Revolut valued at £35bn in share sale
- Deal allows employees to cash out some of their assets by selling shares
- Granting of UK banking licence clears way for IPO
- City minister wants bosses to list in London instead of New York
Revolut has been valued at £35 billion, more than established banks Barclays and NatWest, following a share sale that cements the company’s position as Europe’s most valuable start-up.
The long-awaited deal offers employees the opportunity to cash out some of their shares by selling them to new and existing investors.
A few weeks ago, after a three-year wait, the fintech company finally received a UK banking license, clearing the way for an IPO.
It was also revealed yesterday that new Labour minister Tulip Siddiq will meet Revolut executives later this year to try to persuade them to list in London rather than New York. The founders have previously expressed a preference for the US.
The latest share sale increases Revolut’s valuation from a previous funding round in 2021, which was put at £26 billion.
Big Banking Competition: Revolut Founder Nikolay Storonsky
That means the company, founded in 2015, is worth more than Barclays (£33.5bn), Natwest (£30bn) and Standard Chartered (£19.5bn).
The company is almost on a par with Lloyds Banking Group (£36bn), but is dwarfed by globetrotting HSBC, Europe’s largest lender, estimated to be worth £121bn.
The sale of the fintech company’s shares will see an undisclosed number of the company’s 10,000 global employees (all of whom receive shares as part of their salary package) sell just under £400 million worth of shares, representing around 11 percent of the total share capital.
CEO and Co-Founder Nikolay Storonsky said: “We are proud to offer our employees the opportunity to experience the benefits of the company’s collective success.
“Their hard work, innovation and dedication have made us the most valuable private technology company in Europe.” The fundraising was led by existing investor Tiger Global and new investors Coatue and D1 Capital Partners.
According to Revolut, it reflects the company’s “strong financial performance” and progress towards its strategic goals, and the company remains on track to surpass 50 million customers globally by the end of this year.
Earlier this year, the company reported pre-tax profits of £438 million for 2023, up from a loss of £25 million a year earlier as revenue nearly doubled. Revolut said revenue grew by more than 80 percent in the first half of this year and that it was seeing improved profitability.
The share sale is another positive step for the company, after prolonged efforts to obtain a UK banking license left investors impatient.
That process ran into problems when accountants reported last year that they were unable to verify the fintech company’s delayed 2021 annual accounts.
The delays prompted the 40-year-old Russian-born Storonsky to criticise regulators for the “long and tiresome” saga and attack the UK as a place to do business.
But Revolut was able to draw a line under the saga last month when it was granted a “limited” banking licence by the Prudential Regulation Authority (PRA), the regulatory arm of the Bank of England. The licence will ultimately allow Revolut to hold customer deposits and offer new products such as credit cards, personal loans or mortgages, allowing it to compete with more established banks.
However, nothing has changed for UK customers yet as the company needs to complete the ‘mobilisation phase’, which could take up to a year.
The company offers payment services and the ability to trade stocks and cryptocurrencies.
The company has a banking license in Europe, after receiving approval from authorities in Lithuania.
The fintech group has 9 million customers in the UK and more than 45 million globally.
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