Revolut Investor cuts book value by 40%

Molten Ventures, a venture capital firm, has reduced the value of its stakes in Revolut. It is the second investor who has done so. The UK fintech company is awaiting a decision from regulators on whether it will be granted a banking license in its own market.

Molten Ventures (formerly Draper Esprit) invested £7.1mn into the fintech sector in 2018. It said in its annual report released on Thursday that it had reduced the value of its investments by 40% to £54.5mn for the year ending March 31.

This follows the announcement in April by Schroders that they had reduced their stake in Revolut from £5.4mn to £5.4mn on December 31, 2022. That’s a 46 percent decrease year-on-year.

Revolut’s value was last estimated by investors at $ 33 billion in July 20,21. This makes it the UK’s largest private tech group, before is valued at $40 billion in January 2022.

Fintechs have been waiting since January 2021 for UK regulators’ approval to obtain a banking license. This process normally takes less than one year. In December 2021, it received its European Banking Licence in Lithuania.

In May, Nik Storonsky, the chief executive of the company, said that the banking crises had caused regulators to be ” extra careful”, and that this was the reason for the delays in the license.

The year was a difficult one for BDO. Its audit stated that it could not verify fully two-thirds of its revenue.

In 2020, its risk management system and compliance was reviewed. It had previously been questioned about its corporate culture.

Molten Ventures made its decision based on industry guidelines that consider factors like revenue multiples, rather than concerns about the license or other issues.

Revolut and Molten Ventures have declined to comment.

Investors have become more cautious in their allocation of funds after rising inflation and a decline in consumer sentiment. Tech companies who had soared to incredible valuations when the coronavirus epidemic was raging, and rates were low, are now paying the price.

Klarna (the Swedish payments company) was forced to reduce its price from $47bn down to less than $7bn during a private financing round in July last year. Fintechs listed on Nasdaq have also been hit, with Affirm’s share price down by more than 85% since its January 2021 debut.