Licensed to Bank: Revolut is Ready for Europe

Following on from the recent licenses in Singapore and Japan, challenger Revolut has secured its European banking license, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

The “specialized” bank license was facilitated by the Bank of Lithuania. This type of license was introduced by the Bank of Lithuania in 2017. It has a minimum capital requirement of €1 million (a traditional bank is €5 million), and excludes some investment services and also complex financial services.

Revolut will begin implementing the license next year, and plans full current accounts, consumer lending and commission-free stock trading. Customers will also be able to deposit their salaries into their Revolut account, which will be protected for up to €100,000 by the European Deposit Insurance Scheme.

“With the banking license now secured, commission-free stock trading progressing well and five new international markets at final stages of launch, we are living up to our reputation as the ‘Amazon of banking’,” said Nik Storonsky, founder and CEO of Revolut.

The firm will initially focus on smaller European countries, before eventually passporting the licence to “key markets” including the U.K., France, Germany and Poland.

It says one of the “key focus areas” for the company is to break into lending. Revolut plans to offer standard overdraft facilities as well as personal and business loans at competitive rates.

Invest Lithuania explained: “The move of getting a license in mainland Europe has been considered by many a hedge against Brexit. Having received both the specialized bank license and electronic money institution facilitated by the Bank of Lithuania, Revolut is now effectively safe from any decision regarding Britain leaving the EU.”

At the end of 2016, FinTech Futures was invited to a fintech tour of Lithuania. During that trip, the Bank of Lithuania discussed its memorandum of understanding with Revolut. The firm said it intended to set up a financial institution in the country and obtain a banking license.

Over the last 12 months, Revolut says it has opened between 8,000 and 10,000 current accounts daily and transacted over $4 billion per month in volumes.

As reported last month, it was planning a $500 million Series D investment round, potentially enlisting tech giants like SoftBank to its roster of investors.

This is with a view to launch in the U.S. after the investment round. Revolut has seen major regulatory shortcoming preventing it from starting operations there.

And not forgetting April, when Revolut raised an additional $250 million in Series C funding. The plan was to expand, starting with the U.S. (as above), Canada, Singapore, Hong Kong and Australia in 2018.

The company has raised a total of $336 million from investors including DST Global, Index Ventures, Balderton Capital and Ribbit Capital.

Founded in 2013, Revolut demonstrated its platform at FinovateEurope 2015.

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Revolut Readies for $500 Million Series D

Revolut, the multi-functional cross-border card and app, is planning a $500 million Series D investment round, potentially enlisting tech giants like Softbank to its roster of investors, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).

According to City AM, the fintech has aggressive plans for expansions, with plans to launch in the U.S. after the investment round. Revolut has seen major regulatory shortcoming preventing it from starting operations there.

Australia and Japan are also on Revolut’s radar.

The round, set to take place early next year, would give the fintech the necessary boost to enter the U.S. market, a particularly difficult geography to crack.

This comes after the firm’s last funding, which had the shocking figure of $250 million.

The unicorn, which has already surpassed the $1.7 billion valuation, has grown fivefold in the past year, despite reporting annual losses.

It is not known whether Revolut’s previous backers, which include Index Ventures, Draper Esprit and DST Global, will sign on to its next round.

Earlier this year, Softbank said it planned to invest around $200 million into fintech, from its $100 billion Vision Fund.

Founded in 2013, London-based Revolut demonstrated its multi-currency card at FinovateEurope 2015. Nikolay Storonsky is founder and CEO.

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