Revolut to spend US$13 billion on its push for 100 million users

[LONDON] Revolut plans to enter 30 new geographies by the end of the decade, a strategy that will ultimately see the fintech invest US$13 billion as it tries to amass 100 million users.

As part of the push, Revolut will invest US$4 billion into its business across the UK, helping it create 1,000 jobs in the fintech’s home market. The announcement came as Revolut opened its new global headquarters in London’s Canary Wharf neighbourhood on Tuesday (Sep 23).

“From our roots here in the UK, we’ve grown to serve over 65 million customers globally,” chief executive officer Nik Storonsky said in a statement. “This HQ will be central to driving our growth towards our next milestone of 100 million customers.”

The US$13 billion investment also includes a US$500 million previously-announced outlay in the US and a US$1.2 billion commitment to its Western Europe hub in France. While Revolut declined to specify where the remaining US$7.3 billion would be invested, a spokesperson said the money would go towards expanding the firm’s global network of banks, recruitment and other operational upgrades.

For its new office, Revolut is taking four floors in the 14-storey YY London building. Canary Wharf has been central to the fintech’s development from the beginning, when Storonsky and his co-founder started out with just two desks at Level39, a co-working space for tech companies located in the neighbourhood.

It has since grown to become one of Europe’s most valuable startups. The company is on track to deliver more than £4.1 billion (S$7.1 billion) in annual revenue this year, a fact it has been touting as it courts investors for a fundraising that is set to value the fintech at US$75 billion, Bloomberg previously reported.

“It is a vote of confidence in the region, and proof that European companies exceeding US$50 billion valuations and thousands of employees are quickly becoming the norm,” said Martin Mignot, partner at Index Ventures, one of Revolut’s largest investors.

Global expansion

Revolut has already been rapidly expanding into new markets in recent years and now has operations in Australia, Brazil, Mexico, Japan, New Zealand, Singapore, the US and India. The company aims to become one of the top three financial apps in every market it enters.

“It’s not going to happen overnight – this is a multi year journey,” Sid Jajodia, Revolut’s chief of banking, said in an interview. “All of this requires investment. It requires capitalisation. So once you get a licence, you’ve got to embed a lot of capital – in some cases, hundreds of millions of US dollars of capital – into an entity. You have to build the team.”

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Jajodia said the company is considering applying for licences in Peru and it is working with regulators in the Philippines to secure one there.

The company on Tuesday announced it will make its first push into Africa, starting with South Africa. It recently secured initial approval for licences from the United Arab Emirates and is considering applying for a licence in Saudi Arabia as its next move, Bloomberg previously reported.

In Latin America, Revolut has entered Colombia and Argentina and it will launch as a bank in Mexico early next year. The firm aims to go head to head with Brazil’s Nu Holdings in the region.

In Europe, the company will launch branches in Portugal and Belgium and plans to submit a French banking licence application. In Asia, the fintech is in the process of obtaining further licences in Australia and New Zealand.

US, UK licences

In its home market, Revolut is still in the process of securing a full banking licence.

The company remains in the so-called “mobilisation phase” for its UK banking permit, meaning its domestic business faces strict guardrails from regulators.

A full UK licence will enable Revolut to provide overdrafts, loans and savings products to its more than 12 million UK customers, allowing it to better challenge traditional banking giants such as Barclays and HSBC Holdings.

The UK’s Chancellor of the Exchequer Rachel Reeves said in a statement that she is focused on making Britain “the best place for financial services companies to do business, pushing us ahead in the global race for investment.”

In the US, Revolut has been weighing the possibility of buying a lender to catapult its growth in the country, Bloomberg previously reported. The company may also choose to apply for a banking licence of its own. BLOOMBERG