The digital banking startup Revolut has defied the odds in a turbulent year for financial technology companies. The London-based firm is on track to generate over $2 billion in revenue for 2023, according to leaked financial documents seen by Bloomberg.

This represents astonishing growth for the company. Revolut's monthly revenue hit around $150 million in the first half of 2023, putting it far ahead of the previous year's total revenue of $1 billion.

Revolut Sees Strong Growth despite Challenging Year for Fintechs

This growth is driven by a surge in new customers, with Revolut now adding up to 300,000 users per week, expanding its global customer base to close to 40 million. This remarkable achievement is occurring despite the mounting competition from both incumbent banks and other fintech challengers.

The results provide some relief to Revolut's investors following a tumultuous period. While the company continues its efforts to secure a UK banking license and has faced criticism over delayed financial filings, it's worth noting that new products such as stock trading and interest income are driving profits, with the latter now exceeding triple the revenue from foreign exchange .

Although the official results were supposed to appear a month ago, Revolut is once again delaying their publication. For the fintech, however, this has already become something of a tradition. The results for 2021, which showed a net profit of $71 million for the first time, were only published in March 2023.

To Become a "Supper App"

Revolut aims to become Europe's first financial "super app", offering banking, trading, shopping, and more from one platform. This ambition has led to rapid expansion and executive shuffling. While this causes short-term growing pains, the strategy seems to be paying off in spades based on the latest financials.

In November, the company appointed Francesca Carlesi, a seasoned banking veteran, as the new CEO of the UK. This key hire could help Revolut finally land its elusive UK banking charter in 2023. If so, it would allow the firm to accelerate growth by launching credit cards, loans, and other products for its British users.

While traditional banks stumble, Revolut's huge revenue growth shows the resilience and potential of digital-first financial services. The future looks bright if the company can smooth out its regulatory issues and executive team. Revolut may achieve its goal in becoming Europe's premier financial hub.

Fintechs in Distress

Revolut's release of its 2023 results is a key indicator for the industry, particularly against the backdrop of declining valuations in European technology and financial technology sectors over the last year, influenced by broader macroeconomic factors.

Data from early 2023 indicated a decrease of 30% in global fintech funding, dropping to $95 billion. Further analysis revealed that fintech in the EMEA region experienced a significant downturn in the first half of 2023, with investments plummeting 50%. The KPMG-prepared Pulse of Fintech report detailed these figures, noting a total investment of $52.4 billion across 2,153 deals.

In contrast, UK payment fintech companies are experiencing a somewhat more positive trajectory. However, the European fintech sector is grappling with substantial funding challenges due to adverse macroeconomic factors. High inflation, escalating interest rates, recession concerns, and persistent market uncertainty have led investors to exercise greater caution, particularly in sectors characterized by high risk and growth potential, such as fintech.