Revolut history

The virtual bank-Revolut was paired with a multi-currency debit card. This is the app that allows you to immediately convert funds from one currency to another at an interbank rate, exchange cryptocurrencies, perform free money transfers all over the world, and even buy insurance and apply for loans.
The idea when developing Revolut was a multi-currency bank card intended for converting currencies in case of trips at a favorable rate. The first investor of the project became the founder of the project, Nikolai Storonsky, who invested about £300,000 of his own savings in it. A few months later, the entrepreneur invited the former Deutsche Bank developer Vlad Yatsenko to the startup; he became the technical director. In spring 2014, Storonskiy turned for help to banking and card infrastructure consultant David Parker. The financier was skeptical about the project, but Storonskiy paid for two working days and wrote down everything that he said. At the beginning of 2015, the first prototype of Revolut was ready, and in July 2015 the application was fully operational. “When 2,000 people came in the first days, it was difficult. We had only four people in the team and two in support,” Yatsenko said.
Revolut’s original business plan was to have 30,000 users after a year of operation. In reality it turned out to be 10 times more. “When I wrote the business plan, I didn’t even think about it – I just put the figure at 30,000, assuming that it could be much less or much more.”. In the end, it turned out 10 times more, Storonsky says in an interview with Forbes. Almost immediately after its launch in 2015, Revolut tried to enter the Russian market, but immediately faced a problem: when topping up from Russian cards, the service had to pay an additional 2% per transaction. Already in the autumn of 2016, the service announced that it was leaving Russia.
“It was a brilliant idea for the British market. By allowing users to convert currencies within the app, they were able to attract thousands of users every day w/o spending on adwords. Nobody’s ever done that before,” Forbes says. Revolut grew fast and attracted 100,000 users first six months. More than once, Nikolai Storonsky has said that his company at that time did not spend anything on marketing – word of mouth acted. According to the PitchBook database, in February 2016, Storonsky’s company attracted its first seed investments in the amount of $4.9 million at a valuation of $13.19 million (investors included British fund Balderton Capital, and German Point Nine Capital), while in July 2016 Round A of Revolut got another $12.02 million at a valuation of $48.85 million by Index Ventures and Ribbit (new investors).
In parallel with attracting venture capital investments, Nikolai Storonsky decided to run a crowdfunding campaign-in fact, Revolut did this twice-once in 2016 and again in 2017. Probably, Storonsky and his colleagues were inspired by the successful example of their closest competitor, the British neobank Monzo. I’m thrilled to say that we raised £1m in 96 seconds, the fastest crowdfund in history – over £10,000 a second,” wrote Monzo’s chief executive Tom Blomfield in a corporate blog post. Storonsky hoped that crowdfunding would attract not only money but also new clients: “10,000 private investors bring much more new users than one investment fund.” His calculation paid off: 433 private investors invested £1 million in Revolut; one of them did not spare £500,000. It received great publicity that one of the investors was British tennis player Andy Murray.

How does Revolut work?

This London-based fintech company positions itself as a kind of digital alternative to banking, with much more affordable currency exchange and cheaper financial transactions. First, customers were given a prepaid card and an application which let travellers make use of different currencies without extra costs. Since that moment, more products have been included, and the new features of Revolut include:

• crypto-currency exchange
• travel insurance services
• cost analytics
• international transfers
• balance interest rate

The bank account can be opened with the help of Fintech application in several minutes and a physical or virtual card can be issued. When depositing money into your account, it is possible to immediately choose a currency that is convenient for you. You can operate the account via the application.

Unlike the British rivals like Monzo and Starling, Revolut focuses on the expansion across borders instead of building a full-service bank in one country – the possibility to choose your IBAN country and account currency(s).

After Brexit, it obtained a banking license in Lithuania to keep operating within the EU and also applied for licenses in the UK and the US.

Revolut Company Review

Founders of Revolut include Nikolai Storonsky and Vlad Yatsenko. Storonsky was born in Russia but has lived in Great Britain since he was 20 and is its citizen. Nikolai gave up Russian citizenship in 2022.

Vlad Yatsenko still has dual British-Ukrainian citizenship and has lived in the United Kingdom since 2010.

Before founding the startup, Storonsky worked for Credit Suisse and the international financial company Lehman Brothers Holdings Inc. Yatsenko had worked five years developing financial systems for large investment banks such as Deutsche Bank. The founders said they launched their project because they were frustrated by the pace at which traditional banks introduced digital services for young customers who prefer to carry out all transactions via a smartphone.

