Revolut has an ambitious goal. It's aiming to build the world's financial super app. The company wants to give people and businesses greater control of their finances so they can make better-informed decisions about how they spend, save, and grow their money.

The company has come a long way in a short period. It started in 2015 in the U.K. by offering transfers and foreign exchange faster and cheaper than traditional banks. It has since grown into a global financial powerhouse with more than 30 million customers across 30 European countries, making more than 400 million transactions each month. The company plans to launch new products and expand to more countries worldwide to continue growing its reach.

Revolut's revolutionary approach and rapid growth are making it a widely anticipated initial public offering (IPO). The company's products and growth potential might have you interested in investing in its stock. Here's a guide to everything you need to know about how to invest in stocks like Revolut and the company ahead of its eventual IPO.

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Image source: Getty Images.

Is it publicly traded?

Is Revolut publicly traded?

Revolut wasn't a publicly traded company as of late 2023. It had yet to complete an initial public offering.

IPO

When will Revolut IPO?

Revolut didn't have an IPO on the calendar as of late 2023. The IPO market was still in a deep freeze, especially for technology-related companies. It will likely wait to complete its IPO until the market starts heating back up. Revolut also had yet to receive its U.K. banking license, another factor delaying its IPO.

IPO

IPO (Initial Public Offering) is the first sale of stock by a private company to the public, making it a publicly traded entity.

How to invest

How to buy Revolut stock

You can't yet buy shares of Revolt in a brokerage account because it's not a publicly traded company. However, investors interested in the financial technology company do have options. Here are three Revolut investment alternatives:

1. Nu Holdings

Nu Holdings (NU 1.66%) is a digital financial service company. It offers savings, investing, borrowing, and insurance solutions to more than 85 million customers in its home country of Brazil, as well as Mexico and Columbia. The company's growth potential has caught the eye of well-known investor Warren Buffett. His company, Berkshire Hathaway (BRK.A -0.76%)(BRK.B -0.69%), was an early shareholder of Nu Holdings.

2. PayPal Holdings

PayPal Holdings (NYSE:PYPL) is a leader in digital payments. The company's technology serves as a backbone to enable people to make digital payments to merchants and other PayPal users. It had more than 431 million users as of late 2023. PayPal is a highly profitable company that generates significant free cash flow, most of which it returns to investors through share repurchases.

3. SoFi Technologies

SoFi Technologies (SOFI 3.69%) is a financial services company. It provides customers with bank accounts, credit cards, brokerage accounts, mortgages, student loans, and insurance. The company is expanding fast as more consumers sign up for its growing list of financial products and services. It had more than 6.2 million users as of mid-2023, up 44% from the previous year. While SoFi is growing fast, it wasn't yet profitable as of mid-2023.

People who want to buy one of these Revolut alternatives can purchase shares in any brokerage account. Here's a step-by-step guide to investing in these financial technology companies.

  • Step 1: Open a brokerage account: You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time to research the brokers to find the best one for you.
  • Step 2: Figure out your budget: Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years. You don't have to get there on the first day. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.
  • Step 3: Do your research: It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to make sure you have a solid grasp on whether the company can grow value for its shareholders over the long term.
  • Step 4: Place an order: Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:

Once you complete the order page, click to submit your trade and become a shareholder of one of these Revolut alternatives.

Investors would follow a similar process to buy an IPO stock like Revolut when it goes public. Once shares become available, select Revolut's chosen stock ticker to buy shares through your brokerage account.

Profitability

Is Revolut profitable?

Private companies like Revolut don't have to report quarterly earnings like public companies, so there isn't any recent financial data on Revolut.

The last publicly available data on Revolut's finances came in its 2021 annual report, released in early 2023. According to its report, the company generated $769 million in revenue and $31 million in net income in 2021. Those numbers were vast improvements from 2020 when the company posted $266 million in revenue and recorded a $270 million net loss.

Revolut expected its revenue to grow more than 30% in 2022. The company anticipated it would remain profitable. Martin Gilbert, Revolut's chairman, commented on the company's 2021 results in a press release, stating: "This strong financial performance shows Revolut has efficiently moved from the 'start-up' business that is only focused on growth, to the 'scale-up' looking to grow profitably."

Continued profit growth will be important for Revolut as it seeks to go public. Over the long term, earnings growth is historically the primary driver of stock price appreciation.

Should you invest?

Should I invest in Revolut?

Since Revolut isn't public yet, investors have lots of time to research the company to determine if they want to buy shares when it eventually completes its IPO. Here are some factors that could lead you to buy shares when the company goes public:

  • You're a fan of Revolut and use its products.
  • You think Revolut can disrupt the traditional banking sector.
  • You believe Revolut can continue growing its revenue brisky and deliver even faster earnings growth.
  • You think Revolut deserves a high valuation, given its growth prospects.
  • You understand the risks of investing in IPO stocks, including that the shares could be volatile and lose value.

On the other hand, here are some reasons why you might decide not to invest in Revolut's IPO:

  • You don't use Revolut or prefer a competitor's platform.
  • You're concerned about Revolut's competition, which could affect its ability to grow.
  • You're more of a value-focused investor and think Revolut's valuation ($33 billion post-money value as of 2021) is high for a company generating about $1 billion in revenue and less than $100 million in annual earnings.

ETFs

ETFs with exposure to Revolut

Revolut is still a private company that hasn't completed an IPO, so investors can't get passive exposure to the fintech company through an exchange-traded fund (ETF).

Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

However, investors interested in the fintech space can gain exposure to similar companies by investing in an ETF focused on the sector. Here are two notable fintech ETFs to consider:

  • Ark Fintech Innovation ETF (ARKF 1.97%): The Ark Fintech Innovation ETF is an actively managed fund by the well-known Cathie Wood. The fund typically holds 35 to 55 companies focused on the financial technology theme. Its largest holding in late 2023 was Coinbase (COIN 5.68%) at 10.3% of its holdings. The ETF has a reasonable ETF expense ratio of 0.75%.
  • Global X FinTech ETF (NYSENKT:FINX). The Global X FinTech ETF is a passively managed fund that aims to track the Indxx Global FinTech Thematic Index. It had 61 holdings as of late 2023, led by Intuit (NASDAQ:INDU) at 9% of its holdings. This fund had a reasonable ETF expense ratio of 0.68%.

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The bottom line on Revolut

Revolut wants to be a disruptive force in the financial sector by building the world's first super app for finance. It's rapidly growing its user base as it expands into more countries and grows its suite of products and services. That's helping drive robust revenue growth and increasing profitability. If Revolut can continue growing its financial results, it could be an exciting IPO stock to buy when the company decides to go public.

Investing in Revolut FAQs

Is it good to invest in Revolut?

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Revolut is building the world's first global financial super app. It's rapidly adding more customers as it expands into new countries and provides customers with more financial products and services. That's driving brisk revenue and earnings growth.

Although Revolut wasn't a publicly traded company as of late 2023, it will likely eventually complete an IPO. Its valuation at its IPO will determine whether Revolut is a good investment. The company last raised money from investors in 2021 at a post-money valuation of $33 billion. That's pricey for a company that expected its revenue to be around $1 billion in 2022. However, if Revolut is growing its revenue and earnings rapidly when it goes public, and its valuation is reasonable, it could be a good long-term investment.

How to buy Revolut shares?

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Revolut wasn't a public company as of late 2023, so you can't buy its shares through your brokerage account.

Matthew DiLallo has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and Coinbase Global. The Motley Fool recommends Nu. The Motley Fool has a disclosure policy.