Menu

digital banking

  • Home>
  • digital banking
Revolut Eyes $65 B Funding Round to Fuel U.S. Expansion
Business, business update, Economy - July 19, 2025

Revolut Eyes $65 B Funding Round to Fuel U.S. Expansion

Revolut Eyes $65 B Funding Round to Fuel U.S. Expansion

London-based fintech titan Revolut is in active discussions to raise around $1 billion in fresh capital under a $65 billion valuation, aiming to supercharge its ambitious expansion in the United States and beyond.

Turning Heads with a New Valuation

Revolut’s management is engaged in talks to mix new share issuance and existing stock sales to bring in about $1 billion. Industry observers expect the round will anchor around a “blended” $65 billion valuation—higher for new issuances, slightly lower for secondary-market transactions FinTech Weekly – Home Page+10AOL.com+10Devdiscourse+10.
This comes after Revolut’s valuation stood at $45 billion in 2024, following a secondary share sale that attracted fresh and existing investors FinTech Weekly – Home Page+7AOL.com+7MarketScreener Canada+7. The significant valuation bump signals strong investor appetite for fintech disruptors.

Big-Name Investors in the Mix
U.S. investment firm Greenoaks is reportedly leading the charge on this funding round, with Mubadala—Abu Dhabi’s sovereign wealth vehicle—also exploring a $100 million addition to its stake Benchmark Beat+6AInvest+6AInvest+6. Both parties have previously shown confidence in Revolut.
Sources indicate Greenoaks is poised to helm the round, though terms are still being negotiated Wikipedia+12AOL.com+12Finance Magnates+12.

Explaining the “Blended” Valuation
The $65 billion figure is not meant to be a straightforward valuation—it’s a blend:
• New shares are priced more optimistically.
• Secondary sales among current shareholders are pegged lower.
This results in a blended headline number FinTech Weekly – Home Page+4Axios+4Financial Times+4Tech Startups+4AInvest+4AOL.com+4MarketScreener Canada.
Such valuation mark-ups are common in fintech funding—consider Stripe, which hit a high-water mark before retreating during its public debut .

Financial Strength & Growth Momentum
Revolut has demonstrated impressive financial firepower:
• In 2023, it reported £1.1 billion in pretax profit, overturning a previous loss Wikipedia+12AInvest+12Benchmark Beat+12MarketScreener Canada+1AOL.com+1.
• That momentum continued into 2024 with net profit doubling to £790 million and revenue roughly £3.1 billion Wikipedia.
• User numbers are climbing fast—it now serves over 60 million customers globally, up from around 50 million in late 2024 AInvest+2Wikipedia+2Finance Magnates+2.
These figures explain why fresh capital is incoming at a heftier valuation.

Expansion Strategy: U.S. Focus, Global Outlook
The fresh funding will help accelerate Revolut’s penetration in the U.S.—a core focus area—as evidenced by partnerships with Sutton Bank and Cross River Bank to support its American banking ambitions Benchmark BeatTechCrunch+10Tech Funding News+10Axios+10.
Additionally, Revolut is diversifying its offer with:
• Expansion into digital mortgages and business lending
• Launching an AI-driven financial assistant, branded ATMs in Spain, and global investment features like ETFs with BlackRock/Vanguard MarketScreener Canada+2AInvest+2Tech Funding News+2.
The offer is steadily evolving into a full-fledged “financial super app.”

CEO Incentives & Exit Strategy Options
Revolut CEO Nik Storonsky stands to benefit substantially from a successful round or future IPO—reportedly topping out at 10 % equity if the company reaches a $150 billion valuation Financial Times+3AInvest+3Benchmark Beat+3.
The firm is also reportedly laying groundwork for an IPO, with a preference for New York based on its global reach AInvest+5AInvest+5Tech Funding News+5. Although a listing isn’t imminent, market dynamics could influence timing.

Market Context & Valuation Trends
This round highlights wider trends in fintech investing. Revolut’s leap from a $45 billion to $65 billion evaluation in under a year reflects growing confidence, especially given its strong profit performance. However, caution is warranted: other fintechs like Stripe have seen valuations contract post-funding Finance Magnates.
Still, with $4 billion in annual revenue and half a billion in profit, Revolut distinguishes itself among peers—attractive to investors on both primary and secondary fronts Tech Funding News.

Regulatory & Competitive Landscape
Revolut faces regulatory scrutiny—which it has addressed with UK and EU banking licenses granted in 2024—and is improving its compliance systems Tech Funding News. Its capability to expand U.S. services hinges on navigating licensing and maintaining robust regulatory relations.
Furthermore, the fintech space is highly competitive: legacy banks and rivals like Wise and Monzo are vying for market share. Revolut’s growth, scale, and product breadth represent its main defense.

