Revolut

Idea

Introduction

Consumers and businesses worldwide are being underserved by expensive banks with dated technology. A survey of 9,000 bank customers in nine countries revealed that 77% of customers globally are unsatisfied with their bank.

We're creating a world where money moves freely at your pace, wherever you are. Revolut is a digital banking alternative designed for a global lifestyle. You can set up a current account in 60 seconds, hold and exchange 16 currencies at the interbank exchange rate, make free international money transfers to any bank in the world and spend fee-free globally with a contactless MasterCard. In just two years, Revolut has acquired more than 750,000 customers who have transacted over $4.2 billion.

The fast-moving Fintech has also launched a business platform that enables companies to hold, exchange and transfer 25 currencies at interbank rates and issue corporate cards for global fee-free spending. 12,000 global companies and scaling start-ups.

IMPORTANT INFORMATION

This crowdfunding raise is part of a much larger fundraising round involving institutional investors. The round price for this fundraising was set at US$11.2526. For the purposes of this crowdfunding raise, an exchange rate of US-GBP 0.7613 (being the end of day rate on 28 July 2017 provided by financial exchanges) has been applied to the round price, resulting in a share price of £8.57 per share.

Investors in this round will receive shares, which have a 1x non-participating preference on a return of assets, liquidation or sale, alongside earlier issued classes of preference shares. All preference shares also enjoy anti-dilution protection on a down round.

Intended impact

Revolut was launched in July 2015 by ex-finance professionals who have a distinctive ambition to build the future of money beyond banking. The idea came from a common frustration with exchange rate mark-ups, foreign transaction fees and a lack of technological innovation from the big banks.

Banks charge insane fees to spend or transfer your money in a foreign currency. A typical UK bank customer is charged up to £25 to transfer $500 to a bank in the United States with an exchange rate mark-up of 3-5%. For international card payments, banks charge as much as 6% on every transaction.

Today’s hyper-connected world deserves a financial partner just as progressive. One that adapts to your needs, gives you control and constantly pushes you into new exciting spaces. Revolut is a new Global Banking Alternative that enables free international money transfers, fee-free global spending - always at the interbank exchange rate.

Substantial accomplishments to date

In just two years, Revolut has grown to over 750,000 active users who have transacted over $4.2 billion to date. An average of 1,700 new customers sign up every day.

As a testament to the product, Revolut’s user acquisition is primarily driven by recommendations from friends and family. For an early growth comparison, TransferWise - a well-known Fintech unicorn launched in 2011 - only processed €10 million in client funds in their first year.

This crowdfunding is part of a $66m investment round from some of Europe's most well-known Venture Capital firms including Index Ventures, Balderton Capital and Ribbit Capital. The hot Fintech startup has also regularly attracted the attention of international media, with regular coverage in the Telegraph, Times, Financial Times and CityAM.

In July 2015, Revolut’s £1m crowdfunding campaign was oversubscribed by over 10,000 would-be-investors who pledged to invest £17m, all of whom were Revolut users.

Revolut was also notably:

- Nominated alongside Pokémon Go and WeChat for ‘The Best Overall Mobile App’ award at the largest Mobile Conference in the world.

- Selected from over 1,500 European FinTech’s to be named on the ‘Fintech50 2017’ list of the hottest European startups.

- Awarded the ‘Hottest FinTech Startup’ award at the Europas 2017.

Monetisation strategy

Revolut has 3 main revenue streams: (1) MasterCard© interchange (2) consumer add-ons and (3) business accounts.

Revolut gains a cut of the revenue from the fee (interchange) paid to MasterCard© by merchants in order to process their payments.

In April 2017, Revolut launched an annual, paid Premium service which costs £6.99 per month or £72 per year. Over 10,000 customers signed up within the first two months, with droves of new customers joining every week. Other revenue streams include Revolut credit which can be accessed from the app. Revolut also promotes new game-changing start-ups in the app and gains a fee for every Revolut customer who signs up.

Revolut for Business is a subscription-based web service that enables companies to manage international payments and corporate travel. Over 12,000 FTSE 100 companies and scaling start-ups are currently being on-boarded.

Use of proceeds

The funds raised will be used in two ways: (1) International expansion and (2) product development.

Starting in 2017, the fast-growing startup will be expanding internationally, with the aim of establishing itself as the number one platform for consumers and businesses for managing their finances. Revolut intends to initially expand its services across North America and Asia.

The equity raised will be used to hire a world-class team of International Expansion Managers, paying for the infrastructure and relevant licensing required to operate across new territories and to accelerate customer acquisition globally.

Revolut will also use the funds raised to accelerate product development for its consumer and business products. Currently some of Revolut’s services are made available in the Revolut app via partnerships with licensed third-parties. The funds raised will enable Revolut to apply for licences to provide these products in-house, which should in-turn increase profit.