Losses at fintech behemoth Revolut more than doubled to £33m in its latest financial year, as it ploughed money into a massive expansion.
Revenue rose 354 per cent year on year to £58.2m in 2018, according to accounts filed today. However the cost of sales rose 247 per cent, meaning the fintech recorded a loss after tax of £32.8m, from a loss of £14.8m in 2017.
The figures come as Revolut is expected to raise a funding round before the end of the year, which sources suggest will be in the region of $500m.
Data crunched by FT Alphaville yesterday showed chief executive Nikolay Storonsky personally netted $14.5m after selling around three per cent of his stake in Revolut last August, following the company’s last funding round of $250m.
Co-founder Vlad Yatsenko sold under 20 per cent of his shares for $8.7m, leaving Storonsky as by far the fintech firm’s largest shareholder. Former chief financial officer Peter O’Higgins, who departed amid a transparency scandal surrounding Revolut’s sanctions screening systems and customer complaints, sold his entire shareholding which was worth $1.8m.
Revolut said today its customer base hit 7m earlier this year, up from 3.6m at the end of 2018. It said it signed up 800,000 new users in both August and September.
“The leap forward in revenue, and customer numbers, since the beginning of 2019, shows that the reason we started this business continues to be vindicated,” chief executive Nik Storonsky said.
“We are very proud of the uptake so far and it’s great to see so many of our customers using us for their everyday banking needs.”
Revenue in 2019 is set to triple 2018’s figure, the fintech predicted today, citing 1.1m daily active users and 3.7m monthly active users as it targets £180m in sales.
Swelling customer numbers, new product launches like Revolut’s Metal card, and more expansion should underpin that goal, the company said. Yesterday the fintech star revealed it is mounting a global hiring spree as it seeks to recruit 3,500 staff across the world
However, Revolut today said it is also on the road to profitability despite its deepening losses, citing a big jump in its gross profit margin so far in 2019.
Revolut’s gross margin for the second half of 2019 will hit between 40 per cent and 50 per cent, compared to under 10 per cent in the corresponding period last year, the company forecast.
“The company’s gross profit margin has expanded significantly as the business has built scale,” Revolut said.
“2019 is set to be another year delivering record growth, but our work is not done and we are determined to reach all those who need us,” Storonsky added.
“This means maintaining our ambitious growth and expansion plans, which are now fuelled by substantial improvements to our profitability, and the key appointments we’ve been making.”