Neobanks: From Disruption to Reality

On 1 September, Revolut shook the financial world by allowing employees to sell up to 20% of their shares at $1,381.06 each, surging its valuation to $75 billion. That’s a 66% leap from its last round and enough to surpass UK stalwarts like Barclays. Revolut now stands as the most valuable neobank in the world.

And it’s not an isolated story. Brazil’s Nubank, China’s WeBank, and challengers like Inter, KakaoBank, and Wise have all scaled at lightning speed, boasting tens or even hundreds of millions of users. Just over a decade ago, the thought of opening a bank account in minutes on a smartphone was radical. Today, nearly 80% of neobank customers use their accounts daily.

How did this happen so fast?

Neobanks thrived by solving pain points traditional banks ignored:

• Revolut eliminated hidden FX costs.

• Nubank tore down Brazil’s high-fee, low-service model.

• WeBank leveraged AI to provide instant microloans to underserved customers.

  
  

Each began by owning a niche, then scaled aggressively into broader services.

But growth came at a price.Despite leaner operations, profitability proved elusive. By 2023, nearly 80% of neobanks were still in the red, dragged down by compliance demands, soaring acquisition costs, and the need to diversify beyond free accounts and card fees. Expansions into lending, investments, and insurance unlocked new revenue streams, but also pulled neobanks into the same regulatory and capital-intensive realities incumbents know well.

Where do they go from here?

The story has shifted, from raw disruption to disciplined adaptation. Leaders like Revolut and WeBank are profitable and evolving into full-fledged financial platforms. Yet, replacing traditional banks outright remains unlikely. Incumbents retain advantages in scale, balance sheet strength, and regulatory certainty.

The most promising path forward? 

Hybridisation : merging the digital agility of neobanks with the stability and depth of established banks.

For investors and clients, the message is clear: neobanks have rewritten the rules of engagement in finance. But in the long run, the winners won’t just be the ones who grew fastest. They will be the ones who can scale trust as quickly as they scaled technology.

Source: Customer base of the largest neobanks, Multiples.vc