Revolut losses tripled before Covid-19, despite rise in users

Digital banking operator Revolut saw its losses more than triple in 2019, providing further evidence of strain on financial technology firms even before the Covid-19 pandemic.

Revolut, which provides bank accounts via its app, reported a pre-tax loss of £107 million (€119 million) for the year to December, compared to a £33 million loss the previous year, according to its annual report.

The company said its losses increased after its costs nearly tripled to £270 million last year as it invested in its growth and products.

The losses came despite Revolut's revenue jumping 180 per cent to £163 million, while retail customers increased to 10 million from 3.5 million. The company has previously claimed to have 1 million customers in the Republic of Ireland.

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Fintechs globally have been forced to cut costs and some have struggled to raise funding since the pandemic hit.

Revolut said it was reducing discretionary spending and keeping a tight control on costs after being hit by lower customer spending abroad, due to the virus outbreak after the reporting period ended.

However, it said it saw rising income from domestic spending and cryptocurrency trading.

“Despite the current economic challenges, we remain focused on our goal of moving towards profitability,” the company’s chief executive and founder Nik Storonsky said.

Revolut raised $80 million (€67.95 million) in a top-up fundraising at an unchanged valuation of $5.5 billion in July.

Revolut's UK rival Monzo flagged in its annual report last month significant doubt in its ability to continue as a going concern, after losses more than doubled to £113.8 million. The firm said its directors were confident in the company's ability to raise capital if needed.

Private companies including Revolut and Monzo tend to report earnings later than listed rivals. - Reuters