In July 2015, a startup called Revolut was founded based on the Level39 technology accelerator. Yatsenko became the CTO and Storonsky the chief executive of the company.

Revolut Metrics

The main activity of the business of Revolut is connected with the tourist services. Though the sector has fallen due to the pandemic, the total revenue grew 34% in 2020.

• At the end of 2020, it boasted more than 14.5 million retail active users and 500 thousand companies as its customers.
• Revenue for 2020 was $361 million, 57% greater compared to 2019.
• Total income reached $170 million.
• In the second half of 2020, Revolut reached profitability.

In 2021, it became the most valuable startup in the United Kingdom, reaching a $33 billion valuation. The investment round was led by the Japanese holding company SoftBank and the American investment firm Tiger Global Management.

If you are interested in getting an EMI/PSP license in Europe, our international team of lawyers will be glad to assist you.

Pros and Cons of Revolut

Now, let’s take a look at the main pros and cons of neobank Revolut, which fits particularly for the following categories of users: advantages and disadvantages of:

Revolut Pricing

At the moment, there are four tariff plans available in the service:

Standard: Free basic package, including free card. Cash withdrawal limit without commission – €200 per month or five withdrawals per month. Interest to the balance is 0.15% per year. Currency exchange up to £1000 per month at the interbank exchange rate. Cryptocurrency exchange fee is 2.5%.

Plus: €2.99 per month. Besides the features of the standard plan, it offers free card delivery. Interest on the balance is 0.3% per annum. Includes insurance and ticket refunds for events.

Premium: €7.99 a month. Free express card delivery. Cash withdrawal limit without commission is €400 per month. One international account payment per month without commission. Interest on the balance is 0.65% annually. Unlimited currency exchange at the interbank exchange rate. Commission for cryptocurrency exchange is 1.5%. Free medical insurance for travelers, baggage insurance.

Metal: €13.99 per month. In addition to the features of a premium plan, it gives an increased cash withdrawal limit without commission of €800 per month. Exclusive metal card and cashback — 0.1% per annum in Europe and 1% outside Europe. Three international account payments per month without commission.

Money Transfers in Revolut

The service does not charge for transfers in euros within the area of the Single Euro Payments Area.

For the transfer in local currencies, an example would be sending Polish złoty from France to Poland, the fixed fee being 0.3%, not less than £0.3, not more than £5.

Users can make 1 or 3 international transfers free of charge in “Premium” or “Metal” tariff plans, respectively.

In 2022, the company launched the online payment service Revolut Pay, rivalling PayPal and Apple in the online trading service market.

The commission for retailers will be about 1%, and it will be possible to return cash to consumers.

Revolut Security

The online service has recently been criticized for a lack of security. According to the Telegraph, from July to September 2018, neobank turned off an automated system built to block suspicious transfers.

The internal probe into the incident was conducted only in late 2018. The decision came after the system had blocked 8,000 legitimate transactions. “The system was turned off in error,” said the Revolut Chief Legal Officer Tom Hambrett. In September 2018, the company introduced a new anti-fraud system.

UK regulators previously suspected the neobank ran illicit activities through the platform, while Lithuanian authorities conducted various background checks prior to giving a banking license to the company.

It invests a lot in the compliance direction from all the funds it has managed to raise. According to the website of Revolut and according to its anti-fraud system, the algorithm of machine learning now identifies suspicious transactions and is 7 times better than that of major banks.

How to Register in Revolut

Price of Revolut

In April 2018, the valuation of Revolut increased to $1.7 billion. The venture fund DST Global by Yuri Milner and investors put $250 million into the company.

In March 2018, the volume of transactions processed by the service reached $1.6 billion, and the number of users reached 2 million. Revolut intended to invest the raised funds in entering the US, Canada, Singapore, Hong Kong, New Zealand, and hiring 350 to 800 employees. According to Storonsky, the company’s entering into a new market costs $0.5–1.5 million excluding team hiring.

After the company’s founder, Storonsky, had said it would be more interesting for Revolut to first conquer the US, Southeast Asia, and Australia with New Zealand after its failed attempt to enter the Russian market in 2015. The company had secured a banking license in Lithuania as late as the end of 2018.

The last week of February 2019 turned out to be difficult for Revolut. In addition to reports about problems with the transaction monitoring system, there were materials criticizing corporate culture in Revolut. The financial director Peter O’Higgins left the company after reports in the press that the service for several months had disabled the system of tracking suspicious transactions.

