Fintech giant Revolut seeks licenses to operate in the UAE and Saudi

💸 Revolut has applied to the UAE’s central bank for an electronic-money institution license to offer remittance services, with the ultimate goal of securing a full banking license, similar to the one it recently obtained in the UK.

• Founded in 2015, Revolut began as a multi-currency prepaid card and app, evolving into a financial super-app offering services from international transfers to stock trading. It now serves over 45 million personal and 500k business customers globally.

💰 The share sale: This move follows a $45 billion valuation in a secondary share sale, which included Abu Dhabi’s Mubadala as a new investor.

• The sale saw $500 million in employee shares sold, with CEO Nik Storonsky selling up to $300 million.

📖 The back story

Revolut first entered the UAE in 2022, establishing a team of 140 at the Dubai International Financial Centre. CEO Nik Storonsky has long aimed to enter the Gulf market, though licensing challenges have previously restricted UAE residents from opening accounts.

Alongside its UAE ambitions, Revolut is also eyeing neighbouring Saudi Arabia as a growth market.

To support its expansion, Revolut is hiring key roles in finance, legal, compliance, crypto, engineering, and product development in Dubai.

⚙️ Breaking it down

The UAE, with its large expat population and booming remittance industry, presents a significant opportunity, particularly in the India-UAE remittance corridor, where $21.6 billion was sent to India in 2023.

Revolut’s competitive exchange rates close to the interbank rate make it well-positioned to attract customers in this lucrative market.

🐂 Bull case

1. The UAE’s large expat population, many of whom are familiar with or already use Revolut, positions the company for a quick launch.
2. Outward remittances from the UAE totaled $38.5 billion in 2023, one of the highest globally, despite a 3% YoY decline.
3. Abu Dhabi’s Mubadala sovereign wealth fund is expected to help Revolut secure regulatory approvals, aiding in its pursuit of a full banking license in the UAE.

🔮 Flashforward

Revolut’s expansion is likely to attract more global fintechs to Dubai. Sources suggest LATAM’s Nubank, with over 100 million customers, is also eyeing MENA for its next move.

Revolut’s entry will disrupt the market, pushing regional players to innovate. Startups that aren’t prepared will struggle. But for customers, this increased competition should lead to better banking services, which we’re counting a win.