UK fintech startup Revolut recorded pretax losses of £207,875 in 2020, almost double the £107,680 it reported in 2019, despite cashing in on the cryptocurrency boom.
In its annual earnings report, the firm said it made £39 million on its cryptocurrency investments last year, while demand for its crypto services pushed its revenues up 34% to £222 million.
The company capitalised on rising prices of Bitcoin, which jumped nearly 300% to $28,500 in 2020, before peaking at just over $60,000 in April this year. The increase has been credited to a number of factors, such as endorsements from the likes of Elon Musk and the wider adoption of Bitcoin payments from various financial institutions and companies.
However, Bitcoin has dropped significantly in recent months; it currently sits at about $32,500 after China's central bank demanded tougher regulation on cryptocurrency use.
Revolut, which was founded by former Lehman Brothers trader Nik Storonsky and ex-Standard Life Aberdeen boss Martin Gilbert, said the startup had finally become profitable in the final two months of 2020, but further investments in engineers and share-based payouts for employees pushed its losses up to over £200,000.
The company launched in 2015, with a prepaid card offering free currency exchanges to customers. It's one of the UK's fastest-growing fintech startups with a reported valuation of $5.5 billion and plans to expand into 34 other countries.
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"As the extraordinary circumstances of 2020 drove the trend towards digital financial management we continued to innovate for customers to make their financial lives easier and accelerate daily use," Storonsky said.
"We launched 24 new retail and business products, expanded into the US, Japan and Australia and launched banking services in Lithuania, all while significantly improving our profitability. We began 2021 with a more resilient and productive business that will enhance our trajectory towards rapid growth."