Storonsky said that the quitting of the financial director was connected with the scaling of the company. Wired reported, referring to former Revolut employees, that high speed in growth comes at an expense for the ones working in the company: Employees face unpaid work and unreachable goals, while the company sees high turnover.

After publications about the corporate culture of Revolut, Storonsky has also made an open letter on the company’s blog to explain the situation: “We made mistakes in the past, including in hiring. From each mistake, we have learned a lesson and are moving forward. Everything else is greatly exaggerated.”

Revolut Card Overview

A multi-currency payment card has been the principal product of Revolut since the company was founded. This card enables almost commission-free immediate money transfers in 30 currencies and serves for purchases and cash withdrawals in 150 currencies, including but not limited to Russian rubles, US dollars, euros, and British pounds, at the so-called interbank exchange rate that saves on currency conversion for the user.

The card also supports cryptocurrencies, though not in every country. Such popular cryptocurrencies as Bitcoin, Ethereum, Litecoin, Ripple, and a few others are supported.

How to Get a Revolut Card

This card is issued online with further postal delivery. There are no branches of Revolut nor field specialists; the company interacts with clients remotely. You can get the card in the United States of America, European Economic Area, and Switzerland:

To apply, use the mobile app. Install it on your device, provide your phone number, and set a PIN code which will be required in confirming all transactions. After that, fill in personal and passport information and attach scanned copies of your passport and proof of residence for identity confirmation. After successfully confirming your identity, activate the account by transferring a small amount of money, usually £5-£10.

Immediately after opening, you are given a virtual card, already available for online use or linking with your smartphone. You can also request a physical card by specifying the delivery address. The completed card will then be sent by post within 1-10 business days either to a branch or to a residential address and will be subject to various commissions, starting from £4.99 depending on the country of receipt.

How to Use a Revolut Card

It is managed online via the bank and a mobile application for iOS and Android. They have all the functionality to make payments and monitor transactions. On the security settings, there is an option to add more besides setting limits or restrictions, such as disabling contactless or magnetic features.

Switching between accounts of currencies and transfers between them can be done through the app. It supports 30 currencies for settlements and exchanging: US dollar, euro, British pound, yen, Swiss franc, and so on. All accounts can be funded with cash or from another card, including an external bank. The money should be deposited in the native currency of the account to avoid additional conversion. It allows using auto-payments and money requests from other service clients. Transfers to countries where the service is not present may be charged additionally.

If a purchase or cash withdrawal is made in any currency other than that of the account, an interchange is performed at the interbank exchange rate. No commissions are charged for almost all currencies from the main list. At weekends (surcharge according to London time), a fee in the amount of 0.5-1% is applied for supporting the exchange rate. Cash withdrawals are possible at any ATM, while depositing cash is not provided for.

With one client, up to three plastic and five virtual cards can be issued at the same time. Reissue of a plastic card in case of loss, theft, or compromise of the card is £5. Planned reissues are free. Delivery is charged separately according to the tariff and region. Virtual cards are issued and closed free.

In general, the Revolut card looks comfortable to actively use. Among the big pros are the following:

• No commission on currency accounts and transfers in accordance with the free tariff
• No additional commission at all for the funding and exchange of currency, so it is really comfortable for those people who actively use different currencies
• Virtual cards allowing contactless payments via NFC can be opened under any tariff
• Registration and card issuance are faster, with less stringent requirements compared to other European banks
• Advanced security settings, including the ability to disable certain functions and location tracking
• The app is available in multiple languages

Revolut Services

Revolut offers accounts in British pounds and euros, debit cards, currency exchange, stock trading, cryptocurrency exchange, and peer-to-peer payments. With the mobile app at Revolut, users are able to withdraw cash from ATMs in 120 currencies and transfer money in 29 currencies directly from the app. It also comes with additional fees, varying from 0.5% to 2% for weekend payments to hedge against changes in the exchange rate.

It grants access to such cryptocurrencies as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Cardano, and XRP, which users can exchange for 25 fiat currencies. For such a purchase or sale, it charges 1.49% in commission. One thing important to note is that cryptocurrency cannot be deposited or spent; it can only be converted back to fiat within Revolut. Furthermore, a commercial bank in New York with which Revolut partners forbids the transfer of fiat money to or from cryptocurrency exchanges.

Stock trading is also available in Revolut, providing access to a variety of US stocks and buying/selling fractions of stocks. Stocks acquired through the app cannot be transferred to any other broker; instead, they may be sold or converted back to cash and then withdrawn.

