Revolut is targeting an ambitious $200 billion valuation when it eventually goes public, a figure that would unlock a substantial reward package for CEO Nik Storonsky, valuing his stake at $78 billion. This valuation goal comes as the fintech is expected to conduct secondary share sales later this year, potentially valuing the company between $100 billion and $120 billion. The company's current valuation of 13 times its revenues is significantly higher than other fintechs, which typically stand around four times, and its 70 million customers across 40 countries rival the scale of major traditional banks like JPMorgan Chase.
Revolut's strategic shift involves moving beyond its established fee-based model, which generated 76% of its revenue last year from services like cryptocurrency and foreign exchange trading, to become a full-service bank. While its pretax profits surged by 57% to $1.7 billion from $4.5 billion in revenues last year, its lending operations remain modest. Its total credit portfolio was $2.2 billion last year, a 120% increase but from a low base, significantly less than specialist lenders such as OneSavings Bank with $25.9 billion in net loans. Analysts like John Cronin view Revolut's banking capabilities as still developing, stating it is "not anywhere yet from a banking perspective."
The company is actively acquiring banking licenses in various regions, including a recent full UK banking license, to expand its offerings into consumer credit products, overdrafts, and credit cards. It is also seeking a similar license in the US, primarily to bolster its digital assets and payments services rather than prioritizing lending. Despite its success in customer acquisition, with its brand having become a "verb" in some markets, analysts like JPMorgan note that building the necessary underwriting expertise, credit infrastructure, and regulatory capital for scaling lending will likely be a multi-year effort. This transition to a more traditional banking model, where customer deposits are recycled into loans, is crucial for sustaining its ambitious growth and valuation targets.
