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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Revolut IPO: what to know and how to buy shares

Here’s everything you should know about the highly anticipated initial public offering (IPO) of UK fintech unicorn, Revolut.

revolut ipo listing share price sale stock lse uk unicorn app banking Source: Bloomberg

When could the Revolut IPO happen?

The initial public offering (IPO) was initially planned for 2022, but this is now looking increasingly unlikely, according to CEO and co-founder Nikolay Storonsky.

Storonsky said in a September 2021 interview that the company would ‘need to be at least in the few billion dollars range of revenue a year’ for the flotation to be successful.

Revolut recorded a revenue of $361 million in 2021, which is a far cry from Storonky’s indicated revenue range.

However, speculation of a possible IPO picked up momentum again earlier this year, after the company recruited former Standard Life Aberdeen joint chief executive Martin Gilbert as chairman and welcomed Michael Sherwood, the former joint UK chief executive of Goldman Sachs to its board.

A Revolut spokesman has since said that a share sale would ‘probably’ not take place in 2022. “We’ll IPO when the time is right and when we need to,” they stated, adding that the focus is on business growth in 2022.

Revolut IPO: how to buy shares if the company lists

  1. Do your research on Revolut
  2. Decide whether you want to trade or invest
  3. Open an account
  4. Search for Revolut on our platform or app and open your position

If you want to buy Revolut shares and own them, you'd open a share dealing account. If Revolut lists in the UK and offer a primary market, you'd be able to buy shares at the IPO price with us ahead of the listing for zero commission.

Otherwise, you can invest in Revolut stock right away on the day of the listing. It'll cost £3 commission if you've traded 3+ times in the previous calendar month, or £8 if you have not.

If you want to trade Revolut shares with derivatives, you would open a spread betting or CFD trading account. Spread bets are commission-free, while CFDs incur a £10 commission on UK shares. When trading, you can go long or short and you'll trade on leverage. This means you could gain or lose money much faster than you'd expect, as your trade size is much larger than your initial outlay.

What does Revolut do?

Revolut is headquartered in London, UK. It was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko at renowned financial technology incubator Level39’s premises in Canary Wharf.

Revolut is a digital app that offers a range of traditional banking and financial services, including multi-currency (such as British pound and euro) bank accounts, debit cards, a fee-free currency exchange, commission-free stock trading, a cryptocurrency exchange, and peer-to-peer payments.

The Revolut mobile app directly supports spending and ATM withdrawals in 120 currencies, as well as transfers in 28 currencies.

It also provides crypto on-ramp services by allowing customers to use 25 fiat currencies to exchange for cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP via 25 fiat currencies.

What is Revolut's business model?

Revolut offers commission free stock trading for New York Stock Exchange- and NASDAQ-listed shares. Users have the option of trading shares via fractional share purchase options.

However, stocks purchased within the app cannot be transferred to another trading platform or broker. Users are required to sell or convert their holdings back to cash before being allowed to withdraw their capital.

On the crypto front, a fee of 1.5% for buying or selling applies. Crypto assets cannot be deposited or spent, but can be converted back to fiat within the Revolut app.

For regular spending, ATM withdrawals and money transfers, an extra fee of 0.5% to 2% is charged on weekends to hedge against any potential exchange rate fluctuations.

Who are Revolut's competitors?

Arguably, Revolut’s biggest competitor in the multi-currency account space is Wise, in terms of the products and services offered by both platforms. While Revolut supports 28 currencies, Wise supports a total of 53 currencies as of April 2022.

Its currency conversion fees are also slightly higher than Wise’s fees, which start from 0.41%, against Revolut’s average fee range of 0.5% to 2%.

Other global competitors in the money transfer and foreign exchange space include Wirex, PayPal, Monzo and Skrill.

What is Revolut valued at and what could the Revolut share price be?

Revolut has a private valuation of around $33 billion.

The financial ‘super app’ raised $800 million in its Series E funding round in July 2021 – its most recent – led by Softbank Vision Fund 2 and Tiger Global.

This followed its Series D a year prior, when it managed to secure $580 million of funds.

There is no word yet on what Revolut’s launch share price will be. More details will be announced closer to the IPO date.

What's the outlook for the Revolut IPO?

The outlook for Revolut’s IPO boils down to how much growth the company achieves and how well it does in the coming financial year.

While the company continues to add new services each year, it operates in the UK on a digital banking licence, which means it is not allowed to lend directly to users. Customer deposits are also not protected by state insurance, which could prove a roadblock further down the road.

Experts say that it is extremely difficult to secure a full banking licence in the UK, with authorities paying great attention to an applicant’s know-your-customer procedures. To circumvent this, Revolut has hired about 300 risk and compliance professionals.

On the plus side, a digital banking licence makes Revolut less scrutinised than a traditional bank.

Here are some more topics you might be interested in:

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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