Revolut Achieves Record Profit, Seeks $40 Billion Valuation Amid Regulatory Scrutiny

Revolut, the British fintech giant, reported a landmark pretax profit of £438 million ($553.81 million) for the year 2023, marking a significant turnaround bolstered by robust user growth and a surge in interest-related income.

The company's latest financial results, unveiled on Tuesday ahead of schedule, represent a pivotal moment after facing previous delays in publishing accounts.

Victor Stinga, interim CFO of Revolut, emphasized the company's strides in financial transparency, stating, "Improving financial controls and making sure we bolster our team, being able to release these results within six months, is part of that journey." This move is seen as crucial as Revolut eyes a potential public listing, though Stinga declined to comment on specific IPO timelines.

Revenue nearly doubled to £1.8 billion in 2023, surpassing expectations, driven in part by interest income, which soared to £500 million from £83 million in the previous year. Revolut had previously recorded a pretax loss of £25.4 million in 2022 following a £40 million profit in 2021.

With aspirations to solidify its position as Europe's most valuable startup, Revolut aims for a valuation exceeding $40 billion through a $500 million share sale, up from the $33 billion valuation it achieved in 2021. The company, founded in 2015, boasts a global customer base of 45 million, with a notable increase of nearly 45% in customer numbers last year.

CEO Francesca Carlesi expressed optimism regarding Revolut's application for a UK banking license, stating, "We are by nature optimistic but you know at the same time, I really don’t think we should put any timeline to this." The application, initially filed three years ago, is still pending approval, with Carlesi noting the complexity of the regulatory process.

CEO Nikolay Storonsky echoed confidence in the licensing process, affirming that Revolut continues to collaborate closely with UK regulators. Despite these efforts, Revolut has faced scrutiny over its financial reporting and regulatory compliance, with BDO previously unable to independently verify a significant portion of the company's reported revenue.

Revolut's annual report also highlighted a substantial growth in its customer loan book, which surged to over £500 million in 2023 from £204 million the previous year. The company's success comes amidst a challenging landscape for Britain's fintech sector, which has seen investor skepticism and pressure for profitability following the highs of the pandemic-era valuations.

As Revolut navigates these challenges, its leadership remains committed to advancing financial controls and regulatory compliance, essential steps towards its long-term strategic goals in the competitive fintech arena. 

By fLEXI tEAM