Revolut staff share in $500m windfall
Employees at Revolut are set to share a $500 million windfall by selling stock in the financial technology company in a deal that values the business at $45 billion.
The shares sale burnishes Revolut’s reputation as the crown jewel of Britain’s financial technology sector by boosting its valuation from the $33 billion figure placed on the group during a fundraising exercise three years ago.
It also allows staff at the London-based company, which recently obtained a UK banking licence, to crystallise gains they have enjoyed from its rapid growth. Only existing employees of the privately owned Revolut who have been with the business for at least a year are being allowed to sell shares as part of the transaction.
More than 10,000 people worldwide work for the business, including 1,300 in Britain, but it is unknown how many are selling shares as part of the deal or whether its co-founders Nik Storonsky, its chief executive, and Vlad Yatsenko, its chief technology officer, are offloading stock. Coatue and D1 Capital Partners, both new backers, are investing in Revolut through the transaction, as is Tiger Global, an existing backer.
“We’re delighted to provide the opportunity to our employees to realise the benefits of the company’s collective success,” Storonsky, 40, said.
The higher price tag placed on Revolut by the shares sale is a coup for the group as it confounds falling valuations in the wider financial technology industry. Low interest rates had helped to push up the valuations of young technology-focused companies, but the sharp rise in borrowing costs since the end of 2021 has put them under pressure. Klarna, the Swedish “buy now, pay later” lender, was valued at $45.6 billion in June 2021, but this was slashed to $6.7 billion by July the following year.
Revolut’s valuation has been bolstered by its swift expansion. Founded in 2015 as a foreign exchange and money transfer business, it is now a sprawling financial services group, offering everything from share trading to savings products through its app. It also lends to customers in Europe through a banking licence granted by the Bank of Lithuania. The company has more than 45 million customers globally and generated pre-tax profits of £437.8 million last year on revenues of £1.8 billion.
It is poised to grow further after last month finally clinching a banking licence from British regulators, which it had been seeking for three years. This will allow Revolut to start lending in the UK, its home market, and to directly challenge high street banks, as well as helping the business to expand further overseas.
The company is expected eventually to pursue a stock market flotation, although it is believed to be leaning towards a listing in New York rather than London. This would be a big blow to the City and the Financial Times has reported that the government will try to convince Revolut to list in the City when Tulip Siddiq, the City minister, meets its bosses this year.
