Revolut attacks new fintech niches with subscription service, hosts fundraise on Seedrs.
Revolut, the money app made famous for currency exchange, continues its assault on financial services, with global remittance firm TransferWise now set squarely in its sights. Revolut is launching a new premium account – which it likens to the Amazon Prime model – while also launching a fresh round of fundraising on equity crowdfunding platform Seedrs.
Revolut’s first crowdfunding campaign was hosted on Crowdcube, a major rival to Seedrs. The round, which was massively oversubscribed, raised a little over £1m from 433 investors. A Revolut spokesperson said that the firm had enjoyed working with Crowdcube, but that Seedrs were keen to collaborate and offered a "great deal". Seedrs' chief investment officer Thomas Davies said that later stage firms often choose to raise on Seedrs because of its full service nominee structure.
He also claimed that institutional investors often prefer Seedrs because it is the only platform that "has the ability to sign up to shareholder agreements and other investor documents on behalf of the crowd investors, making the ongoing management of the company and its shareholders much easier, particularly when there is a sale of the business in the future".
Crowdcube co-founder Luke Lang said that he was "very surprised and disappointed" at Revolut's decision, given Crowdcube's "proven track record of funding VC-backed businesses". He also noted that some firms have gone the other way, switching from Seedrs to Crowdcube. POD Point – which recently raised £1.5m as part of a larger £9m round, led by Draper Esprit – is one such example.
Revolut’s new premium service costs £6.99 per month. The big lure for subscribers is the ability to send money overseas for free (not including the cost of subscription), using 23 different currencies. TransferWise, the best-known fintech firm in this niche, currently charges users between 0.5 and 2.5 per cent per transaction.
Other benefits of the premium service include overseas medical insurance, twice the ATM withdrawal limit that applies to regular users and custom-designed cards.
The first 5,000 users to sign up to the premium service will also get priority access to the Seedrs fundraise, which forms part of a larger Series B fundraise. The two part raise is reminiscent of Monzo’s recent £22m round, in which £2.5m was held back for the crowd.
Revolut received over £17m in demand when last it cordoned off equity for the crowd, with over 10,000 investors pledging. Given the competition, one would expect a flurry of subscriptions to the app’s new premium membership as investors fall over themselves for priority access to the fundraise.
Aggressive expansion of this kind is standard procedure for Revolut, which only last week launched a new instant credit offering in partnership with peer-to-peer platform Lending Works, shortly after announcing a deal with online investment channel Bricklane. The firm launched its current account offering in January of this year. It now boasts a user-base of around 550,000.
“Revolut Premium will be an all-you-can-eat membership program for a new generation of digitally-driven demanding consumers who feel disengaged from their current financial service providers,” said Nikolay Storonsky (pictured above), founder and CEO of the app.