(Bloomberg) -- Revolut Ltd., Europe’s most valuable fintech, is spinning out its €8.5 billion ($9.5 billion) wealth management offering into a standalone app, seeking to compete against the likes of Robinhood and eToro for a greater slice of the retail investor market.
The app, called Revolut Invest, will offer nearly 5,000 assets on debut, including US and European stocks, exchange-traded funds, commodities and bonds, as well as new products such as contracts for difference. Equity and bond investments will face a flat fee of either 0.25% or €1, the bank said in a statement on Tuesday, while charges for CFDs may vary.
Currently undergoing testing in Greece, Denmark and the Czech Republic, the app will be introduced in other European Economic Area countries by the end of the year, Rolandas Juteika, Revolut’s head of wealth and trading for the region, said in an interview. The plan is to double the number of assets available to trade by the same time frame, he added.
The latest move by the London-based fintech is part of group Chief Executive Officer Nik Storonsky’s ambition to build what he calls a “truly global bank” that offers access to all financial services and can rival industry giants such as JPMorgan Chase & Co. and Barclays Plc.
With the new trading platform, Revolut is looking to tap a wave of retail investors returning to the markets as central banks around the world start to cut interest rates. It is also entering an increasingly crowded space where companies like Robinhood Markets Inc., eToro Group Ltd., Trading 212 Group Ltd. and Freetrade Ltd. have already made their mark, and newcomers are facing challenges. But Revolut’s size could help it gain a foothold.
Founded in 2015, Revolut was recently valued at $45 billion in a round of investment involving a secondary share sale, more than double the $20 billion market capitalization for Robinhood. The UK fintech also has plans for an initial public offering.
Active Traders
The company already allows trading for retail investors on its main banking app. But with the standalone app, Revolut will be able to target new customers who aren’t already using its banking services — opening it up to a much broader group of retail investors. It’ll also include access to a premium subscription tier called Trading Pro, offering reduced commission fees, increased limits and analytics.
Around 5% of Revolut’s users are considered to be active, making more than one trade per week, while around 20,000 customers are signed up for Trading Pro, Juteika said.
Those who sign up for Revolut Invest will undergo the same onboarding process as Revolut’s banking customers, Juteika said, meaning they can choose to use the bank’s full services if they download the main banking app at a later date. Banking customers will also still be able to make investments from the main app.
“In terms of user experience, those active traders will still try all the platforms they want to trade with and they’ll see which ones they like more than others,” Juteika said.
Revolut had around 45 million customers at the end of June, according to its most recent annual report, of which more than 3 million users already use its investment services. Assets under management in its wealth offering have almost tripled to €8.5 billion, from €3 billion at the end of 2023, Juteika said.
The bank will expand the Invest app to other jurisdictions over time, having already secured the relevant licensing to do so in the UK, US, Singapore and Australia. Revolut’s recent success in securing a full banking license in the UK is one of the reasons the Invest app is not available there, Juteika said, as it’s presently undergoing a so-called mobilization period.
--With assistance from Aisha S Gani.
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