Revolut IPO: what to know and how to buy shares

When could the Revolut IPO happen?

While Revolut has not officially announced its initial public offering (IPO) date, recent developments suggest it may still be a couple of years away. The London-based fintech giant, valued at around $45 billion, appears to be prioritising a potential listing on the Nasdaq in the United States rather than in its home market of London, according to the Financial Times.

However, the UK government is actively engaging with Revolut to promote London as a listing destination. The Treasury plans for City minister Tulip Siddiq to meet with Revolut in the autumn, the Financial Times reported, likely discussing the company's listing plans among other financial services issues.

This engagement is part of a broader effort to maintain London's competitiveness as a financial hub and could potentially influence Revolut's decision on where to list.

Several factors could influence Revolut's IPO timing. Market recognition in the United States is one key consideration, with investors suggesting it would be beneficial if US long-only investors were more familiar with the company before an IPO.

Additionally, Revolut's recent acquisition of a UK banking licence after a three-year process could potentially accelerate IPO plans, as it allows the company to hold deposits directly and increase lending in the UK.

Revolut IPO: how to buy shares if the company lists

1. Do your research on Revolut
2. Decide whether you want to trade or invest
3. Open an account
4. Search for Revolut on our platform or app and open your position

If you want to buy Revolut shares and own them, you'd open a share dealing account. If Revolut lists in the US, you'll be able to buy shares on the day of the IPO. It'll cost £0 commission if you've traded 3+ times in the previous calendar month, otherwise £10.

If Revolut lists in the UK and offer a primary market, you'd be able to buy shares at the IPO price with us ahead of the listing for zero commission.

Otherwise, you can invest in Revolut stock right away on the day of the listing. It'll cost £3 commission if you've traded 3+ times in the previous calendar month, or £8 if you have not.

If you want to trade Revolut shares with derivatives, you would open a spread betting or CFD trading account. Spread bets are commission-free, while CFDs incur a £10 commission on UK shares / $15 on US stocks. When trading, you can go long or short and you'll trade on leverage.

This means you could gain or lose money much faster than you'd expect, as your trade size is much larger than your initial outlay. This means you could lose more than your initial deposit. It's best to have a risk management plan in place before you trade using leverage.

What does Revolut do?

Revolut is headquartered in London, UK. It was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko at renowned financial technology incubator Level39’s premises in Canary Wharf.

Revolut is a pioneering fintech company that offers a comprehensive suite of financial services through its mobile app. Unlike traditional banks, Revolut allows users to open an account within minutes, without the need for paperwork or credit checks. This digital-first approach has revolutionised how people manage their money, alongside competitors like Monzo.

The company's core services include sending and receiving money, exchanging currencies at competitive rates, withdrawing cash from ATMs worldwide, and making payments using a smartphone or Revolut card. Beyond these basic banking functions, Revolut has expanded its offerings to include cryptocurrency trading, stock trading, and peer-to-peer payments, providing users with a one-stop shop for various financial needs.

A key feature of Revolut's platform is its focus on transparency and user control. The app allows users to track their spending, set budgets, and receive real-time notifications, empowering them to make informed financial decisions. This user-friendly approach, combined with extensive features and competitive pricing, has helped Revolut rapidly grow its customer base to over 35 million users worldwide.

What is Revolut's business model?

Revolut's business model is built on disrupting traditional banking by providing cost-effective, user-friendly financial services. The company generates revenue through multiple streams, creating a diversified and resilient financial structure.

Card and interchange fees

One of Revolut's primary revenue sources is cards and interchange fees. When customers use their Revolut debit cards for purchases, the company earns revenue through interchange fees paid by merchants. Given Revolut's large user base, this high volume of transactions contributes significantly to its income.

Subscription fees

Subscription fees form another key part of Revolut's business model. The company offers premium and metal plans that provide additional benefits and features to customers for a monthly fee. These plans include perks such as higher withdrawal limits, exclusive card designs, travel insurance, and cashback on purchases, generating recurring revenue and enhancing customer loyalty.

FX transactions

Forex transactions are another substantial revenue stream for Revolut. The company offers competitive exchange rates with a small markup or fee, capitalising on its popularity among travellers and international business users.

Additionally, Revolut has expanded into wealth products, offering services like cryptocurrency trading and savings products, further diversifying its income sources.

For those interested in investing in fintech companies, understanding Revolut's diverse business model is crucial when considering potential future investment opportunities.

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Who are Revolut's competitors?

Arguably, Revolut’s biggest competitor in the multi-currency account space is Wise, in terms of the products and services offered by both platforms. While Revolut supports 33 currencies, Wise supports over 40 currencies as of August 2024.

Other global competitors in the money transfer and foreign exchange space include Wirex, PayPal, Monzo and Skrill.

What is Revolut valued at and what could the Revolut share price be?

Revolut is currently valued at around $45 billion.

This valuation puts Revolut among the most valuable fintech companies globally and even surpasses the market capitalisation of many traditional banks. The company's high valuation reflects its rapid growth, innovative services, and potential for future expansion in the competitive fintech sector.

As for Revolut's potential share price, it's important to note that the company is not yet publicly traded, so there isn't a current market-determined share price. The exact share price at IPO would depend on various factors, including market conditions at the time of listing, investor demand, and the number of shares Revolut decides to issue

What's the outlook for the Revolut IPO?

The outlook for Revolut's IPO remains a topic of keen interest in the financial world, with several factors influencing its potential trajectory. As mentioned, despite being headquartered in London, Revolut appears to be leaning towards a listing on the Nasdaq in the United States.

This preference is largely driven by the perception of higher liquidity in US markets, which could potentially lead to a more favourable valuation for the company.

However, the UK government is actively working to make London a more attractive listing destination for Revolut. The Treasury's planned engagement with the company, including a meeting between City minister Tulip Siddiq and Revolut executives, demonstrates the UK's commitment to retaining high-profile tech listings.

Recent reforms to the UK's listing regime, praised by Revolut's chair Martin Gilbert, could also play a role in the company's final decision.

While the exact timing of the IPO remains uncertain, Revolut's recent acquisition of a UK banking licence and its ongoing efforts to secure a similar permit in the US market could be key milestones influencing the IPO timeline.

Here are some more topics you might be interested in:

• How to trade or invest in IPOs
• The top upcoming IPOs to watch
• Buying shares with us
• How to trade stocks