Revolut's rocky road to a record raise

It’s been a tough 24 months for Revolut since its last funding round in 2018, here’s what happened.

News that Revolut has landed a whopping $500m in additional funding will hardly surprise those who’ve followed the twists and turns of the digital banking group’s latest raise.

The earliest rumblings of Revolut’s record raise today started nearly immediately after the startup’s last $250m round in April 2018.

2018 – Banking on SoftBank

In November 2018 The Times first reported, and City AM later confirmed, that fresh funding was already in the works, with SoftBank’s Vision Fund lining up $500m for the bank.

Throughout 2018 SoftBank was riding high while deploying billions from its $100bn war chest, and for a while, it seemed CEO Masayoshi Son could do no wrong.

Revolut CEO Nikolay Storonsky even appeared to confirm the reports in December 2018, telling CNBC that a SoftBank tie-up “may happen in the future”, adding weight to the belief that a deal was due to be announced in early 2019.

Any hopes that the Vision Fund would power Revolut’s future growth were dashed in early 2019 however after the cornerstone of Son’s portfolio, WeWork, began stumbling from crisis to crisis.

Eventually SoftBank would be forced to step in to save WeWork from near-collapse in October 2019.

2019 – From $10bn to $5bn

Undeterred, Revolut’s fundraising efforts continued at pace and by mid-2019 a valuation figure of $10bn had been attached to the startup—initially by the then CEO of Revolut’s backer Draper Esprit, who said: “we are building real, $10bn companies in Europe for the first time.”

The $10bn figure would stick, and by October 2019 Sky News reported that JP Morgan had been drafted in to manage the $500m raise and a $1bn convertible loan. Now a valuation of “between $5bn (£3.9bn) and $10bn (£7.9bn)” had been attached to the deal.

By December Sky had identified TCV as the likely backer, albeit with a narrower valuation of between $7bn and $8bn, and with the $1bn convertible loan having been jettisoned from the core deal.

Closing in on the final deal, Financial News locked the $5bn valuation figure after seeing documents from the round, a figure that would eventually prove accurate.

2020 – Future funding?

The question now is whether Revolut’s Series D is over, or whether there’s more funding still to come.

Clearly absent from Revolut’s announcement today is any sign of the $1bn convertible loan.

Earlier reports suggested that this loan would convert into equity upon Revolut securing a US banking licence which, given Revolut has already launched in the US with New York’s Metropolitan Commercial Bank providing its licenced services, may no longer be on the table.

But with Revolut now employing over 2,000 staff globally and with its aggressive roadmap of launching lending products for consumers and businesses, extending its savings accounts beyond the UK and bringing banking services to more European countries, surely it won’t be long before the fast-growing fintech raises even more capital.

Read more: The fintechs that had a stellar 2019 – Revolut