Three people familiar with the plans say that UK fintech Revolut aims to sell shares at a valuation of more than $40 billion, which would cement it as Europe’s top start-up.
People familiar with the matter said that SoftBank, a company owned by Morgan Stanley, is selling existing shares worth about $500mn, including those of employees.
Revolut’s valuation of $33bn in 2021 was at least 20% higher. This would be more than the $33bn valuation Revolut achieved in a 2021 fundraising.
If achieved, the ambitious target would be a defiant response to the difficult market conditions that European fintech companies have faced in recent years. Klarna in Stockholm, another notable fintech, saw their valuation drop to $6.7bn, from $46bn, during a fundraising for 2022. Since , some venture capitalists have marked their stakes in Revolut.
The UK start up is also still uncertain about the fate of their application for a UK Banking Licence, which they first submitted over three years ago. The fintech needs a banking license to increase lending and profits in its largest market. Regulators have been unable to move forward as Revolut has faced a number of problems, including auditors warning that they couldn’t verify revenue figures for its 2021 accounts.
In its latest set of delayed results for 2022, the company has slipped into a loss as the boom in cryptocurrency trading which had previously boosted profits has slowed down. Increasing costs have offset the gains from increased customer deposits and rates.
Revolut, founded in 2015 by Nikolay Storonsky & Vlad Yatsenko at the same time that UK challenger banks like Monzo & Starling were being launched, was founded around the same period as these UK challengers. Since then, it has outpaced competitors in terms of growth in customers and pursued aggressive international expansion.
Revolut is a global company with 40mn clients, including a third in the UK. Starling and Monzo are both regulated as banks and have less than 10mn each customers. They only operate in the UK.
Tiger Global Management and SoftBank Vision Fund 2 raised $800mn in 2021.
The company expects revenues to rise to £1.7bn by 2023 from £923mn last year with a “double-digit net profit margin.”
Revolut has moved its headquarters to one of London’s most prominent financial districts, Canary Wharf.
Fintech is also backed by TCV, Balderton Capital Ribbit Capital, and Molten Ventures.
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