Fintech company Revolut is targeting a $40 billion valuation in a move that could boost its value by 20%. The London-based startup wants to sell shares to cement its status as Europe’s most valuable startup.
KEY FACTS
- The SoftBank-backed company wants to sell existing shares worth about $500 million, including those owned by employees, the Financial Times wrote.
- The bank is working with Morgan Stanley on the sale.
ACCENT
The news comes amid challenges Revolut is trying to address. First of all, the startup is struggling to get a banking license, and it also reported some losses. The entire fintech sector has suffered defeats in the last two years. Stockholm-based Klarna, another prominent fintech, has sunk to $6.7 billion from a $46 billion fundraising in 2022. Since then, some venture capital investors have reduced their stakes in Revolut.
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WHAT TO WATCH FOR
Revolut is still trying to get a banking license, which is key for the fintech company to increase lending and profits. However, regulators delayed their decision after Revolut was rocked by problems, including a warning from auditors that they could not fully verify the revenue figures in the 2021 accounts.
The company suffered a loss in its latest delayed report for 2022 as the boom in cryptocurrency trading that previously boosted profits waned. Meanwhile, rising costs offset the benefits of larger customer deposits and higher interest rates.
BIG NUMBER
In 2021, the company was valued at $33 billion in a funding round. The stock transaction could now fetch a significantly higher valuation of $40 billion. That would surpass the market capitalization of British lender NatWest and Paris-based Société Générale.
KEY STORY
Revolut was founded by Nikolay Storonsky and Vlad Yatsenko in 2015. Since then, it has significantly outpaced its competitors in terms of customer growth and aggressive international expansion. Revolut has around 40 million customers worldwide, with a third based in the UK.
In 2021, it raised $800 million from investors including SoftBank’s Vision Fund 2 and Tiger Global Management.
