Tech

Revolut becomes latest fintech unicorn after $250 million funding gives it a $1.7 billion valuation

Key Points
  • DST Global, a company that was an early investor in Facebook and Spotify, led the funding round, which included other venture capital firms Index Ventures and Ribbit Capital.
  • The London-based firm provides a debit card that allows people to spend money in 150 currencies with no fees at a real-time exchange rate.
Revolut raises $250 million at $1.7 billion valuation
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Revolut raises $250 million at $1.7 billion valuation

Fintech firm Revolut raised $250 million bringing its valuation to $1.7 billion, the company said Thursday.

The London-based firm provides a debit card that allows people to spend money in 150 currencies with no fees at a real-time exchange rate. It has since expanded services to offer a current account, cryptocurrency trading and insurance.

DST Global, a company that was early investors in Facebook and Spotify, led the funding round, which included other high profile venture capital firms Index Ventures and Ribbit Capital.

Revolut has now raised $340 million since it launched in 2015.

The company said that it has 250,000 daily active users, with the aim of getting 100 million on board in the next five years.

Revolut faces stiff competition, however, from a number of fast-growing fintech companies including TransferWise and Monzo. TransferWise, also a U.K. start-up, reported its first profitable year in fiscal 2017. Its CFO Matt Briers told CNBC in a recent interview that it will book another year of profit in fiscal 2018. The company also launched an account and debit card aiming to take on Revolut.

Monzo is an app-only bank and offers many similar features to Revolut. Chief Executive Tom Blomfield recently told CNBC that the company is in the early stages of talks to expand to the U.S. Revolut recently launched a trial in America.

Revolut CEO Nikolay Storonsky.
Revolut

Nikolay Storonsky, CEO of Revolut, told CNBC's "Squawk Box Europe" on Thursday that it's likely only three-to-five players will remain in five years' time.

"At the moment yes there is competition but they are just building local banks. We are building global bank alternatives," he said.

Revolut has been growing quickly. The company broke even in December and said in that month, transaction volume surged to $1.5 billion, a 700 percent increase in the previous 12 months. It offers a premium monthly subscription service and is looking to expand products to include savings and direct debits.

One other product launched earlier this year was cryptocurrency trading. It has so far been offered to a limited number of customers, but Storonsky said it helped to boost the number of users on the platform.

Still, the launch came at a time when cryptocurrency markets fell sharply from their record highs last year, suggesting interest may have declined. This has not been a concern so far.

"Interest in cryptocurrencies definitely went down ... but volumes are still there," Storonsky told CNBC.