UK fintech Revolut reported a 57 percent jump in its 2020 revenue, but the company’s losses for the year deepened despite the year-end cryptocurrency boom. The operating loss for the startup came in at £200.6 million.
The financials released by the UK digital bank shows that it ended 2020 with total revenue of £261 million, up from the previous year’s £166 million. The startup also made £39 million in fair value gains from crypto assets, meaning it holds some cryptocurrencies in its balance sheets.
Though the company generated £123 million as gross profits, it reported operating losses at the end of the year. The company spent £266 million alone as its administrative costs. However, losses narrowed significantly in the final quarter. With a staff of 2,200 people, the company reported £55 million in operating losses in Q1, which came down to only £5 million in the final quarter.
The gross margin of the startup also improved to 61 percent in Q4 from only 29 percent in Q1.
“As the extraordinary circumstances of 2020 drove the trend towards digital financial management we continued to innovate for customers to make their financial lives easier and accelerate daily use,” said Nikolay Storonsky, founder and CEO of Revolut.
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The UK startup expanded aggressively in 2020. It entered the United States, Japan, and Australia, and also launched banking services in Lithuania. But the United Kingdom still remained its dominant market generating 88.4 percent of its revenue, while 10.2 percent came from the European Economic Area.
Storonsky further said that COVID-19 implications have forced the startup to focus on profitable areas like cryptocurrency and stock trading. But Revolut’s cards and interchange business generated the highest revenue of £95 million, followed by £80 million from forex.
The startup also revealed that it had 14.5 million personal customers and 500,000 business customers by the end of 2020. Further, Revolut reported that its revenue and gross profit for Q1 2021 increased by 130 percent and 300 percent, respectively, year-over-year.
“Revolut entered its next phase of growth in 2020 as we broadened our global footprint, strengthened our capital base, enhanced governance, and bolstered executive management,” said Revolut Chairman, Martin Gilbert.