Revolut, a British-based fintech company, is in talks with Tiger Global Management, one of the world’s most prolific investors in technology companies, to lead a new investment round. Sources close to the matter have revealed that Tiger Global is one of several parties interested in acquiring more shares in Revolut.
Tiger Global is no stranger to the tech industry, with investments in big names like Facebook-owner Meta, Microsoft, and Nvidia. In 2021, they jointly led Revolut’s primary funding round of $800 million. However, this latest deal will not involve the issuance of new shares, but rather a secondary offering, where many of the digital bank’s employees will be selling their existing holdings.
Last week, it was reported that Revolut’s chief executive, Nik Storonsky, plans to offload stock worth tens or even hundreds of millions of dollars in this deal. It is also unlikely that SoftBank, who led the 2021 round, will participate in this latest process.
Revolut is hoping to achieve a valuation of at least $40 billion, with sources suggesting it could potentially reach $45 billion. It was previously reported that the company had hired Morgan Stanley to organize the secondary share sale, with a minimum valuation of $33 billion, the same as the primary funding round in 2021.
Although Revolut is not looking to raise new capital in this transaction, it will still be closely monitored by the global fintech sector. The company, which boasts over 40 million customers, recently revealed record earnings of £438 million in 2020, with revenues nearly doubling to £1.8 billion.
Founded in 2015, Revolut has faced several regulatory and compliance challenges, including releasing funds from accounts flagged by the National Crime Agency as suspicious. However, its growth has been impressive, with customer numbers skyrocketing from 16.4 million in 2018 to over 40 million today.
Insiders believe that despite the downturn in tech valuations over the past two years, Revolut’s rapid expansion justifies its position as Britain’s most valuable fintech company. In comparison, Monzo, a UK-based digital bank, recently confirmed that it had closed a funding round worth nearly £500 million, with backing from Google’s owner, Alphabet, and a Singaporean sovereign wealth fund.
However, the funding landscape has not been as promising for other tech companies, with many struggling to stay afloat despite having previously achieved unicorn valuations of over $1 billion.
Revolut has allotted stock options to many of its 10,000 employees as part of their compensation packages. It is unclear how many employees will be eligible to sell their equity in this transaction.
The proposed share sale comes as Revolut’s investors eagerly await news about the company’s application for a UK banking licence. Revolut applied for a banking licence in Britain over three years ago but has yet to receive approval. Insiders believe that a positive outcome could be announced soon.
Revolut’s CEO, Mr. Storonsky, has been publicly critical of the delay and questioned the approach of British regulators and politicians last year. He even suggested that the company would not consider a listing on the London Stock Exchange.
It has been reported that other board members, including chairman Martin Gilbert, a City veteran, and director Michael Sherwood, a former Goldman Sachs executive, may also participate in the secondary share sale.
Neither Revolut nor Tiger Global have commented on the matter.
