provider of banking services – such as bank accounts, debit cards and peer-to-peer payments – as well as financial services, such as stock, commodity and crypto trading.
Revolut currently only supports legal residents of the European Economic Area (EEA), Australia, Singapore, Switzerland, Japan, the United Kingdom and the United States.
Despite being founded and headquartered in the UK, the company doesn’t yet have a full UK banking license. This means it can provide UK customers services but is only considered an electronic money institution and is not regulated as a bank – so consumers are not protected in the same way against risk.
Getting a UK license is only expected to take three years, but for the Revolut team, the process has been drawn out given some criticisms over the auditing of accounts.
Once the company’s home regulator gives it the go-ahead, it’s likely other regulators will fall in line, so we’ll see Revolut attempt to expand further in the US and elsewhere.
The company raised $800 million from investors in July 2021 which would go toward its expansion into new products and markets. Revolut has been operational in India since April 2021 and announced its expansion into Mexico and Brazil in September of the same year. Now the focus is more on the US and getting its UK license.
In terms of products, Revolut launched a new in-app chat feature in 2022 that allows users to communicate with their friends – a move that Storonsky says is a step toward becoming a complete financial ‘super app’. And in September 2022, it entered the buy now, pay later (BNPL) sector with its ‘Pay Later’ feature in Ireland – directly competing with the likes of Klarna.
The company has also hinted that it could look at salary advances and pet insurance.
How does Revolut make money?
Revolut makes most of its money through three main revenue streams: interchange, banking services and interest.
Like other neobanks, such as Monzo and Starling, Revolut charges a transaction fee to users – this is currently around 0.2%. This process is called interchange. As Revolut has added more users (it now has more than 15 million registered users) the fees have started to add up. In 2020, interchange generated Revolut $131 million (£95 million) in revenue.
Revolut also makes money through charging for its banking services. While its standard account is free, it charges:
- £2.99 a month for Plus accounts
- £6.99 a month for Premium accounts
- £12.99 a month for Metal accounts
As the charges go up, the users get greater benefits, such as greater spending limits, better investment fees and integrated insurance.
Usually, any funds that Revolut holds with central banks will earn the company interest. But due to the low interest rates on offer thanks to the cost-of-living crisis and lingering effects of the pandemic, the company has seen less from this income stream.
Is Revolut profitable?
Revolut’s profitability is very much up for debate. The company’s finances have been kept under wraps, as after filing for two extensions, Revolut will not release its 2021 financial statements until December.
So, for now, all we have to go by are the statements of CEO Storonsky, but he’s given a lot of conflicting comments too.
In the company’s FY2020 statement, it had a comprehensive loss of £168 million for 2020, but Storonsky made another comment that the firm has been “profitable since 2020”.
His most recent remarks come in an interview with Sifted, in which he states: “We’re cash-generating…We are profitable now, and we were profitable last year too.”
So ultimately, until we see the actual financial statements for 2021, it’s anyone’s guess what Revolut is making.
Revolut’s main competitors are other British neobanks Monzo and Starling. Revolut still comes out on top in terms of monthly users, having been downloaded 5.8 million times in 2020 compared to Monzo’s at 2.4 million and Starling Bank’s 1.3 million downloads.
And although all three have a lot of similarities in terms of business model, Monzo and Starling have secured UK banking licenses, while Revolut remains only an electronic money institution while the other two are officially banks.
Both Monzo and Starling have also been rumoured to be considering IPOs. Find out more about:
Now that Revolut has a buy-now-pay-later function, it also competes with Klarna, another company that could list in 2023. It’s still at the top of the European valuation list for private start-ups – worth approximately $6.7 billion, which is significantly down from the $45 valuation it received in 2021. This highlights what a difficult period it is right now for tech, and why we could see these IPOs delayed.
Learn more about the Klarna IPO
Who were Revolut’s founders?
Revolut was founded by Nikolay Storonsky and Vlad Yatsenko on July 1st 2015.
Who is the Revolut CEO?
The Revolut CEO is Nikolay Storonsky, who is a British businessman of Russian origin. According to the company’s website, he was previously an “Emerging Markets Equity Derivatives Trader at Credit Suisse and Lehman Brothers, he traded over $2bn across various options, swaps, and FX instruments”.
Who owns Revolut?
Revolut is still a privately owned company. The largest portion of Revolut is owned by co-founder and CEO Nik Storonsky, who has a 20% stake in the company.
The next largest portion of share ownership is from Revolut’s corporate investors, who own approximately 75% of the firm’s stock. And the remainder is owned by private shareholders and former Revolut employees.