Expected IPO Date: Sometime in 2022
Revolut’s most recent valuation: £24bn+ (~ $30.2 billion)
The British payment processor Revolut started in 2015 and set up its headquarters in London. The company offers several financial products and services through its financial “Super app,” which provides currency exchange, current accounts, foreign exchange, stock trading, insurance, debit cards, commodities, and cryptos; a full-service digital financial hub for most users. Currently, Revolut has broadened its reach to 35 countries, with a total of 18 million personal users and half a million business users. Through its Super app, Revolut can facilitate the exchange and transfer of 30 different currencies, and it has reached a level of 150 million monthly transactions.
So far, there has not been an announcement of a Revolut IPO date. The initial IPO process is still underway and from statements by the CEO, Nik Storonsky to Bloomberg, the company has a few more barriers that it needs to pass before an IPO can happen. Specifically, he wants to see the company with at least a “few billion dollars range in revenue a year.”
The company saw an adjusted revenue of £261 million, or $359 million, in 2020, so it has a way before it reaches the few billion dollars range.
Additionally, Storonsky has stated that, before any IPO, the company will need to update its offering to include more products, expanding its single-line product into other areas to be more competitive and provide further service to Revolut’s clients.
Revolut is also not rushing due to any cash requirements; in July 2021, Revolut raised $800 million from its investors, which put the value of the company at $33 billion. The intended use of the funds was undoubtedly what Storonsky was stating as a goal, to expand into new markets, specifically the U.S. and India, while also adding new products to their offering.
Revolut’s Value Proposition and Strategy
Revolut provides users with bank accounts, international money exchange and transfers, bill pay, budgeting tools, stock trading, and cryptocurrencies. It is the U.K.’s most valuable startup, and its funding makes it one of the top FinTechs in Europe. It does have two main rivals in Klarna and Wise, which have also seen surges of their own valuations in the past 18 months with the global shift to digital financial services during the pandemic.
Revolut is now eyeing the U.S. to introduce new products and services. It has already set up a debit card that provides currency exchange services. And it wants to introduce a new credit card to the U.S. Most recently, Revolut has partnered with Cross River a U.S. based technology infrastructure provider, that offers embedded financial solutions. Revolut can leverage Cross River’s technology and regulatory infrastructure to build its U.S. presence quickly.
The partnership can open the up the potential for U.S. consumer personal loans using the Cross River tech and additional credit offerings that are slated to launch within the next few months. This partnership is precisely the kind of catalyst needed to get the U.S. market entry of Revolut off the ground quickly. Revolut had applied for a U.S. banking licence in early 2021, but seemed to have slowly progressed since the approval process began. While the U.S. banking and finance market is likely the most competitive globally, Revolut has a strong foundation and success that it will bring across the pond to the U.S.
On what exchange will Revolut list?
Another question is, what stock exchange will Revolut want to list on? The most likely choice will be the London Stock Exchange for an IPO float. Being a British company, much of its operations focused on the U.K. If so, this would certainly be the biggest IPOs that the London Exchange has seen in quite a while.
Is a Revolut IPO worth the investment?
The returns of the London Stock Exchange and the FTSE 100 have lagged the U.S. exchanges for many years, and Revolut may be the kind of company needed to get the ball rolling. Revolut’s $30 billion (£24 billion) valuation makes it worth more than other financial services listed on the FTSE 100 index for several years, including Standard Chartered Aviva and Legal & General, which range from £16-18 billion. If Revolut’s valuation stays at this level and can raise its revenue to the point that CEO Storonsky wants to see, it will be a good deal. If the valuation grows with the revenue, then caution is warranted.
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