Criticisms of Revolut

Automatic Account Locking

Like regular financial institutions, Revolut uses algorithms in the detection of money laundering, fraud, and other criminal activities. However, algorithms on Revolut allegedly trigger automatic suspensions. It is programmed to block an account temporarily and queue it in until a compliance agent reviews the case. In 2020, there were reports about mistakenly suspended Revolut accounts for several weeks or months due to the lack of an adequate number of compliance agents to review automatic suspensions in good time. The clients whose accounts were blocked could not reach the regular support chat of Revolut but were routed through automatic responses from a chatbot.

According to Finews.com, about 500 customer complaints about blocked accounts and no response to their queries from the service support of Revolut were on the public internet forums in 2020.

Employment Practices

Revolut has been criticized over some employment practices. The following are identified:

• Asking employees to work on free trials as a part of a trial task while hiring
• Forcing overtime for employees to hit targets
• High attrition, with over 80% of ex-staff members working less than one year

Back in 2019, the chief executive Nikolay Storonsky announced to staff that anyone rated “significantly below expectations” in the review should be axed without debate. In 2020, Revolut attempted to avoid layoffs by offering staff the opportunity to take an unpaid portion of their salary in return for double the equivalent in Revolut stock options.

In 2023, new efforts were reported from Revolut to make its corporate culture less “toxic” and more “humane” by setting up a department comprised of psychologists and behavioral science specialists. The link with this effort reportedly has something to do with the desire of Revolut for a license in the UK, to which the company has denied it.

In March 2019, Wired ran an exposé on the hiring practices and work culture of Revolut, showing unpaid work and high turnover, with directives to work on weekends to meet performance targets.

In June 2020, another expose from Wired described the layoffs of employees at Revolut during the COVID-19 pandemic. The alternatives presented to the workers—particularly those in Krakow—were: unsatisfactory performance dismissal or mutual agreement for the worker’s voluntary leaving from work, so as to reduce the number of redundancies announced and proposed by the company, totaling 62 in all. Current and former employees alike swore that they were coerced into accepting their dismissal, whereas the reasons the company had were not sufficient enough for such a legal measure. In Porto, workers were said to have been made to accept a scheme of sacrificing part of their wages as the only means of maintaining their jobs.

Company History of Revolut

Revolut was founded on July 1, 2015, by Nikoley Storonsky and Vlad Yatsenko. Based initially at Level39, a financial technology incubator in the Canary Wharf area of London, the firm started its operations.

In 2017, the bank introduced cryptocurrency services including the trading of cryptocurrencies. On April 26, 2018, Revolut raised $250 million in a Series C funding round which valued the company at $1.7 billion and landed it “unicorn” status.

In December 2018, the European Central Bank, in participation with the Bank of Lithuania, issued a license to Revolut as a Challenger bank, which gave the right to receive deposits and provide consumer loans but not investment services. At this time, the Bank of Lithuania issued an electronic money institution license.

In March 2019, Revolut merged with Dax. Later that year, its CFO Peter O’Higgins resigned from the company over claims that it was violating regulatory compliance rules, which Revolut denied. In July 2019, it unveiled commission-free stock trading on the New York Stock Exchange and NASDAQ for its users, starting first with Metal plan customers.

In August 2019, the company announced it had hired several individuals that had prior experience in the traditional banking sector. These included Wolfgang Bardorf, former CEO at Goldman Sachs and Global Head of Liquidity Models and Methodologies at Deutsche Bank; Philip Doyle, who formerly served as head of financial crimes at ClearBank and was a fraud prevention manager at Visa; and Stefan Ville, who was formerly senior vice president of finance at N26 and corporate finance manager at Credit Suisse.

In October 2019, Revolut announced a deal with Visa for its global expansion into 24 new markets and adding 3,500 employees. In February 2020, the company raised another funding round which values the company at £4.2 billion, the most valuable UK fintech startup.

In March 2020, Revolut expanded into the U.S. market, and in August, it launched its finance app in Japan. The company became profitable in November 2020. In January 2021, the company applied for a banking license in the UK, while in March 2021, the company filed an application for a banking charter in the United States through filings with the FDIC and California Department of Financial Protection and Innovation.

In July 2021, the platform raised $800 million from investors including SoftBank Group and Tiger Global Management in a funding round that valued the company at US$33 billion, making it the UK’s most valuable fintech startup. In January 2022, Revolut started to operate as a bank-as opposed to being an electronic money institution-in 10 European countries including Belgium, Denmark, Finland, Germany, Iceland, Liechtenstein, Luxembourg, the Netherlands, Spain, and Sweden.

