UK fintech firm Revolut profits surge to $1.5b

Revolut, a United Kingdom -based fintech company, reported a net profit of £1.1 billion (US$1.5 billion) for the year ending December 31, 2024.

This marks a 149% increase compared to the previous year.

The company’s revenues increased by 72% year on year, reaching £3.1 billion (US$4 billion).

This announcement coincides with Revolut’s efforts to become a fully operational bank in the UK.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Banking licenses unlock crucial revenue streams for fintech unicorns

Revolut’s profit surge demonstrates how critical banking licenses are for fintechs looking to achieve sustainable profitability.

The company acknowledged that growing without a banking license was a “wrong decision,” limiting their ability to offer credit products and compete effectively in certain markets 1.

This explains why the three-year wait for UK approval (2021-2024) was so significant. It enables Revolut to hold customer deposits directly and offer loans, mortgages, and other financial products that generate substantial revenue 2.

Competitors Monzo and Starling obtained their full banking licenses years earlier (2017 and 2016 respectively), giving them a significant head start in building banking revenue streams in the UK market.

The regulatory approval process is a crucial bottleneck for fintech growth, with different jurisdictions offering varying levels of regulatory friction. Lithuania, for example, provided Revolut an easier path to EU banking authorization compared to the UK’s lengthy process 3.

2️⃣ Dramatic evolution from money-losing startup to profitable fintech giant

Revolut’s journey to profitability showcases the fintech sector’s maturation from growth-at-all-costs to sustainable business models.

In 2017, the company reported a £15.1 million ($19 million) loss, with CEO Storonsky explicitly stating that profitability wasn’t a priority as they focused instead on user acquisition and expansion 4.

By 2023, Revolut had achieved a dramatic turnaround with a pre-tax profit of £438 million, already showing the company’s shift toward financial sustainability 2.