The all-in-one fintech app revolution has issued are annual report for 2021. Although 2021 ended more than a year ago, this report contains some significant figures as the company nearly tripled its revenue between 2020 and 2021. Due to this explosive growth trajectory, the company reached profitability for the first time.
Revolut’s financial success starts at the top of the funnel. At the end of 2021, Revolut had more than 16 million customers, a 46% increase from 2020.
Revolut’s core product is an account to send, hold and receive money in combination with a payment card. While Revolut does not yet have a banking license in the UK (the home country), the company now has a full banking license in Lithuania.
It can use this license throughout the European Economic Area through passport rules, meaning Revolut can be considered a bank in Europe. In addition to these basic banking features, the company offers a ton of fintech products, but more on that later.
First, let’s take a look at the big numbers and convert them to dollars using today’s exchange rate:
- In 2021, Revolut generated $769 million (£636 million) in revenue vs. $266 million (£220 million) in 2020.
- In 2021, Revolut reported a net income of $31 million (£26 million) vs net loss of $270 million (£223 million) in 2020.
- The gross margin also increased from 33% to 70% between 2020 and 2021.
“We delivered our first full year of profit and demonstrated our ability to accelerate customer growth, scale, and grow sales across all of our product lines,” Revolut co-founder and CEO Nik Storonsky said in the release. “In 2021, we received a full banking license from the European Central Bank and welcomed millions of new customers. We also launched several new products and saw more activity from our customer base.”
Everything goes up and to the right. In other words, things are looking good at Revolut right now. Therefore, the company managed to raise an $800 million round of funding in mid-2021 at a valuation of $33 billion.
Generate income from crypto trading and other fees
Revolut’s revenue comes from multiple sources. While customers can create an account for free, some money management services require users to pay a fee. The most enthusiastic customers can also choose to pay for a premium subscription to waive certain charges and access additional features.
In addition, Revolut generates income from interchange fees. Every time a Revolut user pays for something with a card, merchants must pay a certain card transaction fee. These fees are split between the merchant’s bank, the card scheme (e.g. Visa or Mastercard) and the issuing bank (in which case Revolut). While Revolut only gets a small portion of the transaction amount, it can add up if you have millions of customers.
Turnover can be broken down into three major pillars:
- Cards and exchange represent 23% of total revenue ($180m/£149m).
- Subscriptions represent 17% of total revenue ($129m/£107m).
- Foreign exchange and asset services represent 55% of total revenue ($421 million/£349 million).
While the former items are fairly easy to understand, the latter includes quite a few Revolut services. Revolut started as a seamless currency app combined with a multi-currency card. Revolut charges at least a 0.5% exchange fee above a certain limit for free users. For everyone (including paying users) there are additional costs when you change money on the weekend or when you change an unusual currency.
With Revolut you can also trade cryptocurrencies, stocks and commodities such as gold and silver. For these financial products, Revolut charges some significant fees – between 1.49% and 1.99% for crypto transactions, between 0.5% and 1.5% for precious metals.
2021 was a special year with a crypto boom that led to a spike in crypto transactions and renewed retail investor interest in equities. Remember, 2021 started with the GameStop short squeeze on WallStreetBets.
While 2022 may not look as dramatic as 2021, Revolut already shared a brief preview of last year’s numbers. In 2022, the company’s revenue rose again to more than $1 billion (£850 million). It’s a 30% increase, which is much lower than the 189% increase in 2021. And yet many large-scale startups would be quite happy with a 30% increase in revenue. Revolut now has 27 million customers.
Now it’s time to stabilize the company as Revolut failed to let go its annual accounts on time. If the company wants to go public in the coming years, it will have to improve its internal processes. That would also help when it comes to getting a banking license in the UK
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.