Revolut raises £1.5m in funding
Corporate · 20 July 2015
London, 20 July 2015
Revolut, an alternative foreign exchange service, has recently raised investment in a round led by Balderton Capital, Europe’s leading tech venture capital firm, to launch its ground-breaking international money-transfer app on iOS and Android.
Balderton leads a £1.5m investment round, and adds Revolut to its portfolio of successful fintech companies such as Zopa, Crowdcube and Nutmeg. SeedCamp, Europe's leading pre-seed and seed stage acceleration fund, is also backing Revolut.
The cost of spending and sending money abroad from the UK in 2015 is estimated to hit $1.67bn. Revolut has launched with the ability and ambition to eradicate unwarranted fees levied at consumers and those that penalise the recipients of much needed remittance.
UK issued debit, credit and charge cards were used to make 440 million purchases abroad in 2014. UK consumers also used their cards to withdraw the equivalent of $9.5billion in cash while overseas last year, making a total of 53 million visits to overseas ATMs . The mean average of charges imposed by the banks on debit card use in 2014 totaled $439m. This staggering sum has been calculated without even considering the additional costs incurred by Brits exchanging cash currency before travelling, estimated also to be in the hundreds of millions.
For sending money to friends and family abroad, the picture is no better. According to the World Bank, the average cost of sending money abroad in the UK is currently 7.2% . Revolut has calculated that equates to around $1.23 billion a year when you consider the $17.1bn sent abroad by migrants in 2014 .
In a bid to eliminate these unwarranted charges, Revolut has committed to offering completely unbeatable rates and zero charges for foreign exchange for the first 12 months of a customer using the service. Combined, Revolut’s free intuitive app and prepaid Mastercard act as a money service, converting money in up to 23 currencies as customers spend and send using the best available rates.
Once a customer downloads the free Revolut app (available on iOS and Android), they are able to set up an account and order a free multi-currency MasterCard in a matter of seconds. The Revolut card is delivered at no cost to the customer within two working days in the UK. The card can be used abroad with no fees when you spend or withdraw cash from an ATM.
Nikolay Storonsky, CEO and Founder at Revolut said:
“Revolut has an ambition to change the way money is transacted, sent and spent around the world. We are proud and delighted to introduce the world’s best-value digital currency exchange service. The app and card are intuitive to use, free for all and offer customers the peace of mind that, with Revolut, you can use your money across borders at unbeatable value.”
Daniel Waterhouse, General Partner at Balderton said,
“The addressable market for Revolut is huge. Of course, eradicating hidden costs for travellers is a big part of what they do, but Revolut's app has a myriad of applications. Those who own property abroad, companies that pay foreign workers, and those sending wages across borders all stand to benefit. We are delighted to invest in Revolut as they have an exceptionally bright team, and they're solving a major pain-point that the banks have ignored, and they're doing it with an extremely elegant, mobile-first user-interface."
How does it work?
In order to guarantee the very best rate available, Revolut takes the Interbank exchange rate, which is updated every half a second. The Interbank is the top-level wholesale market through which most currency transactions are channelled and, as such, offers the best possible exchange rate.
Revolut works via a multi-currency MasterCard and a mobile app, available on both iOS and Android. Users are able to set up an account via the Revolut app in seconds, enabling them to transfer money via SMS, WhatsApp and social media channels.
The Revolut multi-currency card is linked to the Revolut app and, like a credit or debit card, can be used wherever MasterCard is accepted, at ATMs, in-store, or online.
Revolut is working with Optimal Payments to utilise their payments expertise. Through partnership with Optimal Payments, Revolut enables customers to hold funds in multiple currencies, and to spend online and in-store with an accepted multi-currency MasterCard.
Optimal Payments’ Acquiring Services enables Revolut’s customers to load funds to their accounts. Merchants use NETBANX® and Optimal Payments’ acquiring platform and services to simplify how they accept credit and debit card. Optimal Payments is authorised by the UK Financial Conduct Authority (FCA) to issue electronic money and is a Principal Member of MasterCard International Inc.
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