Revolut CEO to Sell Significant Stake Amidst $40 Billion Valuation Aspirations

Nik Storonsky, the founder and CEO of Revolut, is set to divest "tens or even hundreds of millions of dollars" of his stake in the fintech firm in the upcoming secondary share sale, according to a recent report by Sky News. The precise amount of his stake dilution remains uncertain and will largely depend on the valuation the company achieves. Currently, the exact shareholding of Storonsky in the company is also undisclosed.

Aiming for a $40 Billion Valuation

In a bid to organize this secondary share sale, Revolut has engaged Morgan Stanley and is aiming for a valuation of $40 billion, as per another Sky News report. This anticipated valuation significantly surpasses the company's previous valuation of $33 billion during its last funding round in 2021, a figure that established Revolut as the largest fintech in Europe. Should the $40 billion valuation materialize, Revolut would surpass the market capitalisation of major banks such as Barclays, NatWest, and Deutsche Bank.

However, it is important to note that Revolut itself will not raise any proceeds from the upcoming sale. Instead, this opportunity is intended for employees to sell their stakes to new investors, thereby allowing them to liquidate part of their holdings.

Record Performance and Global Reach

Founded in 2015 as a challenger bank, Revolut generates revenue through payments, subscriptions, and customer trading activities involving stocks and cryptocurrencies. The fintech has recently expanded its offerings by including a variety of trading instruments such as contracts for differences and bonds through third-party integrations.

Currently, the platform boasts over 40 million customers globally, with a third of them based in the UK. This number far exceeds the customer bases of its UK competitors, Monzo and Starling, which each have fewer than 10 million customers. Revolut operates with a Lithuanian banking license across Europe and has recently obtained a similar license in Mexico, along with a payment license in India.

In 2023, Revolut's revenue soared by 95 percent to £1.8 billion, and it achieved a pre-tax profit of £438 million. Despite these impressive figures, the company is still awaiting approval for a UK banking license, for which it applied in 2021.

As Revolut navigates these developments, the secondary share sale and the prospective $40 billion valuation mark significant milestones in its growth trajectory. The outcome of this sale and the company’s ability to secure its UK banking license will be closely watched by industry observers and investors alike.