Financial technology firm Revolut has become the first of a new breed of digital banks in Britain to break even on a monthly basis after a swelling user base and a suite of new products helped it bolster revenues in December.
Revolut, which has gained popularity with users for cheap and easy foreign exchange and is in the process of securing a banking license, now has 1.5 million users across Europe.
The firm is one of a number of digital banks that have sprung up in Britain in the past few years, offering slick apps, cut-price fees and a “marketplace” where users can shop around for products from a variety of providers.
Some have seen significant user growth since, but all are loss-making.
Revolut founder Nikolay Storonsky told Reuters that December’s result was driven by strong user growth and uptake of its products — trends that had continued into 2018.
“In January we had an even stronger month…and again we are up 20-25 percent on revenues compared to December,” he said.
The firm’s closest peers including Monzo, Starling Bank and Tandem, which all have British banking licenses, told Reuters they had not yet seen a month without losses.
Another app-only bank, Atom, which has a different business model, also said it had not broken even yet. Germany’s digital bank N26, which has expanded across Europe, declined to disclose details on its financials.
Unlike its rivals, Revolut offers paid-for premium and business accounts, that have proven lucrative for the start-up.
It is also the only British digital bank to operate across Europe so far. Strong growth in countries like France, Germany and Switzerland and the Nordic region helped drive its user base up by 50 percent in the last two months. Expansion plans are also underway in India, Brazil, South Africa and the UAE.
Revolut is in the process of securing a banking license in Lithuania, which it then plans to passport elsewhere in Europe.
It already offers device and travel insurance through its marketplace, two of the new products that helped grow users and the firm’s monthly transaction volume to $1.5 billion (£1.07 billion) – a 700 percent increase in the past 12 months.
Another was the ability to buy, hold and sell cryptocurrencies within the Revolut app.
Storonsky said there had been strong demand for this from customers since the capability launched, although this fell back a bit when the value of Bitcoin and other digital currencies dropped.