Losses have more than trebled at digital bank Revolut despite a huge increase in revenue.
The London FinTech reported a loss of £106.5 million in 2019, compared to £32.8m in 2018.
Revenue almost trebled, reaching £162.7m from £58.2m in 2018.
It blamed the mounting losses on geographical and product expansion, with Australia its latest full international launch just this week.
A $500m funding round from US investors in February, before coronavirus reached the UK, saw Revolut’s valuation hit £4.3bn and become the UK’s most valuable FinTech.
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.
The results reflect those of Monzo, which last week saw losses more than double to £113.8m, up from £47.2m in 2019. Revenues at Monzo also rose, but stand some £100m below those of Revolut.
Monzo announced cost-saving measures and expressed “significant doubt” about its ability to continue.
However Revolut’s board said its own company, which employs 2,200 staff, has a “comfortable level of headroom above its regulatory capital and liquidity requirements”.
Rival Starling Bank, which reported a loss of £52m compared to £25m in 2018, has revenue of around £80m and is confident of becoming the first neobank to break even next year having largely dodged the negative effects of coronavirus, unlike its rivals.
It was the only one of the three to not furlough any staff. Revolut cut 60 of its staff and offered a scheme whereby employees could trade in part of their monthly pay for equity in the company.
Revolut now has 13m customers around the world, compared with Monzo’s 4m and the 1.5m of Starling. The latter’s customer base has the oldest average age.
Before coronavirus, it had planned to expand into Japan, Russia, the US, South America and Asia this year and to grow its headcount.
Currensea co-founder James Lynn told BusinessCloud before COVID-19 hit the UK that 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.
neobanks