- Revolut plans £400M employee share sale with Morgan Stanley
- CEO seeks to maintain $33B valuation from 2021 funding
- UK banking license approval still pending after three years
Revolut, the most valuable fintech company in the United Kingdom, has arranged for Morgan Stanley to facilitate the sale of shares valued at up to £400 million.
The highest-ranking fintech company in the United Kingdom, Revolut, is currently formulating strategies to permit its employees to profit from the transfer of stock worth hundreds of millions of pounds.
The payments and banking services provider is assembling investment financiers to oversee the sale of secondary shares valued at approximately $500 million (£394 million).
We anticipate retaining Wall Street bank Morgan Stanley to assist with the proposed stock offering later this year.
This past weekend, city sources reported that Nik Storonsky, co-founder and CEO of Revolut, was adamant about obtaining at least a valuation equal to the $33 billion (£26 billion) it raised in primary funding in 2021.
“This will not be a downturn,” said an individual with knowledge of Revolut’s strategy.
The entire global fintech industry will continue to scrutinize any significant share transfer, even though the transaction does not involve the fintech raising additional capital.
We anticipate that restrictions will only apply to organization personnel.
Revolut, one of the largest financial technology companies globally, experienced a nearly twofold increase in revenue to approximately £1.7 billion in the previous year, according to data that is anticipated to be disclosed in the coming months.
Established in 2015, the organization has encountered a series of regulatory and compliance obstacles, as evidenced by reports from the previous year that emphasized its withdrawal of funds from suspicious accounts identified by the National Crime Agency.
The organization has experienced exponential expansion, with customer numbers skyrocketing from 16.4 million at the time of Series E funding almost three years ago.
According to industry insiders, Revolut’s consistent growth would more than suffice to maintain its position as the most valuable fintech company in the United Kingdom, notwithstanding the prolonged decline in tech valuations that has occurred over the past two years.
A Singaporean sovereign wealth fund and an arm of Alphabet, the parent company of Google, supported Monzo, a digital bank with its headquarters in the United Kingdom, in the conclusion of a nearly £500 million funding round.
On the other hand, the funding environment in other regions has worsened, with a growing number of technology firms struggling to survive, previously valued at more than $1 billion per unicorn.
As part of their compensation arrangements, Revolut has granted stock options to a significant number of its 10,000 employees. However, the precise number of individuals who would be eligible to sell equity in the upcoming transaction later this year remained uncertain.
According to a close associate of the organization, it has received a multitude of expressions of interest from potential investors.
Currently, Tiger Global and SoftBank’s Vision Fund are Revolut’s shareholders.
When news of the proposed share sale breaks, investors in Revolut are currently anticipating favorable developments regarding the company’s application for a banking license in the United Kingdom.
Since submitting its application to become a bank in the United Kingdom over three years ago, the company has been unable to obtain regulatory sanction.
Mr. Storonsky, who was publicly critical of the delay, questioned the approach of British regulators and legislators last year when he stated that he would not consider a London Stock Exchange listing.
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Although an initial public offering of Revolut seems unlikely, the company commencing the listing process within the next couple of years would not come as a surprise to investors or industry peers.
A source with knowledge of Revolut stated that board members were anticipated to be among those who purchased secondary shares; however, additional information remained vague over the weekend.
Martin Gilbert, the organisation’s chairman, is a City veteran who oversaw Assetco, a London-listed asset manager, where he encountered governance and performance issues.
Michael Sherwood, a former Goldman Sachs executive who was jointly responsible for the firm’s operations outside the United States and was considered one of the most accomplished traders of his generation, is among its other directors.
An external company shareholder stated that some investors might criticize the exclusion of non-employees from the transaction.
Revolut has previously conducted this type of secondary share sale, including following its 2021 Series E round.
