Revolut has raised $80m in new funding from US private equity group TSG Consumer Partners, holding on to the $5.5bn valuation it secured earlier this year despite the fallout from the pandemic.
Revolut said the investment would be treated as an extension of the $500m “Series D” funding round it completed in February. Chief executive Nikolay Storonsky said the lossmaking company was not actively seeking more capital after the deal but said “TSG approached us with an exciting proposition to work together”.
The UK-based fintech said it would use the investment to expand its US business and recently-launched rewards programme.
The February deal made Revolut Europe’s joint most-valuable private fintech, along with Swedish store credit group Klarna. It has attracted more than 12m customers, expanding from a pre-paid debit card for international travel into areas such as stock investment and gold trading. It offers full bank accounts in Lithuania and said the latest funding would also help expand its banking offering into more of central and eastern Europe.
“Given the current climate, we’re delighted to be in such a strong position to bring better banking services to people around the world,” Mr Storonsky said.
The company has maintained its valuation despite suffering a sharp decline in revenues since the start of the pandemic.
The number of transactions using Revolut cards fell by 45 per cent as international travel seized up, which Mr Storonsky previously said would lead to a “double digit” revenue fall. However, the decline has been partially offset by an increase in income from services such as cryptocurrency trading and the company has said it still expects to be profitable by the end of the year.
Revolut’s surfeit of investor cash contrasts with many of its peers in the fintech industry, which has struggled since the start of the pandemic. Last month rival Monzo was forced to raise cash at a 40 per cent discount to its previous valuation, while Monese has scaled back ambitious plans to raise up to £100m from new investors.
Revolut has been plagued by accusations that its rapid growth led to poor customer service and alleged regulatory failings, but the company has denied the criticisms and hired several industry veterans to help strengthen its reputation, including chairman Martin Gilbert.