Leading UK challenger bank Revolut has raised $500m (£387m) from US investors, bringing its valuation to £4.3bn.
The London-headquartered firm, which has now raised a total of $836 million (approx £650m), was founded in 2015 and began life as a pre-paid travel card. The new funding makes it the UK’s most valuable FinTech firm.
The firm offers features which have become standard among digital-only banking rivals Starling and Monzo, including current and business accounts, stock trading and cryptocurrency services.
This latest Series D round was led by Silicon Valley-based Technology Crossover Ventures with participation from existing investors.
Revolut said it will invest the new cash in further development of its premium account services, the launch of customer lending services and extending savings accounts beyond the UK and into Europe.
John Glen, the economic secretary to the Treasury and City, called the investment a “clear indicator of our strength as a place for FinTech business as we leave the EU”.
Challenges in profitability
Despite Revolut’s plans to expand into Japan, Russia, the US, South America and Asia in the next year and to grow its already thousands-strong headcount over its 23 offices, it is yet to turn consistent profit.
In 2017 the firm reported a £15m loss which grew to £33m in 2018.
Speaking about the investment, founder Nikolas Storonsky said it now plans to build a “global financial platform – a single app where our customers can manage all of their daily finances”.
“Going forward, our focus is on rolling-out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability,” he added.
Currensea co-founder James Lynn said the profitability of digital-only banks would present a challenge for as long as customers maintained a second traditional account to hold their income and savings.