What’s going on?
Revolut became the UK’s most valuable startup last Thursday, so now the Brits can start treating the FinTech giant like the rest of their respected figureheads.
What does this mean?
With more than 15 million customers, Revolut is one of Europe’s brightest young things. And it just got even brighter: the fintech giant announced on Thursday that it had raised $800 million from investors – Japan’s SoftBank among them – at a $33 billion valuation. That’s six times last year’s valuation, and it helped the company surge past Checkout.com – valued at $15 billion – as the UK’s number one startup.
Revolut will use the money to fund new products, as well as expand into untapped markets like the US and India. The firm’s new investors, meanwhile, will just be hoping that its growth ambitions aren’t as costly as they were last year, when rapid global growth caused staff costs to surge and losses to double.
Why should I care?
For markets: This is a pattern.
At the risk of upsetting Revolut’s fragile ego, the company isn’t exactly special: valuations of European fintech firms have skyrocketed this year. Swedish buy-now-pay-later startup Klarna saw its valuation quadruple in less than a year to $46 billion last month, while N26 is currently in fundraising talks that could value the German digital bank at around $10 billion – almost three times its valuation a year ago.
The bigger picture: Disruptors get disrupted.
Digital banks like N26 are used to disrupting traditional banks, but they’re about to get a taste of their own medicine. The European Central Bank gave the green light for a multi-year project to create a digital version of the euro this week. And if savers take a fancy to holding digital money with the central bank, that could cause customer deposits – an essential source of cheap funding for banks – to start drying up.