Revolut in Ukraine. How can this affect the market?
Not so long ago, the British company Revolut registered a legal entity in Ukraine, and after that the news that there would be a full-fledged launch throughout the country immediately passed. Nikita Izmailov, an investor and entrepreneur, has a few words to say about this. In general, why the interest in the Ukrainian market and how things will develop in the future?
What is Revolut?
This is a banking service "without branches". The main product is a mobile application, as well as a card which is immediately linked to certain accounts in various currencies. For example, if you pay in euros, the funds will be deducted from the existing account. And if there is not enough money, then it is possible to carry out the conversion of funds. In addition, there is an opportunity to purchase cryptocurrency or valuable assets, securities and so on. At the moment, the company has about 16 million customers and more than 150 million transfers within a month.
How will the development go in Ukraine?
In the middle of 2012 Revolut started actively developing all over the country and there were 25 openings in the capital. This is due to the early cooperation, i.e. the foreign company understands that there are a lot of high-class specialists in the country. That is why hiring is actively continuing, albeit at a small pace. But it is still an advantage.
Why is the Ukrainian market interesting?
In fact, there are several good reasons:
- The role of the co-founder. The co-founder has a lot of useful contacts, which contribute to development. The more so, the competition is quite low, as similar projects do not yet look in this direction.
- Constant transfers of funds from Europe to Ukraine. For the first half of 2021 the growth is 108%. And even for a few months the amount has increased by 7%, and this is already a good performance. Revolut is one of the most convenient platforms for transactions.
- Attracting new money. At the beginning of the year the company attracted quite a few investors, and the amount of investment reached almost 600 million dollars. And it's this approach that allows it to occupy new markets, including Ukraine.
What problems may there be?
Already now the company can be compared to existing banks, especially in terms of client base. But at the moment Revolut is even less competitive, as it does not have extensive lending opportunities. In fact, the reason is extremely simple, just no earnings from the loan portfolio.
The situation is quite complicated also because we do not yet have our own specialists. So you have to work with local financial companies. But for Revolut you need clients with a crystal clear reputation, and it is better to have 100% foreign capital. And there are not many such options, while the existing ones are mostly technologically passive.