Revolut sees $15bn wiped out from its valuation after Schroders’ writedown
Revolut sees $15 billion wiped out by Schroders write-off as fintech firm waits for banking license
- Schroders Capital Global Innovation Trust devalued its stake by 46%
- It said it was ‘trading cautiously given the challenging market conditions’
- Schroders’ write-down implies a similar devaluation of Revolut, now worth $17.7 billion compared to $33 billion in July 2021
The valuation of payment app Revolut has fallen by about $15 billion due to a large write-down by Schroders, one of its major investors.
The renamed Schroders Capital Global Innovation Trust – formerly Schroder UK Public Private Trust and before that Woodford Patient Capital Trust – devalued its investment in the fintech company by 46 percent.
The trust said its stake in Revolut was worth £5.4m at the end of last year, up from £10.1m at the end of 2021.
Downgrade: Revolut is now valued at around $18 billion, down from $33 billion in July 2021
This implies that Revolut, which is still awaiting a banking license, is now valued at around $17.7 billion, down from the $33 billion implied by a July 2021 capital raise.
In a regulatory filing, Schroders said it was “trading cautiously given the challenging market environment” as investors reassess financial technology stocks amid the current turmoil.
Schroders’ move comes less than two months after Revolut reported its first-ever profit of £26m for 2021, as revenue tripled to £636m amid the cryptocurrency boom.
But those results were released after months of delays, missing a December 31 deadline.
Accountant BDO said shortly afterwards that £477m in revenue – about three-quarters of turnover – could not be verified and may have been reported incorrectly.
But Revolut claimed the numbers were accurate, even hiring lawyers to insist that BDO’s opinion confirmed that “the financial statements give a true and fair view” of the company’s business.
The company, led by Nikolay Storonsky, is also awaiting a British banking license.
That’s despite finance chief Mikko Salovaara claiming the license was “imminent” when the company released its delayed full-year results on March 1.
Revolut has attempted to pave the way for a license by appointing City greats to its board, including Martin Gilbert, the former head of investment management company Standard Life Aberdeen, who is chairman.
Founded in 2015, the privately held company has quickly grown to become one of Europe’s most valuable technology companies.
Described by Chancellor Jeremy Hunt in January as “a shining example from our global fintech sector,” it reached a $33 billion valuation in July 2021 when it raised $800 million from investors including Softbank and Tiger Global Management.
A Revolut spokesperson said: The times: ‘We don’t speculate on our valuation.
“Since our last round of funding, in which we were valued at $33 billion, Revolut has continued to perform strongly in all of its markets, continued to hire and expand, and reported its first full year of profitability.”