Revolut’s revenues and losses triple in 2019 amid slowing customer growth

By Aisling Finn on Tuesday 11 August 2020

Digital Banking

Digital banking service Revolut’s losses widened to over £106m in 2019, up from £33m in 2018.

Revolut’s revenues and losses triple in 2019 amid slowing customer growth
Image source: Vlad Yatsenko and Nikolay Storonsky/Revolut

Just like its peers, Starling and Monzo, Revolut has not been immune to the effects of the coronavirus in 2020. 

However, the digital banking service reassured customers that it has “significant headroom above its regulatory capital and liquidity requirements,” a slight difference to the “material uncertainty” that rival Monzo faces. 

The digital banking service’s losses more than tripled from just under £33m in 2018 to £106.5m in 2019 according to its annual report filed at Companies House today. 

Despite the heavy losses, which are not linked to coronavirus because the report only accounts for activity up to the 31 December 2019, Revolut’s revenue increased by 180 per cent to £162.7m in 2019 from £58m. 

Most of Revolut’s revenue is generated through the fintech’s interchange fees, £102.6m to be more specific, and of the fintech’s total revenue, over 99 per cent (£162.3m) comes from the UK alone. 

In the report, Revolut noted that “restrictions on customers’ ability to undertake travel and other expenditure can negatively impact on the ability of Revolut to generate revenue,” and that the digital banking service’s “growth has slowed.” 

But the challenger also noted that while some areas of its businesses suffered under the pandemic, other areas, such as crypto trading, “have been positively impacted by Covid-19 in the short term.” 

Crypto is doing so well, in fact, that at the end of 2019, Revolut’s customers held £93.3m in cryptoassets—a figure which, of course, doesn’t account for the crypto boom that Revolut has experienced under lockdown. 

Despite the “lower than expected customer growth rates,” Revolut has over 10m, a figure which has now leapt to 12m, with an increase of 231 per cent of daily active users. 

At the end of 2019, Revolut’s 10m customers held over £2.36bn in their accounts, an average of just over £236 per customer, a huge jump down from rival Starling’s average customer deposit of £950 in December 2019, a figure which has increased to over £1,500 in July 2020. 

Revolut’s average customer deposits also slightly decreased down from just over £265 per customer in 2018.  

The report, which was filed on Companies House, also disclosed that Revolut’s “robust framework” allowed it to “recognise the increasing risk arising from our contractual relationship with Wirecard.” 

Revolut said it was able to cut ties with the troubled payment processing firm “at negligible cost to Revolut and no cost to [its] customers.”  

Revolut is also looking to “obtain further regulatory authorisations required to expand our product offerings across jurisdictions,” potentially an indication that the e-money institution is eventually going to apply for a UK banking licence after having operated in the UK for five years without one. 

The fintech also said that it planned to further utilise its Lithuanian banking licence and launch in other European markets. 

In February 2020, Revolut announced the closure of a $500m Series D funding round, which it has now topped up with an additional $80m.  

The funding round saw the fintech valued at $5.5bn, making it one of Europe’s most valuable fintechs alongside Klarna and 

After what appeared to be a fairly rocky end to 2019, with widening losses and slowing customer growth, Revolut doesn't look like it's flailing under the coronavirus-related strain just yet—lockdown will have put a dampener on its growth plans but, the digital banking service still has plans to expand its services and into new markets in 2020.

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