Revolut surpasses European banks in value after new share sale

Fintech-app Revolut reaches a market valuation of $45 billion
FintechMoney transfer app Revolut now has a market valuation of $45 billion after a recent secondary share sale, putting the company ahead of some of Europe’s largest banks, including Societe Generale and Barclays, raising questions about the future of traditional financial institutions.

A fintech-company on the rise

Launched in 2015, Revolut has grown rapidly to become one of the largest players in the global fintech sector. The company offers a range of financial services directly through its app, without relying on physical branches. Its latest valuation of $45 billion places Revolut above major European banks such as France's Societe Generale and Britain's Barclays, which have market values of $19 billion and $43 billion respectively (Societe Generale, Barclays).

The latest share sale was carried out with the help of Coatue and D1 Capital Partners together with Tiger Global, one of the company's existing investorsThis sale allowed current employees to liquidate portions of their shares, further underscoring Revolut's success in the market.

Record profits and global growth

Revolut has not only increased in value, but has also shown impressive profitability. The company reported a record pre-tax profit of $564.36 million, a strong signal to investors that that the fintech company has a solid foundation for continued growth. With 45 million users globally, of which around 400,000 are in Croatia, Revolut continues to expand its customer base (Revolut official website).

“With recent successes and a growing global user base, we see the fintech sector on the verge of reshaping the traditional financial world,” comments one analyst. Traditional banks have struggled with weak profitability and increased regulation, leaving them vulnerable to competition from new technology-based players such as Revolut (Fine extra).

Licenses and future ambitions

In addition to its impressive financial results, Revolut recently secured a banking license in the UK, completing a three-year review and evaluation process. This means the company can now offer even more services to its UK customers, strengthening its position in the domestic market (Financial Conduct Authority).

Despite this progress, it is still unclear when Revolut plans to take the step towards an IPO. The company has previously signaled its intentions to go public, but no concrete timeframe has yet been announced (TechCrunch).

Challenges for traditional banks

The rapid growth of the fintech sector, particularly companies like Revolut, has created new challenges for traditional banks in Europe. While companies like Barclays and Societe Generale continue to struggle with profitability and adapting to new regulatory requirements, Revolut has leveraged its flexibility and technological advantages to attract a new generation of banking customers.

Traditional banks have also seen their share prices stagnate in recent years. Barclays' share price is now worth about the same as it was ten years ago, which stands in stark contrast to Revolut's dramatic rise in value. Investors see a brighter future for the fintech company, and many believe it has better growth prospects than its older competitors (Bloomberg).