Crypto-friendly fintech company Revolut secures $ 500 million in funding, triples valuation to $ 5.5 billion

British fintech startup Revolut has raised $ 500 million in a new round of financing with a valuation of $ 5.5 billion.

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The round was led by Silicon Valley-based venture capital firm TCV, an early investor in companies such as Facebook and Netflix, and also attracted the support of existing investors Ribbit Capital, DST Global, Lakestar and GP Bullhound.

This means that Revolut's latest valuation has tripled from the investor's April 2018 valuation. The latest round of funding raised Revolut's total funding to $ 836 million.

According to data from venture capital analysis firm CB Insights, Revolut is now tied with e-commerce payment startup Klarna as Europe's most valuable fintech startup.

Revolut was established in 2015 and initially gained popularity by letting users spend no foreign fees when they spend money abroad. Now the company has become one of the participants in the new wave of mobile application-based challenge banks that will challenge traditional banks by providing banking services without the need for an expensive physical branch network. Its competitors include British companies Monzo and Starling, and German rival N26, which recently said it would leave the UK due to Brexit.

In recent years, Revolut has added new features to its applications, including cryptocurrency and stock trading, and more recently savings products. It now has a customer base of more than 10 million users, and its customer growth will exceed 150% by 2019. It also obtained a European Bank license from the Central Bank of Lithuania at the end of 2018, and the company said it would help it provide more services, such as loans. The company also hopes to obtain a UK banking licence.

Revolut has been looking to expand into the United States for years, and this new cash injection may bring it closer to that goal. Although efforts have been made to expand beyond Europe, such as Australia and Singapore, the United States has proved to be an insurmountable challenge for Revolut and other fintech companies due to regulatory complexity. The company said it hopes to launch in the United States in the first half of 2020.

However, it emphasized that the main purpose of the new financing was to strengthen its existing products in existing markets and to provide loan services to retail and commercial customers.

Revolut founder and CEO Nik Storonsky said in a statement:

"Our mission is to build a global financial platform-a single application where customers can manage all day-to-day finances, and this investment demonstrates investor confidence in our business model."

He added that they are "working hard to make a profit" and that investors will pay close attention to this after the company's losses in 2018 doubled to 32.8 million pounds ($ 42.4 million). It hopes to focus on subscription-based accounts, where users can pay an additional monthly fee, which can help increase their profits. Like many competitors, most of Revolut's current revenue comes from the fees it charges merchants every time a customer pays with a card.

The startup, which currently has more than 2,000 employees worldwide, strengthened its senior management team appointments last year after reporting on work culture and compliance issues, including the appointment of asset management veteran Martin Gilbert as chairman. For its part, Revolut acknowledges flaws in how it treats its employees in the early stages of operations, but declines to make recommendations about its failure to meet regulatory requirements.

Treat crypto-friendly

In March 2019, Revolut launched a service that allows its users to “automatically exchange” fiat and digital currencies on the platform.

This new feature is designed to reduce users' exposure to fluctuations in the crypto market. According to the company blog post, Revolut users can automatically convert fiat currencies (such as USD USD) into Bitcoin (BTC), Ethereum (ETH) or Ripple (XRP) and vice versa based on a predetermined target exchange rate.

In fact, as early as July 2017, Revolut began to provide cryptocurrency trading services. Then in 2018, the company announced that it would launch commission-free stock trading on its platform, so people often compare it to the US trading platform Robinhood.