Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Revolut has secured a $45bn valuation in a share sale by employees, defying a wider fintech downturn and cementing its status as Europe’s most valuable start-up as the UK government seeks to convince it to list in London rather than New York.
The UK company said on Friday that Coatue, D1 Capital Partners and Tiger Global were among the institutional investors who bought shares from staff. They acquired about $500mn worth, a person familiar with the transaction added.
“We’re delighted to provide the opportunity to our employees to realise the benefits of the company’s collective success,” said chief executive Nikolay Storonsky.
The valuation is higher than the $33bn Revolut achieved in a 2021 fundraising led by SoftBank and Tiger Global and makes Revolut the UK’s second-most valuable bank — behind only HSBC and ahead of Barclays, Lloyds Banking Group and NatWest.
It comes shortly after Revolut secured a highly anticipated banking licence this summer and will make Revolut’s initial public offering even more sought-after by global stock exchanges. The UK Treasury has planned talks with the company in the autumn in a bid to convince it to choose a listing in London over New York.
According to one person with direct knowledge of the assessment, the fintech continues to favour a potential float on the Nasdaq.
In a sign of Revolut’s coveted status, the New York Stock Exchange welcomed the news of its regulatory approval with a Times Square billboard earlier this month that read “NYSE congratulates Revolut on securing its UK banking licence”.
The latest valuation also confirms Revolut’s top place among European tech start-ups, exceeding that of rivals Checkout.com and Klarna, both of which suffered from a tech rout in recent years. Klarna’s valuation dwindled from $46bn to less than $7bn in a 2022 fundraise, while Checkout cut its internal valuation to $11bn the same year, having previously secured a $40bn valuation from investors.
However, the new price tag remains below that of US growth companies in the sector including Stripe, which was last valued at $65bn, and US-listed Brazilian digital bank Nubank, which has a market capitalisation of $66bn.
Revolut co-founders Storonsky and Vlad Yatsenko told media last year, when the fintech was still in regulatory limbo, that they would prefer to keep the company in private hands but that in the event of a flotation they would be likely to choose New York.
The London stock exchange “is much less liquid so I just don’t see the point”, Storonsky said at the time.
The share sale values Storonsky’s personal stake in the company at almost $8bn, based on an FT analysis of public documents from last August. Chair Martin Gilbert’s holding could be worth more than $850,000. Revolut declined to comment on the figures.
Revolut was awarded a UK banking licence last month, ending more than three years of wrangling with regulators and paving the way for the company to expand in its domestic market.
Despite its prolonged wait for a UK licence, Revolut already has more than 45mn customers globally including roughly 9mn in the UK, where it was founded in 2015.
Revolut already has a European banking licence from authorities in Lithuania and was granted one in Mexico this year.
However, securing the coveted UK licence has been seen as a vote of confidence that will boost Revolut’s chances of becoming regulated as a bank in other markets such as the US.
Coatue founder Philippe Laffont said he had “a high level of conviction in Revolut’s mission to democratise access to financial services globally”, and praised Revolut’s “proven ability to scale across dozens of markets”.
SoftBank, one of the lead investors in Revolut’s previous fundraise, did not participate in the latest sale. The Japanese investor was forced to give up its priority class of shares for Revolut to meet regulatory requirements for a UK banking licence.
Revolut has pursued an aggressive international expansion strategy and its customer numbers now dwarf those of UK peers Monzo and Starling. The company last month said it had made a pre-tax profit of £438mn in 2023, up from a loss of £25mn the previous year, while its revenues almost doubled to £1.8bn.
Employees who have been at Revolut for at least a year and are not on gardening leave were eligible to sell 20 per cent of their vested share options at a price of $865.42 a share in the sale. Unlike with previous sales, former employees were ineligible.
Additional reporting by Jennifer Hughes in New York