By March 2022, Revolut had 18 million customers, and the transactions running on a per-month basis reached 150 million. In September 2022, the firm confirmed that personal information of 50,000 customers out of 20 million was exposed after falling in the line of a cyber-attack. In the same month, the UK’s Financial Conduct Authority added Revolut to its list of companies authorized to sell cryptocurrency products and services, even though the company had been offering cryptocurrency trading since 2017 but was unregulated.

In November 2022, Revolut reached 25 million customers. In January 2023, it was announced that Revolut was migrating 2 million of its Irish customers onto its new Irish branch-by transferring their accounts from Lithuanian IBANs onto Irish IBANs-in an attempt to compete with incumbent banks after the exit of RBS and KBC Bank from Ireland. In 2023, Revolut accounts finally began to allow crypto holders in general to stake with proof-of-stake in the UK and the European Economic Area.

History of the Company Revolut by Years

Expansion et essors financiers de Revolut

Entrée sur le marché japonais

Revolut is entering Japan after its government began rapidly adopting the use of digital technologies in upgrading its financial services industry, including a planned upgrade to the out-of-date interbank transfer system. Unlike the Chinese, who have moved away from cash and ATMs, embracing mobile fintech apps, the Japanese continue making heavy use of cash and ATMs, Nikkei reports.

$80 Million Investment and $5.5 Billion Valuation

In late July 2020, it was announced that Revolut had secured an $80 million investment, giving the digital bank—which was founded by Nikolay Storonsky—a valuation of $5.5 billion. This came from the US fund TSG Consumer Partners. According to Storonsky, “Revolut was not actively seeking additional investments, but the offer from TSG seemed interesting because it suggested cooperation.” The funds will be deployed to build new features within the US service and a range of credit products across Europe. Revolut intends to use some of the proceeds for a subscription management tool that allows users to see and cancel their subscriptions directly within the app and notify them of when free trial periods are ending.

According to Financial Times, with the new investments, this would give a big lift to this company, which in turn is dealing with the coronavirus pandemic and losses in revenue. With the suspension of international tourism, the number of card transactions in Revolut decreased by 45%. The advantage is currency conversions and cross-border money transfers.

According to Storonsky, the sharp decline in card transactions was partly offset by increased revenue from other services, including cryptocurrency trading. The setback notwithstanding, the startup still targets turning profitable by the close of 2020. In its rapid rise, Revolut has been accused of poor customer service and alleged regulatory breaches, as FT cited in a publication. However, this startup refers to this criticism as unfair and adds prominent veterans of the financial industry to its board, including Chairman Martin Gilbert, in an effort to clean up its image.

Forbidden Withdrawal of Cash with Cryptocurrencies

In June 2020, Revolut decided to make a big turn and give up the cash withdrawal option for cryptocurrencies. By that move, though clients still have ownership rights to their cryptocurrencies, they cannot transfer these to users outside of the Revolut service. Also, the cryptocurrency option stopped allowing card spends. The service previously supported Bitcoin, Bitcoin Cash, XRP, Ethereum, and Litecoin.

Entry to the U.S. Market

In late March 2020, after its entry into the U.S. market, Revolut finally launched its app in 50 states. For this deployment, American Metropolitan Commercial Bank has partnered with the company by providing its financial infrastructure. The offices of Revolut in the U.S. are located in New York and San Francisco, while the fintech platform is available all over the country on iOS and Android. Though it currently offers American users only a fraction of the functionality available to European ones, expansion options are expected to include buying cryptocurrencies and investment in the stock market. Already, it’s possible for American users to get paid two days in advance, simply by sharing the banking details of Revolut with their employer. Other perks include low-fee currency conversions, expense notifications, and budgeting assistance.

$500 Million Investment and $4.6 Billion Business Valuation

On February 14, 2020, it was announced that Revolut had closed a funding round, raising around $500 million in investments and reaching the valuation of $4.6 billion—nearly triple the value compared to 2018. The main investor of the financing deal was the Technology Crossover Ventures fund. Another contributor was the Bond Capital fund, founded by venture investor Mary Meeker. Existing investor Ribbit Capital participated in the funding round too. The company had received a total of $500 million in funding by selling new shares, along with a $1 billion credit line.

