UK fintech startup Revolut is expected to significantly grow its user base over the next coming months due to various factors. Data compiled by Finbold.com indicates that by 2021, Revolut customers are projected to increase by 36 percent reaching more than 16 million.
By February 2020, Revolut, one of the leading challenger banks in Europe, had 10.84 million users. By projection, the end of March will see the bank garner an additional 0.53 million users. By June, the users are set to hit 13.07 million and then grow by about 20% to hit 16.45 million by December 2020.
Notably, Revolut has been steadily growing its user base since February 2018, when the London based firm had 1.5 million customers. By December the same year, the figure had grown to 3.32 million, representing an increase of about 54.8%.
The incredible growth was also replicated in 2019 when the bank hit 6.88 million users by July. By December of the same year, Revolut users stood at 9.69 million. This was a significant growth of 64.8% within a year.
COVID-19 might fuel Revolut’s growth
The projected Revolut user growth in the coming month is fuelled by certain factors such as the expansion to different countries. Additionally, the current COVID-19 pandemic might fuel the company’s growth.
In a bid to fight the spread of the virus, many countries across the globe are encouraging citizens not to use cash or go to the physical bank offices. Therefore, the challenger banks, such as Revolut, present a perfect opportunity to manage cash virtually both for regular users and businesses with a global presence.
By February 2020, the European neo banking sector was mainly controlled by UK based platforms. Cumulatively, the UK challenger banks had a user base of close to 20 million. Based on the short period these banks have been in operation, the growth rate is incredible
Last month, Revolut was leading in the number of users compared to other European based neobanks. With about 10.84 million users Revolut’s closest challenger is Germany based N26 with 5 million users. Currently, the two platforms have a combined user base of about 15 million.
Monzo, another UK based challenger bank had 3.6 million users. On the other hand, Monese, which offers current accounts and money transfer services controls about 2 million customers. On the other hand, the fast-growing Starling bank had registered about one million users by the end of February. Tandem and Atom banks controlled 0.8 million and 0.07 million users respectively.
Furthermore, by February 2020, Revolut was the highest valued digital-only bank in Europe after becoming a unicorn in 2018. Unicorn companies are those which have had venture capital investment and have exceeded company valuation of over one billion U.S dollars. Interestingly, the bank became a unicorn just three years after it was founded following a series of funding.
Revolut’s current market value now stands at $5.5 billion while Munich’s N26 is the second-highest valued challenger bank with a valuation of $3.5 billion. Elsewhere, Monzo’s valuation by February 2020 was $2.6 billion while Atom Bank value was $2.6 billion during the period under review.
Revolut’s high valuation is courtesy of support due to several series of funding. By February 2020, the UK based challenger bank had the highest funding value compared to competitors. In total, Revolut had $837 million as funding value with the recent funding coming in February 2020. On the 17th of February 2020, Revolut closed its latest funding round of Series D funding where $500 million was raised.
N26’s total funding value by last month was $682.8 million. Most of the bank’s funding came in 2019. Monzo’s funding value was $418.6 million followed by Atom Bank’s $416.67 million. Other challenger banks Tandem, Monese and Bunq had a funding value of $95.85 million, $80.4 million and $49.39 million respectively.
When it comes to challenger banks, Europe is taking center stage with most people embracing the technology to manage their money.
Typically, challenger banks are smaller, recently launched aiming to challenge the traditional banking system. These facilities tend to offer better savings rates available through their online accounts. Additionally, most offer services through mobile apps and credit/debit cards.