Revolut, Europe’s $5.5 billion digital bank startup, says losses tripled to $139.6 million in 2019

As coronavirus pandemic continues to create uncertainty around the world, many fintech startup companies are struggling to stay afloat. According to market intelligence company CB Insights, the volume of funding rounds for the fintech sector has fallen 45 percent compared to Q4 2019, and 25 percent compared to the same period last year.

“Funding conditions have undergone a 180 degree shift, and the future of fintech has changed dramatically,” market intelligence company CB Insights said in a recent report on the current crisis’ impact on global venture capital funding for financial technology companies.

One of the affected fintech startups is Revolut. We covered the London-based startup back in February after it raised $500 million at $5.5 billion valuation. Revolut, which offers banking and trading services through a mobile app, announced yesterday a total loss of £106.5 million ($139.6 million) for the year ending Dec. 31, up from £32.9 million in 2018. Revolut blamed the mounting losses on its investment in international expansion and new product offerings.

It’s not all bad news for Revolut. The unicorn startup said momentum in its business hasn’t slowed and that it added another 3 million users in 2020 despite the coronavirus pandemic. And unlike Monzo, another London-based fintech startup which warned of doubts about its ability to continue as a “going concern” in its 2020 annual report, Revolut said it has “adequate resources to continue in operation for the foreseeable future.”

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko,  Revolut is ranked as one of Europe’s top fintech unicorns, with a valuation of $5.5 billion. Revolut launched to the public in July 2015 with the aim of “building a fair and frictionless platform to use and manage money around the world” by removing hidden fees and offering interbank currency rates. Nikolay Storonsky is a former trader at Credit Suisse and Lehman Brothers. Vladyslav Yatsenko is a former Credit Suisse and Deutsche Bank developer.

The Revolut mobile app supports spending and ATM withdrawals in 120 currencies and sending in 29 currencies directly from the app. It also provides customers access to cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and XRP by exchanging to or from 25 fiat currencies.

In March 2019, an exposé of the company’s employment practices and culture was published by Wired. The report found evidence of unpaid work, high staff turnover and employees being ordered to work weekends to meet performance indicators. A more recent article also suggests that the company has responded to criticism.

Revolut became the UK’s most valuable financial technology startup in February 2020 after a funding round that more than tripled its value. This comes after the company announced it had raised $500 million from a group of investors led by the US fund Technology Crossover Ventures.