In February 2020, according to the words of the company’s Chief Operating Officer Richard Davies, Revolut remains confident that it can turn profitable fast, although operational losses have still been incurred.

With its newly minted 30% stake in the company, according to sources at Forbes, Revolut founder Nikolay Storonsky joins the ranks of new billionaires, netting worth $1.65 billion.

Revolut: The Most Valuable British Fintech Startup

In late February 2020, after an investment round, the valuation of the online bank Revolut reached $5.5 billion and thus became the most valuable British fintech startup. It had beaten the previous record set by Monzo, whose market value was £2 billion back in 2019. CB Insights—a company that specializes in venture financing market research—also considered Revolut as the most valued European fintech startup, together with Klarna.

The $500 million raised by Revolut in February 2020 was the largest investment to that date into the European fintech market. British authorities said this investment was a vote of confidence in the financial sector as concerns mount over Brexit. Including this round, Revolut had reeled in $836 million. The money would be used to develop new banking products and expand banking operations in Europe.

As of 25th February 2020, it had 10 million customers globally, offices in 23 locations, and 2,000 employees, half of which were based in Krakow, Poland. Though high churn has been reported, replacing staff burned out by uncompensated overwork, along with an unrealistic distribution of tasks. A representative of Revolut also added that their company’s culture changed as fast as its business did, despite claims of high turnovers the actual number was below 3%.

How did it go on in 2020

At the end of 2020, Revolut had revenues of £222.1 million—a one-third increase from the previous year. However, its losses almost doubled to £201m. This is mainly caused by business development expenses and enlarged workforce. In 2020, these administrative expenses more than doubled to £266 million ($369 million) from £125 million ($173 million) a year earlier. Of this, employee-related costs tripled to £170 million ($236 million), while the fintech firm also jacked up spending on risk management and compliance.

Adjusted for the fair value increase of cryptocurrency assets, revenue from its cryptocurrency operations came in at $54 million. At the end of 2020, the retail customer base reached 14.5 million, up 45% year-on-year, and business customers amounted to 500,000, twice as many as in the previous year. The company planned to apply for a banking license in Great Britain until 2022 and also filed an application for the same license in the United States. Business was going to keep further expanding and enter the Latin American markets.

Despite all this, the UK remained Revolut’s biggest market with more than 88% of unadjusted revenue in 2020. The other European markets accounted for about 10.2% in revenue, but the markets in Japan, Australia, and the US were really negligible. This was when Bloomberg reported that Revolut was planning to raise new investments at a business valuation of $20 billion.

2021 Developments

Banking License in Lithuania

In mid-December 2021, the European Central Bank replaced the specialized bank license of Revolut Technologies UAB with a banking license. After license renewal and extension, Revolut Bank UAB, founded by Nikolay Storonsky, was considering extending its services to include deposit taking, lending, card payments, direct debit, credit transfers, cash withdrawals, money transfers, and account information services. Until December 2021, these services were provided by the Lithuania-licensed electronic money institution, Revolut Payments UAB. At the beginning of October 2021, permission for the reorganization of the specialized bank by way of merger with Revolut Bank UAB was issued by the Bank of Lithuania.

Storonsky cofounded Revolut back in 2015, which launched with just a currency card that was connected to a smartphone app. Over time, it added everything from various cryptocurrencies and stock trading through insurance to the booking of vacations. In scaling, it had onboarded more than 16 million customers across 35 countries by early 2016.

By the end of Q3 of 2021, Revolut Bank UAB attracted residents’ deposits totaling €395 million and granted residents loans totaling almost €12 million. Starting from 2019, Revolut Payments UAB has been processing payment operations worth €100 billion, earned close to €170 mln of operational income, holds more than 50% of the market of electronic money and payment institution of Lithuania.

Revolut’s Acquisition of Nobly POS and Recent Developments

In November 2021, Revolut entered the fintech services space for restaurants and hotels by acquiring Nobly POS. Terms were not disclosed.

Funding Round and Valuation

In mid-July 2021, Revolut raised $800 million in a funding round led by SoftBank and Tiger Global. That round brought the valuation of Revolut to $33 billion—six times more than $5.5 billion back in 2020. With funding, Revolut became the second-largest fintech unicorn in Europe, second after Klarna, and took first place as the UK’s largest fintech startup, outpacing Checkout.com.

This new investment came in from SoftBank’s Vision Fund 2, along with the US hedge fund Tiger Global, collectively owning less than 5% of Revolut’s shares. Revolut said the funds would be invested in marketing and product development, though more particularly, it is looking to accelerate growth in the US and India. “Revolut clearly will go into an IPO when that time is right, but certainly not in 2021,” said Salovaara.

