- Deal allows employees to cash in on some of their holdings by selling shares
- Granting of UK banking licence paves way for a stock market flotation
- City minister wants bosses to list in London rather than New York
Revolut has been valued at £35billion – higher than established High Street banks Barclays and NatWest – in a share sale which cements its position as Europe’s most valuable start-up.
The long-anticipated deal allows employees to cash in on some of their holdings by selling stock to new and existing investors.
A few weeks ago, the fintech firm was finally granted a UK banking licence after a three-year wait – paving the way for a stock market flotation.
Yesterday, it also emerged that Labour’s new City minister Tulip Siddiq will meet Revolut executives later this year to try to persuade them to list in London rather than New York – with its founders previously expressing a preference for the US.
The latest share sale steps up Revolut’s valuation from a previous funding round in 2021, which put it at £26billion.
Banking big league: Revolut co-founder Nikolay Storonsky
It means the company, founded in 2015, is worth more than Barclays, which is worth £33.5billion, Natwest (£30billion) and Standard Chartered (£19.5billion).
The firm is almost on a par with £36bn Lloyds Banking Group although it is dwarfed by globetrotting HSBC, Europe’s biggest lender, which is valued at £121billion.
The fintech business’s share sale will see an undisclosed number of the company’s 10,000 global employees – who all receive equity as part of their pay packages – sell just under £400m worth of shares amounting to around 11 per cent of its stock.
Chief executive and co-founder Nikolay Storonsky said: ‘We’re delighted to provide the opportunity to our employees to realise the benefits of the company’s collective success.
‘It’s their hard work, innovation, and dedication that has driven us to become 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.
Revolut said it reflected the company’s ‘strong financial performance’ and progress towards meeting its strategic goals – adding that it remains on course to surpass 50m global customers by the end of this year.
Earlier this year, the company reported pre-tax profits of £438m for 2023, up from a loss of £25m a year earlier as revenues nearly doubled. Revolut said revenues in the first half of this year were up by more than 80 per cent and it was seeing improved profitability.
The share sale marks another positive step for the company after its prolonged attempts to obtain a UK banking licence left investors impatient.
That process ran into trouble when auditors said last year that they could not verify the fintech company’s delayed 2021 accounts.
The delays prompted Russian-born Storonsky, 40, to slam regulators for the ‘long and tiring’ saga and attack the UK as a place to do business.
But Revolut was able to draw a line under the saga when last month it secured a banking licence ‘with restrictions’ from the Prudential Regulation Authority (PRA), the Bank of England’s regulatory arm. The licence will ultimately mean Revolut can hold customer deposits and offer new products such as credit cards, personal loans or mortgages. This will allow it to compete with more established banks.
However, nothing has changed for UK customers yet, as the company must complete its ‘mobilisation’ stage – which could take up to a year.
The firm offers payment services and the ability to trade stocks and cryptocurrencies.
It holds a banking licence in Europe after being approved by authorities in Lithuania.
The fintech group has 9m UK customers and more than 45m around the world.
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