By Emily Nicolle
Of Financial News
Digital bank Revolut Ltd. has raised $800 million in fresh capital, making it one of the world's most valuable fintech businesses at $33 billion.
The round brought on Japanese mega investor SoftBank Corp. via its offshoot Vision Fund 2 and Silicon Valley's Tiger Global as new backers of the startup.
It represents a six-fold jump on its last private valuation of $5.5 billion, earned in February last year. The startup is now the U.K.'s most valuable privately-held fintech firm and second in Europe to Swedish payments giant Klarna Holding AB, according to data from CB Insights.
The London-headquartered firm said it plans to use the funding to power its global expansion effort, which has seen it open up in the U.S. and India as its most recent markets.
Revolut also hopes to use the cash to develop new features for its banking app. This will include new bets such as a robo adviser for digital wealth management, social tools for stock investing and more cryptocurrency options, chief executive Nikolay Storonsky told Financial News in June.
"SoftBank and Tiger Global's investments are an endorsement of our mission to create a global financial superapp that enables customers to manage all their financial needs through a single platform," said Mr. Storonsky on Wednesday.
"This funding round makes Revolut the U.K.'s most valuable fintech, demonstrating investors' confidence that we can deliver products that raise the bar for customers' expectations across the whole financial services industry."
The digital bank has battled with achieving full-year profitability as it continued to plug capital into blitz-scaling its expansion. Revolut's Chief Financial Officer Mikko Salovaara told FN it may not reach that target this year, if it chooses to use new funding resources for additional products and locations.
Its overall losses doubled year-on-year to above 200 million pounds ($277.2 million) in 2020, while revenue rose by a third to GBP222 million. More than 88% of its revenue came from customers in the U.K. and European Economic Area, while those outside the region accounted for just 1.3% as the pandemic dampened expansion plans.
Revolut said it has reached 16 million registered users of its banking app to date, meaning those who have signed up to the app and opened an account. This was a rise of 500,000 from its last numbers provided at the end of March.
The bank's closest U.K. rivals, Monzo and Starling Bank, have struggled to grow at the same pace as Revolut. Neither made such significant steps to expand overseas.
In June this year, Starling had opened more than two million accounts, while Monzo had topped five million. Despite this, Starling Bank is the only one of the three to be consistently making a monthly profit.
"Revolut's rate of innovation has redefined the role of financial services, placing [Revolut] at the forefront of Europe's nascent neobanking sector," said Karol Niewiadomski, senior investor for SoftBank's investment arm.
"The company's rapidly growing user base reflects a sustained demand for Revolut's expanding suite of services."
Revolut's raise is the latest in a spree of funding injections for fintech companies in London, which has spiked in 2021 as the City gets back on track after the pandemic. Fintech firms in the capital raised $5.3 billion from venture capital investors in the first six months of the year, breaking all previous full-year records.
(END) Dow Jones Newswires