Fintech company Revolut has raised £1.5m in a funding round led by leading tech VC house Balderton Capital, reported TechWorld’s Sam Shead. Funding will be used to launch the business’ money transfer app on iOS and Android. Revolut’s technology allows people to transfer money through a smartphone app without incurring the fees that banks and other financial services levy on consumers as they travel.
Balderton, the funding round’s leading firm, includes fintech trailblazers Nutmeg, Zopa and Crowdcube in its portfolio. Revolut seeks to provide an alternative to traditional banking services in the foreign money transfer space. With the cost of spending and sending money abroad from the UK in 2015 estimated to hit $1.67B, companies are looking to follow successful young businesses such as TransferWise in the alternative money services space.
“Revolut has an ambition to change the way money is transacted, sent and spent around the world,” Nikolay Storonsky, founder and CEO of Revolut, commented. “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.”
The Revolut app works in tandem with its free MasterCard app that can be ordered through the app after the user sets up her account. The card can be used globally with no fees when the customer spends or withdraws cash from an ATM.
Balderton is one of many venture capital firms investing millions of pounds in fintech companies in London. According to Shead, “Global investment in fintech ventures tripled from $4.05 billion (£2.6 billion) in 2013 to $12.2 billion (£7.8 billion) in 2014, with Europe the fastest growing region in the world, according to a report by IT outsourcing and consultancy firm Accenture.”
“As you probably know, we have a long history of investing in the fintech category and a very deep understanding of it,” Daniel Waterhouse, general partner at Balderton, explained. “We spend a lot of time looking at companies in all sorts of areas and clearly the foreign currency market is interesting as consumers have been paying pretty ridiculous fees and costs on currency conversion in the past.We looked at lots of players and when we saw Revolut we thought, ‘Wow, this has really cracked it in terms of what it does and the user experience.’ Revolut can remit stuff and send money to other people, but the primary use cases are going to be spending money in a foreign currency, so when I go on holiday and want to pay foreign bills or transfer money from the UK to my US bank account I can do that from the phone in my pocket.”