Revolut IPO: What You Need to Know
Revolut, a UK-based fintech company that provides banking and financial services, is rumored to be considering an initial public offering (IPO). In this article, we'll explore what we know about the potential IPO, including market conditions, revenue, valuation, investors, and regulatory considerations.
What is Revolut
Revolut is a UK-based fintech company that provides banking and financial services to customers across the globe. The company was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, and has since grown rapidly, boasting over 15 million customers worldwide.
Revolut offers a range of services, including bank accounts, debit cards, and peer-to-peer payments, as well as financial services such as stock, commodity, and crypto trading. The company currently supports legal residents of the European Economic Area (EEA), Australia, Singapore, Switzerland, Japan, the United Kingdom, and the United States.
Revolut IPO Speculations
Revolut co-founder and CEO Nik Storonsky has stated that the company would consider an IPO in the next two to three years, depending on market conditions. While there's no concrete plan in place, the company has been discussing the possibility of going public for some time.
While Revolut's revenue is significant, it falls short of the few billion dollars range of revenue a year that Storonsky has said the company would need to achieve before going public. As a result, it's uncertain whether the IPO will take place in the near future.
If the IPO does happen, it will be closely watched by investors and industry insiders. Revolut is one of the leading fintech companies in the UK, and an IPO could have significant implications for the broader financial industry.
Revenue and Valuation
Revolut's adjusted annual revenue was £261m($359m) in 2020, which is far below the few billion dollars range of revenue a year that Storonsky has said the company would need to achieve before going public. Revolut was last valued at $33 billion when the IPO plans were first discussed in September 2021. However, a lot has happened since then, and the company's valuation may have shrunk by the time it goes public. Revolut has raised a total of $1.7 billion in funding over 19 rounds to date, with major investors including Tiger Global Management, G Squared, SoftBank, and TCV.
Regulatory Considerations
Despite its popularity, Revolut has faced some regulatory challenges in recent years. While the company offers banking services to UK customers, it doesn't yet have a full UK banking license, meaning it's only considered an electronic money institution and isn't regulated as a bank. This lack of regulation means that consumers aren't protected in the same way against risk. The company is currently in the process of obtaining a UK banking license, which is expected to take three years.
Despite these challenges, Revolut has continued to grow and expand its services. With rumors of an upcoming IPO, the company is poised to become an even more significant player in the fintech space. As one of the leading fintech companies in the UK, Revolut's IPO will be closely watched by investors and consumers alike.
Services and Revenue Streams
Revolut provides 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. It currently supports legal residents of the European Economic Area (EEA), Australia, Singapore, Switzerland, Japan, the United Kingdom, and the United States. In terms of revenue, Revolut makes most of its money through three main streams: interchange, banking services, and interest.
· Interchange: Revolut charges a transaction fee to users, currently around 0.2%, through a process called interchange.
· Banking Services: Revolut also charges for its banking services, such as Plus and Premium accounts. While its standard account is free, it charges £2.99 a month for Plus accounts and £6.99 a month for Premium accounts.
· Interest: Finally, Revolut earns interest on user deposits.
Conclusion
While there's no official date for the Revolut IPO, it's a topic that's generating a lot of buzz. As one of the leading fintech companies in the UK, Revolut's IPO will be closely watched by investors and consumers alike. However, given the company's current revenue and regulatory situation, it may be a few years before we see the IPO take place.
