- Revolut reached a record valuation With the $500m raised in February, Revolut reached a valuation of $5.5bn, becoming one of the most valuable fintechs in Europe. Having started with a card product and expanded from there, Revolut has now launched not-inexpensive pushes into both the US and the corporate market.
- Growing through new products and capabilities We can see a consistency in the use of the proceeds: financing geographic expansion (often into the US market) and enlarging and improving the current product offering (e.g. Remitly’s Passbook or Airwallex’s payment infrastructure).
- More funds to weather the current crisis Many of the neobanks rely on revenue from interchange fees, which is mostly driven by travel. This revenue has dropped off a cliff. Players like Revolut are in a much better place than rivals such as Monzo to weather this storm, the latter having had to close offices and furlough staff.
Despite the global Covid-19 crisis dragging the cross-border payments market down, the first months of 2020 have seen the completion of some successful funding rounds, after a break from the major raises seen in early 2019. What do these funding boosts mean for the cross-border players and the sector as a whole? Our main takeaways are: