Revolut CEO Nik Storonsky says his firm broke even in November, a month after Starling announced its own profit.
Just a month after rival Starling posted a £800,000 profit, Revolut has – for the second time – broken even, pushing it closer to profitability.
The fintech first broke even in December 2018, but aggressive growth plans quickly it back into the red.
In August, Revolut posted a loss of £106.5 million – more than triple what it lost a year earlier.
But Revolut’s revenues were climbing by as much as 180% pre-pandemic. Whilst Storonsky admits that revenues dipped 40% when the pandemic hit, the team has turned things around drastically.
“We’re now actually 50% ahead in terms of revenues compared to pre-Covid levels,” Storonsky tells CNBC.
“Gross margins increased significantly as well. In terms of financials, we broke even in November and we’re doing much better compared to pre-Covid times.”
The digital challenger counts some 13 million retail banking users and half a million business customers.
But its focus now seems to steer more towards boosting user activity and further monetising the user base it already has.
The fintech has unveiled a number of new products in recent years to do this.
These include its trading platform, its business accounts, and an acquiring solution which takes on Stripe.
All of these offerings are, and will, help the challenger move away from an interchange-reliant survival approach.
“We have many revenue lines because we are a very well-diversified payments business,” Storonsky tells CNBC.
The CEO adds that it is making progress with its credit product in Lithuania and Poland. “It does not make sense to have a banking license unless you lend.”
The challenger secured its banking licence back in late 2018.
Monzo – the odd one out?
This month, Revolut rival Monzo landed £60 million in funding from a host of new backers – including Stripe and Deliveroo investor, Novator.
Its latest funding still leaves it with its £1.2 billion valuation – a 40% drop on its value pre-pandemic.
And there’s no sign of profitability on the horizon for Monzo. At least, it’s made no statements to suggest so.
Since COVID-19-induced lockdowns began, Monzo has raised £125 million. Like its peers, Monzo has been trying to diversify its revenue streams beyond interchange fees.
New CEO TS Anil told TechCrunch the challenger now has 60,000 business customers – more than double the 25,000 it had in June.
It also has more than 100,000 customers across its paid-for current accounts. These include both Monzo Plus and Monzo Premium.