The founder of Revolut, Nikolay Storonsky, underlined the growth strategy of his firm by increasing the number of its services. Those include cryptocurrency services, stock trading, business accounts, and many more. By July 2021, it had approximately 15 million private customers and 500,000 companies, processing over 150 million monthly transactions.

Profitability Achieved and 2021 Financial Performance

For the year ended December 31, 2021, Revolut booked its first-ever net profit of £26.3 million ($31.3 million on March 9, 2023), while revenue for 2021 tripled to about £636 million, or roughly $769 million, from £220 million in 2020. Revenue had grown at a rapid enough pace that the company, founded by Nik Storonsky, reached profitability.

In the Series E funding round in 2021, Revolut raised $800 million, adding 5 million customers to its base in the entire year. The users with paid subscriptions grew 75%, while the size of the weekly audience of active users grew 50% more.

In 2022, Revolut continued its growth trajectory with revenue up about 30%, topping £850 million ($1.01 billion). The employees doubled in 2022 to more than 6,000.

2022 Security Incident

In September 2022, a cybersecurity attack hit the firm of Revolut, where an unauthorized third party accessed the personal information of tens of thousands of customers. The incident was so focused on the target that, according to Revolut, the unauthorized access regarded only 0.16% of its customers for a short period of time.

According to information provided by the State Data Protection Inspectorate in Lithuania, where the online bank Revolut has a license, 50,150 customers were affected. In the European Economic Area, 20,687 customers were potentially impacted, and only 379 Lithuanian citizens were among them. The data included email addresses, full names, mailing addresses, phone numbers, limited payment card data, and account information.

The company also explained that the types of data which were compromised actually varied depending on each customer and did not include any card details, PINs, or passwords. What this means is that because of the quick response from the company, they were able to decrease the risk to its customers through isolation of the attack. Following the incident as a precautionary measure, Revolut created a focused team for the end-to-end monitoring of customer accounts to ensure that funds and data are kept secure. The customers were advised to be on guard against messages asking for personal information. This is because Revolut would not call clients over the incident or ask for any confidential information.

Crypto Services Approval and Expansion in the European Economic Area

In August 2022, it had given approval by the Cyprus Securities and Exchange Commission to operate crypto services in the EEA, including 27 European Union countries, Iceland, Liechtenstein, and Norway.

The Cypriot regulator greenlit Revolut as the very first crypto asset service provider. However, it also secured permission to work with crypto assets from the Central Bank of Spain and the Monetary Authority of Singapore.

Previously, in a move to position itself as a proper bank, Revolut gained a banking license from the EU in Lithuania that enabled it to let customers deposit money and also offer lending to retail and business customers. Of course, before that licensing, it was easier to open an account with Revolut than it was with traditional banks because users did not have to go through heavy Know Your Customer processes, as TechCrunch has pointed out.

Simplified proceedings for obtaining licenses, which concern the operation of electronic money and payment services, had made Lithuania a very attractive location for Revolut. An electronic money or payment license may be issued within a record three months, against two or even three times longer in any other EU jurisdictions, including preparation. In addition, the government passed in legislation that regulated platforms on peer-to-peer lending and crowdfunding, with capital requirements for banking licenses fivefold lower compared to other European Union countries.

With the license it had just obtained, Revolut was planning to introduce new features in the UK, France, Germany, and Poland. From now on, users of those countries would be able to get a real payment account along with a prepaid debit card without upfront fees within the forthcoming months.

In case the money is transferred to its infrastructure, Revolut’s assets would be covered up to €100,000 under the European Deposit Insurance System; therefore, it would give a bigger confidence for the users to deposit their salaries and big amounts of money on the platform.

UK Banking License and Closure of Moscow Office

In May 2022, it had emerged that, per a report by Bloomberg, it was having a hard time getting a banking license in one of its biggest markets: the UK. The founder, Storonsky, believed that such a license could be issued earlier in the year-to-date, but as of the report, it had not happened as such. It examined the cryptocurrency trading service of the firm and the connection of its founder with Russia. It drew the company to shut down its Moscow office.

$20 Million Theft Because of System Flaw

In early July 2023, it was shown that the company Revolut suffered from the theft of more than $20 million. According to Financial Times, this problem concerned vulnerabilities in the system of payouts by Revolut. The differences between the European and American systems of payouts forced the platform to make a mistake in refunds at its own expense.

