British fintech firm Revolut has reached a significant milestone, securing a $45 billion valuation in its latest secondary share sale, a move that positions the startup ahead of some of Europe's largest traditional banks. This new valuation marks a sharp increase from the $33 billion the company was valued at in July 2021, reflecting its rapid growth and increasing dominance in the fintech sector.
The share sale, which was led by investment heavyweights Coatue, D1 Capital Partners, and existing investor Tiger Global, allows current Revolut employees to cash out some of their shares. While the total value of the shares on sale was not disclosed, the transaction underscores investor confidence in Revolut's business model and future prospects.
"This valuation reflects the strong financial performance recorded by the company in recent quarters as well as the progress made in executing its strategic objectives," Revolut said in a statement. The company's CEO, Nikolay Storonsky, expressed his enthusiasm for the new valuation, stating, "We're delighted to provide the opportunity to our employees to realize the benefits of the company's collective success. We're also excited to partner with several new investors who share our vision as we continue our journey to redefine the banking landscape as we've known it."
Revolut's recent success is further bolstered by the granting of a U.K. banking license, which came after a three-year wait and allows the company to take customer deposits and issue products such as loans and credit cards. This license is a significant step forward for Revolut, enabling it to build up its banking infrastructure in the U.K. and further challenge traditional banks on their home turf.
Founded in 2015 by Nikolay Storonsky, Revolut has grown rapidly, now boasting 45 million customers worldwide. The company reported a record pre-tax profit of £438 million ($564 million) in 2023, underscoring its strong financial footing. Investors are betting on Revolut's continued growth and its ability to lure customers away from traditional banks with its app-based services, which operate without the cost burden of maintaining a network of physical branches.
The $45 billion valuation not only cements Revolut's position as one of Europe's most valuable fintechs but also places it ahead of established financial institutions like France's Societe Generale, which has a market capitalization of $19 billion, and the U.K.'s Barclays, valued at $43 billion. Traditional European banks have struggled with years of weak profitability and stringent regulations, making it difficult for them to compete with the rapid growth and technological innovation seen in fintech firms like Revolut.
Despite its impressive valuation and growth, Revolut has not yet set a timeline for a public listing. The company has previously indicated plans to go public, but interim Chief Financial Officer Victor Stinga declined to comment on the timing of an IPO during discussions in July. The lack of a clear IPO timeline has not dampened investor enthusiasm, as the company continues to demonstrate strong performance and market potential.
Revolut's recent share sale has also sparked speculation about whether CEO Storonsky has reduced his stake in the company. While Revolut declined to comment on whether any existing investors had reduced their positions or whether Storonsky had cashed in part of his multibillion-dollar stake, reports suggest that Storonsky might have sold part of his holdings, with the sale size previously reported as $500 million.
Philippe Laffont, founder and portfolio manager at Coatue, praised Revolut's achievements, stating, "Revolut has an impressive product suite that meets the needs of its rapidly growing customer base and is helping to transform the global banking industry." As Revolut continues to expand its offerings and consolidate its position in the fintech sector, its latest valuation highlights the growing influence of digital-first financial services in reshaping the global banking landscape.
