London-based fintech startup Revolut has joined the elite ranks of so-called unicorn firms with a $1.7bn (£1.2bn) valuation following a new $250m fundraising.
Tech investor DST Global put up around half of the new money, alongside existing investors including Index Ventures and Ribbit Capital. The money will be used to target an aggressive expansion into the US, Canada, and Australia.
The payments firm’s founder and chief executive Nik Storonsky told City A.M. he hopes this round of fundraising, a Series C which brings its total fundraising to date to $340m in three years, will be the firm’s last.
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He said: “I hope we will not raise for two years – I hope we don’t [need to] raise money at all.”
The firm currently covers the cost of its operations. Transaction volumes have grown by 10 times since the last fundraising round, helping to justify a coveted valuation of more than $1bn which is five times higher than at the previous round, Storonsky said.
Venture capital investors looking for an exit will have to wait for more than two years before an initial public offering is “maybe” considered, he added. Acquisition by an incumbent is not an option, he added.
“We are not for sale because there is a huge opportunity,” he said. “We are not going to waste it by selling the company.”
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Much of the $250m will be used to put down the capital required by regulators in new countries, although the firm will also more than double the size of its workforce by the end of the year.
It will also spend money on marketing for the first time in a bid to accelerate growth further, with an ambitious growth target of 100m customers within five years.
The US, Canada and Australia will be the first targets, with a launch planned by mid-summer, followed by Singapore and Hong Kong in the fourth quarter. Russia and India are also planned for some time towards the end of 2018 or the start of 2019.
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Revolut, regulated as an electronic money institution, has quickly grown customer numbers, focusing at first on foreign exchange payments. It is now branching out into more traditional banking activities such as credit products offered through Lending Works. It also recently added a cryptocurrency exchange feature.
However, Storonsky named tech giants Amazon, Google, and Apple rather than incumbent banks or fellow fintech European unicorn Transferwise as the main threats to his business.
“When they decide to get into the fintech space they have a lot of resources,” he said. “I think it’s the most logical way of doing things.”
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