The problem first showed up at the end of 2021 and by the beginning of 2022, organized cybercrime groups had already managed to take advantage of the weakness. This compelled users to do expensive purchases, which were then recalled. The money could, therefore, be taken out via ATMs. The extensive fraud was not picked up by the systems at Revolut, and it came to light only because a US partner bank informed the fintech firm that the account balance was less than expected. It was corporate funds of Revolut, not the customer accounts. The problem was fixed by spring 2022.

Although the company Revolut managed to return a part of the ~$23 million funds stolen, the net loss reached ~$20 million—nearly two-thirds of the startup’s profit for 2021. The UK Financial Conduct Authority ordered an independent review of policies in place at Revolut on preventing and detecting financial crimes. Revolut refused to comment on the situation.

Bank of England to Refuse License Application of Revolut as a Bank

In May 2023, it was reported that the Bank of England was going to reject the application of Nikolay Storonsky for a license as a bank. Audit firms said they can’t verify the “completeness and accuracy” of revenues from three business units of Revolut amounting to £477 million, which is 75% of the firm’s total revenues.

Hiring Psychologists for Improvement in Team Relations

With critics attacking its corporate culture, the announcement by Revolut under Nikolay Storonsky said it would hire psychologists back in January 2023, attempting to introduce a more “human approach” into the corporate culture of the company. The new behavioral science group was charged with fostering a workplace where employees treated each other more “humanely,” as well as collaboratively and respectfully “at all times.” The company also would rewrite its website description of its corporate culture, moving from focusing on a “very high bar” to one that is more inclusive. Former employees described a culture of “intense competition” where people were generally pleasant with one another but also “very combative.”

Francesca Carlesi Appointed CEO, UK Operations, as Banking License Sought

Francesca Carlesi, former Deutsche Bank and Barclays executive, with almost 15 years of experience in the financial services industry, will join the digital banking company Revolut as its new CEO for the United Kingdom. She will be at the head of Revolut in the UK, while she leads the banking division once a license has been granted. As of the submitted application in 2021, Revolut was actively pursuing a banking license in the UK.

European fintech firm Revolut said on Thursday it had hired former Barclays executive Francesca Carlesi as its new CEO for the UK. She has held roles at Deutsche Bank and spent 15 years in financial services. Most recently she was chief executive of digital mortgage lender Molo Finance. This appointment was not related to its bid for a banking license, a representative at Revolut said. She will be responsible for the firm’s operations in the UK, and once a banking license is granted, she will spearhead the company’s banking business. The appointment comes as Revolut builds its local presence while it awaits the highly-sought-after UK banking license. A spokesperson for the company declined to comment on the status of its application.

Meanwhile, the banking license will allow Revolut—featured in CNBC and Statista’s top 200 global fintech rankings—to sell credit products, including mortgages, personal loans, and credit cards. It will also let Revolut attract more loyal users who will benefit from deposit insurance of up to £85,000.

This could prove to be a lucrative business direction for the firm, allowing it to generate interest income at a time when interest rates are at multi-year highs. Since the application was filed in 2021, Revolut has been in discussions with the Bank of England and the Financial Conduct Authority about obtaining a license in the UK. So far, it has always resisted this on the back of its internal working culture, accounting problems, and a very complicated share structure. This year Revolut filed late its financial reports, leading to questions about how ready the company was to be a fully licensed bank. To respond to the criticism, Revolut says that it is working to entrench better internal controls.

The project Revolut has been successful and attractive, especially in regard to the generally conservative position of European banks. It was able to offer a multi-currency card under favorable conditions and other financial services with the possibility of management directly in the application. However, comfortable use is possible only in countries where Revolut operates officially.

The Revolut card is suitable for those who frequently make currency payments, such as travelers, working with foreign companies, or moving to the countries where the service is available.

Revolut is an international banking service that provides multi-currency cards and additional services for them. Its offering includes the following features:

• The card allows fee-free money transfers in 30 currencies and makes it possible to pay in 150 currencies.
• The standard tariff is serviced free of charge, and all the services which are needed are available.
• The card is managed in the mobile application; it has both physical and virtual versions. It provides for contactless payment.
• The functionality in the application: Payment, Transfer, Currency exchange, Advanced settings, Access to additional services.

The Regulated United Europe lawyers can support your fintech project at all stages of licensing and assist in buying ready-made solutions.

Also, lawyers from Regulated United Europe provide legal services for obtaining a Lithuania crypto license..