British fintech Revolut is looking to use some of the proceeds of its recent $500m fundraising to buy rival technology companies that have been hit by the coronavirus pandemic. Nikolay Storonsky, chief executive, told the Financial Times that Revolut had “a real opportunity” to benefit from the crisis, despite suffering a substantial hit to its revenues as lockdowns around the world caused a drop-off in card transactions. Revolut launched five years ago as a prepaid debit card that allowed customers to avoid foreign exchange fees while travelling. Since then it has expanded into areas ranging from cryptocurrency trading to business banking. Mr Storonsky said he was now looking to build on Revolut’s roots as a card for travellers, by targeting deals in areas such as travel aggregation, which would allow customers to buy flights or rent cars through the Revolut app when travel restrictions are finally lifted.
“A lot of travel aggregators are in trouble at the moment — we could probably purchase one and sell flight tickets at cost and be 10 to 15 per cent cheaper than everyone else,” he said. Revolut recently appointed Don Hoang, a former Uber executive, to lead its dealmaking efforts. Mr Storonsky added: “This is not just blue-sky thinking — we’ve just done a fundraising, we’re cash rich.” Many tech start-ups have been struggling since the start of the pandemic as their venture capital backers grow more cautious about providing further funding to companies that were already lossmaking. However, Revolut raised $500m from investors in February, valuing the group at $5.5bn, shortly before the pandemic began to seriously affect Europe.
Mr Storonsky acknowledged that Revolut had suffered because of a reduction in card spending, but said “overall we are weathering it OK compared to other players”. The company has so far not had to furlough any of its 2,500 staff, unlike rivals such as Monzo, although it has asked some employees to swap a portion of their salaries for shares in an attempt to conserve cash. Mr Storonsky said it “might” use the furlough scheme in future. Revolut’s hunt for acquisitions is part of a wider effort to continue expanding despite the damage caused by the coronavirus.
On Monday, it announced that it had finally started operating as a full bank in Lithuania, where it secured its first banking licence in late 2018. The change will allow its 300,000 Lithuanian customers to upgrade from e-money accounts to full bank accounts, meaning their money will be covered by the country’s deposit guarantee scheme. The company said it would introduce consumer loans and expand the service into the rest of central and eastern Europe later this year. Revolut is also planning to start offering credit cards in the UK after applying for a consumer credit licence, according to recent job ads. It is looking to recruit credit specialists to lead development of the new service. A person close to the company said it was not expected to launch this year.