What Comes Next?
Expect the following developments:
1. Deal Finalization: Greenoaks and Mubadala are key players; terms and timing remain fluid.
2. U.S. Rollout: Accelerated launch of U.S. banking and lending services.
3. Product Rollout: New mortgages, business credit products, AI financial tools, banking app enhancements.
4. IPO Planning: Potential NYSE listing, timed with market conditions and internal milestones.
5. Valuation Watch: Investors and analysts will track how performance and market sentiment affect valuation.

Final Take: Bold Move with Smart Groundwork
Revolut’s move to raise funding at a lofty valuation underscores its strong financial footing and ambitious global expansion plans. While some may question fintech exuberance, the company’s profitability and growth-backed metrics set it apart. If regulatory and market conditions remain favorable, this funding round could be a powerful springboard for its next phase.

 

 

 

 

:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

IREDA Bonds Gain Tax Benefits to Promote Green Energy

, , , , , , , 0 Comment
Read More
Microfinance sector recorded surge in NPAs to Rs. 50000 crore
Business, Equities, Market News, Markets - August 29, 2024

Navigating Challenges Small Finance Banks Brace for 26% Slower Credit Growth

Navigating Challenges Small Finance Banks Brace for 26% Slower Credit Growth

By offering fundamental banking services to people with restricted access to traditional banking institutions, Small Finance Banks were founded to promote financial inclusion. SFBs were established with the primary goal of providing services to underbanked and unbanked segments of the population as well as micro, small, and medium-sized companies (MSMEs). Usually designed to satisfy the specific requirements of their customer base, their product offerings include of savings accounts, microloans, and small loans.

Small Finance Banks (SFBs) in India have experienced significant growth in recent years, emerging as key players in the financial sector by catering to the underserved segments of the population. However, the robust expansion that has characterized the sector is expected to decelerate this fiscal year, with credit growth projected to slow down to approximately 26%. This expected slowdown is indicative of both the evolving dynamics within the financial sector and the broader economic landscape of India.

Several factors are contributing to the anticipated slowdown in credit growth for SFBs this fiscal year. These factors include regulatory changes, increased competition, and macroeconomic uncertainties that are affecting the financial services industry as a whole.

The Reserve Bank of India (RBI) has implemented stringent regulatory norms for SFBs, aimed at ensuring financial stability and protecting depositors’ interests. These regulations require SFBs to maintain higher capital adequacy ratios and adhere to stricter lending guidelines, which can limit their ability to extend credit. The increased compliance costs associated with these regulations also affect the profitability of SFBs, leading to a more cautious approach in credit disbursement.

As the Indian economy continues to grow, traditional banks and NBFCs are increasingly entering the market segments that SFBs have historically dominated. These larger financial institutions often have better resources and more extensive networks, allowing them to offer competitive rates and services that can attract customers away from SFBs. This heightened competition forces SFBs to rethink their strategies and could lead to a more conservative lending approach.

Additionally, inflationary pressures can affect the repayment capacity of borrowers, especially those in the lower-income segments, leading to a potential rise in non-performing assets (NPAs) for SFBs. To mitigate this risk, SFBs may adopt a more prudent lending approach, contributing to the slowdown in credit growth.

Over the past few years, some SFBs have experienced an increase in NPAs due to the challenging economic conditions brought about by the COVID-19 pandemic and other factors. In response, many SFBs are focusing on strengthening their balance sheets by improving asset quality and reducing NPAs. This shift in focus may result in a more conservative lending strategy, with banks prioritizing risk management over rapid expansion.

Despite the expected slowdown in credit growth, the outlook for SFBs remains positive in the long term. The slowdown provides an opportunity for these banks to consolidate their operations, improve risk management practices, and focus on sustainable growth. Several strategies could help SFBs navigate the current challenges and continue to play a vital role in promoting financial inclusion.

One of the key strategies for SFBs to maintain growth is by leveraging technology and digital platforms to enhance their service offerings. By adopting digital banking solutions, SFBs can reduce operational costs, improve customer experience, and reach a broader audience. The use of data analytics and artificial intelligence can also help in assessing credit risk more accurately, enabling SFBs to make more informed lending decisions.

Collaborating with fintech companies, NBFCs, and other financial institutions can provide SFBs with access to new technologies, markets, and customer segments. Strategic partnerships can also help SFBs enhance their product offerings and improve operational efficiencies, contributing to sustainable growth.

In Conclusion, While the projected slowdown in credit growth may seem concerning, it also presents an opportunity for Small Finance Banks to reassess their strategies and focus on sustainable growth. By leveraging technology, diversifying products, strengthening risk management practices, and building strategic partnerships, SFBs can continue to thrive and play a crucial role in promoting financial inclusion in India. The evolving landscape will require SFBs to adapt and innovate, ensuring that they remain competitive and resilient in the face of new challenges.

The image added is for representation purposes only

Sugar Industry Fears New Norms May Stifle Growth and Innovation

, , , 0 Comment
Read More