Revolut seeking share sale to bring valuation above $40bn

credit: Shutterstock
credit: Shutterstock

Revolut is reportedly setting to become Europe’s most valuable startup after the UK fintech announced plans for a share sale that would see its valuation surpass $40bn. 

The Financial Times reports that the digital bank is currently working with Morgan Stanley to sell $500m worth of shares that would see Revolut increase its valuation by 20% from the $33bn it was valued at after a 2021 funding round. 

Employee shares will be sold to make up the $500m benchmark and would see Revolut reach a new momentous landmark after becoming one of the fastest growing financial entities in the world. 

However, ambitions to reach the lofty $40bn target has some major hurdles in its way. The last funding round the company had in 2021 was during a backdrop of relative economic ease, despite the impact of the pandemic, where venture capitalists were heavily investing in fintech startups. 

Fast forward to 2024, and the economic climate is in stark contrast to that three years ago. The economic downturn in 2022 saw fintech funding across not just the UK and Europe, but globally take a significant hit. 

A KPMG report in 2022 revealed that UK fintech investment nosedived 65% that same year. Total fintech investment in the UK went from $27.8bn in 2021, to just $9.6bn in 2022. 

Despite this, Revolut was able to keep its valuation relatively stable as it stood at $25.7bn in early 2024 and also has reason for optimism of reaching its $40bn target as the fintech company doubled its revenue last year to £1.7bn. 

The digital bank continues to launch and explore new products and services to maintain its position as the UK’s leading fintech. Most recently, Revolut launched a new pan-European debit loyalty card programme designed to reward its more than 40 million customers.

Revolut X – the company’s dedicated cryptocurrency exchange – also launched this year, as well as continuing to expand in multiple markets across the world. 

However, despite gaining a banking licence in countries outside of Europe, the one grey cloud that continues to linger over Revolut is the uncertainty of obtaining a UK banking licence. 

The fintech applied to the Bank of England for a licence in 2021 but it has still yet to be granted as the Prudential Regulatory Authority continues to ponder its fate. 

Gaining a UK banking licence will prove vital for Revolut’s plans to roll out lending options to its customer base.