Revolut Ltd. has raised $500 million in funding that gives the British financial-technology company a $5.5 billion market value, making it one of the most valuable startups in Europe.
The valuation puts Revolut ahead of close competitor electronic lender Monzo, which was worth around $2.6 billion in 2019, and that of small commercial bank OakNorth, which previously held the top position at $2.8 billion.
In a statement Tuesday, Revolut said it will use the money for a brand development and to boost its banking operations across the European region. Revolut disclosed that it intends to start making loans for retail and business banking clients and expand its savings program beyond the United Kingdom.
The valuation comes after London-headquartered Revolut said it had been granted the half-billion-dollar seed capital from a group of investors spearheaded by the American fund Technology Crossover Ventures, capping months of speculation around the agreement. TCV was an an early supporter of fintech startups like Netflix, Spotify, and Airbnb.
According to Revolut chief executive Nik Storonsky, their primary focus is to roll out finance operations in Europe, increase the number of customer who uses the startup as their daily account, and works towards generating more profits.
The market for fintech companies that offer an alternative source of traditional banking is highly-competitive, with Revolut colliding with market-tested companies like Starling Bank and Monzo.
German mobile lender N26 GmbH said earlier that it would shut down all mobile banking accounts in the UK this April. The company, funded by billionaires Li Ka Shing and Peter Thiel blamed the Brexit controversy for the withdrawal.
Revolut's cash injection means the startup is now valued more than triple its previous market capitalization of $1.9 billion in 2018, and marks a fast growth for the company unveiled in 2015 with a pre-paid card service that offers free foreign exchange to clients.
Swedish financial lending company Klarna became the most valuable fintech startup in Europe last August after new capital infusion pushed its post-finance valuation to $5.6 billion.
For Revolut, the startup has expanded into current accounts, stock trading and cryptocurrency and has more than 10 million clients globally. Across 23 offices around the world, Revolut employs around 2,000 personnel, 500 of whom are based in Canary Wharf. The company has around 1,000 workers at its Krakow base in Poland.
The company is targeting 100 million new accounts in the next five years -- an increase from more than 10 million at present -- and will focus on venturing outside of Europe, Storonsky said in an interview with Bloomberg TV, Tuesday.
