Employees of fintech giant Revolut will profit from US$500 million share sale | Business News

Bosses at Revolut, Britain’s biggest fintech, are drawing up plans to allow employees to profit from the sale of shares worth hundreds of millions of pounds.

Sky News has learned that the banking and payments services provider is recruiting investment bankers to coordinate a secondary share sale worth around $500 million (£394 million).

Morgan Stanley, the Wall Street bank, is expected to be hired to work on the proposed stock offering, which will take place later this year.

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City sources said this weekend that Nik Storonsky, Revolut’s co-founder and chief executive, was determined to seek a valuation of at least the $33bn (£26bn) he secured in a 2021 primary funding round.

“This will not be a negative round,” said a person familiar with Revolut’s thinking.

Although the fintech, which has more than 40 million customers, is not planning to raise new capital as part of the transaction, any sizeable share sale will still be closely watched across the global fintech sector.

The expectation is that it will be restricted to company employees.

Revolut is among the world’s biggest financial technology companies, with revenues roughly doubling last year to around £1.7 billion, according to figures expected to be published in the coming months.

Founded in 2015, it has faced a number of regulatory and compliance challenges, with reports last year highlighting the release of funds from accounts flagged by the National Crime Agency as suspicious.

The company’s growth has occurred at breakneck speed, with customer numbers rising from 16.4 million at the time of its Series E fundraising almost three years ago.

Insiders argued that despite the prolonged slowdown in tech valuations over the past two years, Revolut’s relentless expansion would easily justify maintaining its status as Britain’s most valuable fintech.

Monzo, the UK-based digital bank, recently confirmed a Sky News story that it had closed a funding round worth nearly £500 million, including backing from an arm of Google owner Alphabet and an Singapore sovereign wealth fund.

Elsewhere, however, the funding picture has been bleaker, with a growing number of technology companies that have attracted unicorn valuations of over a billion dollars now struggling to stay afloat.

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Revolut has awarded share options to many of its 10,000 employees as part of their remuneration packages, although it is unclear how many would be eligible to divest equity in the transaction later this year.

A source close to the company said it had received numerous expressions of interest from potential investors.

Revolut’s current shareholders include SoftBank’s Vision Fund and Tiger Global.

News of the proposed share sale comes as Revolut investors continue to await positive news on its UK banking license application.

The company applied to regulators to become a bank in Britain more than three years ago but has so far failed to win approval.

Storonsky has publicly criticized the delay and last year questioned the approach of British regulators and politicians by suggesting he would not contemplate a listing on the London Stock Exchange.

An initial public offering for Revolut appears to still be some way off, although it wouldn’t surprise investors or industry peers if it began a listing process in the next few years.

A person close to Revolut said board members were among those expected to participate in the secondary share sale, although further details were unclear this weekend.

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The company is chaired by Martin Gilbert, the City veteran who faced governance and performance challenges at Assetco, the London-listed asset manager he runs.

Its other directors include Michael Sherwood, the former Goldman Sachs executive who was co-responsible for its operations outside the US and who was considered one of the most skilled traders of his generation.

An external shareholder at the company said the exclusion of non-employees from the deal could draw criticism from some investors.

Revolut has conducted secondary share sales of this type in the past, including after its 2021 Series E round.

This weekend, Revolut declined to comment.