London-based FinTech Revolut is planning to tap the $500 million it got from investors to acquire competing technology firms suffering from the impact of the global coronavirus pandemic.
Revolut Founder and CEO Nikolay Storonsky told the Financial Times in a Tuesday (May 5) report that his business has “a real opportunity” to use the pandemic to its advantage. Although the startup lost revenue due to decreased card usage worldwide amid COVID-19, it’s still in a solid position.
Founded in 2015, Revolut began with a prepaid debit card that enables people to sidestep foreign exchange fees while traveling abroad. Since its founding days, the FinTech has expanded its offerings to include cryptocurrency trading, business banking and more.
Storonsky told FT the goal now is to expand the company’s prepaid debit card roots look for deals in travel aggregation so its users can purchase flights or rent vehicles using the Revolut app.
“A lot of travel aggregators are in trouble at the moment — we could probably purchase one and sell flight tickets at cost and be 10 to 15 percent cheaper than everyone else,” he said.
Revolut hired Don Hoang, former director of business for Uber, to head up its dealmaking efforts.
“This is not just blue-sky thinking — we’ve just done a fundraising, we’re cash-rich,” Storonsky said.
The global pandemic pushed many startups in the technology sector to the brink of survival as venture capital investors hesitated to put more money into unprofitable firms. Revolut raised $500 million in February, which upped its valuation to $5.5 billion prior to the pandemic’s surge in Europe.
Although Revolut took a hit from reduced card spending, Storonsky said that “overall we are weathering it OK compared to other players.”
Unlike competitors, the startup hasn’t laid off or furloughed any of its 2,500 workers. It did ask some employees to exchange a percentage of its pay for shares in the company. If Revolut ends up having to conserve cash, Storonsky said it “might” consider future furloughs.
After attracting over 10 million customers across Europe, Revolut launched in the U.S. in March.