Revolut's Road to IPO Will Test Fintech’s Hype

In traditional European banking, where cross-border deals are finally stirring, the question is: “Will they merge?” In the world of fintech, where whizzy venture-backed growth has cooled in the face of increased competition, regulation and a funding drought, it’s: “Will they list?” For neobank Revolut, the fintech hype looks set to be tested, with co-founder Nik Storonsky recently flagging that backers will want an initial public offering “sooner or later” and that the US looks a preferable listing destination.

Private markets currently value Revolut at $45 billion, following recent employee share sales, which puts the app in line with current public-market capitalizations of NatWest Plc, CaixaBank SA and Deutsche Bank AG. That’s a mark of confidence in a platform that lacks the huge loan books or trading floors of those banks yet has managed to amass 50 million customers, secure a provisional UK banking license and turn a profit three years running. (Though let’s not forget the fraud victims and hacks along the way.) The question for potential investors will be whether Revolut’s fee machine can keep whirring across new geographies and product lines while controlling costs. That’s a hard sell.