Revolut share: The fintech unicorn and its IPO plans

Summary

  • Revolut’s valuation has been pushed up to £24 billion in a fresh round of funding.
  • Revolut’s valuation is worth more than the market capitalisation of 294-year-old mainstream lender NatWest.
  • The startup has also entered in the crypto-currency market and offering crypto trading services on its app.

Revolut’s valuation has touched £24 billion in a fresh round of funding, making it the most valuable fintech firm in the UK. Following the news, the company’s chief financial officer Mikko Salovaara has not ruled out the possibilities of rolling out Revolut IPO soon, which will be its next big step in terms of expansion.

The London-based digital banking and payment start-up has become the most valuable British private fintech company ever on record after raising around £579 million (US $800m) in a new fundraising led by SoftBank’s Vision Fund and Tiger Global management.

Is Revolut listed on the stock market?

 

Revolut has not yet been listed on the stock markets yet but an increase in its valuation would be the first step towards a listing.

Revolut’s valuation is worth more than the market capitalisation of 294-year-old mainstream lender NatWest with a market capitalization of £23.6bn. The exceptional valuation mean the six year old company is worth more than three- quarters of the members of the FTSE 100 stock market Index.

Founded in 2015 by the former Lehman Brother trader Nik Storonsky as a pre-paid card focused on offering free currency exchange to customer, Revolut announced on Thursday that it has raised £579m ($800m) from its fresh investors SoftBank, a major Japanese investment group, and US investment firm Tiger Global Management. SoftBank holds around 5% in the business.

Revolut’s IPO plans

 

CFO Salovaara said that the company did not have any immediate plan for an IPO as it has just raised a significant funding. Though he did not dismiss an IPO later this year.

Since Revolut was founded, it has operations in over 34 countries and has added business accounts, investments, and wage advance to its financial services.

In recent years, Revolut has expanded its global presence by pushing into markets including Australia, US, and Japan.

The startup has also entered in the crypto-currency market and offering crypto trading services on its app. Analysts believe that cryptocurrency market’s growing popularity and Revolut’s entry into the crypto market will enhance its success.

Revolut Share Price

Revolut’s share price range would be revealed in the IPO prospectus when the company goes public. Nothing is known in that front as of now.

Last year, Revolut valuation was at US $5.5bn and it increased six times to US $33bn.  

Revolut also announced recently that it nearly doubled losses last year to £208 million came despite a 34% jump in revenue to £222m, the losses last year led to decrease its valuation to US $4 billion from US $5.5 billion. The company insisted that it is on the way to profitability and has come out of losses in November and December last year, which was driven by strong demand for crypto trading services that make up about 15-20% of its total income. 

The funding has made Storonsky, a paper billionaire several times over. According to companies House, Storonsky held a stake of more than 25% in the fintech unicorn before the most recent funding round, which also increased the value of shares held by its 2,200 employees through its equity participation plan.

All this came after few days when, the British forex transfer and payment company Wise got listed on the London Stock Exchange with £8.75bn valuation.

In a statement, Storonsky said: “The valuation was an endorsement of our mission to create a global financial super app that enables customers to manage all their financial needs through a single platform.”

CFO Salovaara said that the company has no immediate plans to launch an initial public offering but it will eventually list its shares on the stock market with much higher valuations.

The company also holds an EU banking licence and still waiting for approval in the UK that will allow it to take deposits in its home market. On the same front, UK Finance Minister Rishi Sunak is also keen on growing the UK’s fintech sector and is pushing to introduce changes that would make the UK more attractive for startups and growing companies.

Reacting on the development, Sunak said it’s great that Revolut has raised a further US $800m and plans to expand even further which will create more jobs in the UK. He added he wants to see more such fintech success stories in Britain.

Expansion Plans

The company has more than 16 million customers and aims to create a global financial super app that enables customers to manage all their financial needs through a single platform.

Its ongoing product innovation is aimed at meeting customers’ everyday financial needs from quick and easy global transfer to managing everything from savings to insurance, to democratising wealth and trading.

Revolut also plans to use the fund raised to invest in product development and marketing to expand into the Indian and US markets and other international market.

The company wants its global super app to offer customers 10 times better value, services, and security that no one can offer by building a full financial product suite in a single app. Further, the company plans to offer services which will be increasingly personalised as per customers’ daily needs with low and transparent fees.  

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