Trent Rhode
Revolut, the popular fintech firm, has released its long-delayed 2021 accounts after months of regulatory scrutiny and an overhaul of its internal accounting systems.
While the company’s overall revenue figure was not called into question by its auditor, BDO LLP, the company was unable to verify three-quarters of its reported revenue due to concerns about verification procedures.
BDO flagged concerns about the lack of IT and business process controls to provide sufficient appropriate assurance over £477m of revenue from subscriptions, cards, foreign exchange, and wealth activities.
Revolut Revenue Propped Up By Crypto Trading
However, a spokesperson for Revolut dismissed concerns, stating that the completeness of the balance sheet meant that the total revenue figure was correct. Despite the issues surrounding the verification procedures, Revolut’s overall revenue jumped by 33% last year to over £850m, helped in large part by a boom in its cryptocurrency trading arm.
In fact, Revolut made its first full-year profit in 2021–£26 million after a 2020 deficit of £223 million. The company’s total revenue nearly tripled as cryptocurrency trading experienced an unprecedented surge; a key component of the company’s operations.
This growth in revenue occurred despite a downturn in the crypto market, which brought in around 5-10% of the company’s total income.
In response to the Financial Reporting Council’s statement that Revolut’s audit for 2020 was “inadequate” and “the risk of an undetected material misstatement was unacceptably high,” the company swapped out its internal accounting systems.
Revolut. Is. PROFITABLE.
Source: trust me, bro
Say whaaa? pic.twitter.com/e7SbtOim3d
— Robert Collings (@RobertCollings_) March 1, 2023
Revolut’s success in growing its revenue through cryptocurrency trading highlights the company’s focus on innovation and diversification, which been a key part of its business strategy since its inception in 2015.
The company has raised over $1.7bn from investors like SoftBank and has a current valuation of $33bn, making it one of the UK’s most valuable start-ups. CFO Mikko Salovaara noted that the company has no plans to fundraise in the near future, stating that Revolut is “self-sustained” and that the company will “eventually be a public listed business, but it’s not a priority”.
Salovaara, who came to the role from investment firm 3G Capital in 2021, announced that Revolut is also in the final stages of acquiring a UK banking licence, which the company applied for two years ago.
While the company is likely to opt for an “authorisation with restriction”, which imposes certain limits on the business, relationships with regulators have been reasonable thus far according to Salovaara.
Salovaara declined to reveal if the company was profitable in 2022. The annual accounts are anticipated to be published by June, although it is feasible that this timeline may take longer depending on BDO’s audit process.
Related:
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- BoE’s Broadbent Says Digital Currencies Will Provide Lucrative Opportunities for Business
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This article was written for Business 2 Community by Trent Rhode.
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