Fintech start-up Revolut raises $250m to become next UK unicorn

One of the UK’s growing challenger banks Revolut has raised $250 million (£179 million) in Series C funding and is now worth $1.7 billion (£1.2 billion).

This new valuation means the fintech start-up is officially a unicorn – a company that is worth over $1 billion.

It’s an impressive feat for the company, which was last valued at about £300 million in 2017. It began three years in the new wave of fintech (financial technology) companies hoping to challenge the status quo of UK banking.

What makes Revolut different is that its card users can spend abroad in over 150 currencies with no fees. Using the Revolut app, you can transfer money into different currencies, locking in a decent exchange rate.

In recent months, the start-up has added cryptocurrency capabilities, as well as safety features such as disposable virtual cards to prevent online fraud.

As a result, the start-up now has nearly 2 million customers and says it is signing up between 6,000 and 8,000 customers a day.

Nik Storonsky, founder and CEO of Revolut, says the company’s focus has always been to do everything opposite to traditional banks.

“We build world class tech that puts people back in control of their finances, we speak to our customers like humans and we’re never afraid to challenge old thinking in order to innovate,” he said.

“Banking has historically avoided disruptions by technology, but that is all about to change.”

It’s this attitude which has impressed investors across the world to invest $340 million into Revolut since it started. As well, unlike many start-ups, Revolut recently reported it was now breaking even, no mean feat for a tech company under the age of five.

The recent round of $250 million saw new and existing investors put money into the company, including Hong Kong-based DST Global and Index Ventures.

Revolut says it will use the money for global expansion, to the US, Canada, Singapore, Hong Kong and Australia.

Tom Stafford, managing partner at DST Global, said: “Revolut is developing and delivering technology that reduces the complexity and cost of financial services for consumers and small businesses.

"We are delighted to support Nik and the Revolut team as they continue to innovate, roll out new services and expand geographically.”

If anything, this sudden rise in Revolut's status demonstrates how keen investors are on fintech. Earlier this year, the Japanese mega-investor SoftBank said it wants to put at least $200 million into the growing sector, in order to take on the slow-moving banks.

For Revolut's competitors, including Starling and Monzo, this will not be good news that they have been overtaken so quickly.

Yet, the real panic will be coming from the big banks. Revolut doesn't even have a banking license yet, it's currently in the application process. Once that happens, the start-up could really take over the world.