Aisha S Gani
Finance app Revolut Ltd. made its first annual profit in 2021 after nearly tripling its revenue, according to delayed accounts published Wednesday. Revenue growth slowed to 30% last year.
The London-based business said pretax profit of ?39.8 million ($48 million) in 2021 compared to a loss of ?220.7 million a year earlier, with revenue jumping to ?636 million. The firm said its biggest source of revenue was foreign exchange and wealth, overtaking payment cards. Gross margins increased to 70% from 33%.
Revolut continued to grow at a slower pace in 2022, with revenue rising to about ?850 million, according to a statement. The 2021 accounts were delayed for months and marked overdue since December amid a Financial Reporting Council review of audit quality.
“We have achieved our first full year of profit and shown that we can accelerate customer growth, at scale, and grow revenue across all of our product lines,” said Nikolay Storonsky, Revolut’s 38-year-old chief executive officer.
Revolut, which was valued at $33 billion in a funding round in 2021, is one of Europe’s largest startups with backers including SoftBank Group Corp.’s Vision Fund 2 and Tiger Global Management. About 27 million customers globally use the platform for payments, trading and other wealth services.
Storonsky said in July that Revolut was profitable and had enough funding for two years, allowing it to sidestep a gruelling period for fintech fundraising that’s seen rivals such as Klarna cut billions of dollars from their market value
The firm, which currently makes most of its money in Europe, plans to expand in new markets including New Zealand, Brazil, Mexico and India. It more than doubled its headcount in 2021 and employed 4,655 people.
Other Insights
- Revolut launched in 2015 as a prepaid card offering cheap foreign-exchange fees, with Storonsky — a former derivatives trader at Credit Suisse Group AG and Lehman Brothers — handing out freebies at railway stations. Now it operates in business, crypto, and buy now, pay later products.
- In November, Revolut announced a new instant messaging function, as part of its attempts to become Europe’s answer to China’s lifestyle “superapp” WeChat.
- Revolut is waiting for the UK regulator to approve its application for a banking license, which it requested in January 2021.
- Total pay for directors rose to ?3.7 million, up from ?580,000. Most of this was share-based payments.
