Revolut’s position as the UK’s most valuable fintech company is under threat, after a writedown by one of its investors suggested that almost $15bn (£12bn) could be wiped off the value of the firm.
A UK trust run by the asset manager Schroders suggested that the value of its stake in Revolut has plunged by 46% over the past year, having estimated in its annual report that the holding was worth only £5.4m as of December, down from £10.1m a year earlier.
It comes only 18 months after Schroders ploughed £9.9m into the firm as part of a big funding round for Revolut, which the asset manager lauded as an “ambitious neobank”, in the summer of 2021.
The revaluation suggests that the London-headquartered Revolut – which became the UK’s most valuable fintech firm after reaching a $33bn valuation on the back of that funding round – could now be worth only $18bn.
It marks the second cut to Revolut’s valuation by a top investor in recent months, after similar moves by the US-based investor TriplePoint. The writedown by TriplePoint’s venture growth fund was far shallower, having estimated that the stake had lost about 15% of its worth, dropping from $10.1m to $8.6m, according to reports. That would imply a drop in Revolut’s overall valuation to $28bn.
However, the cuts will raise concerns about investors’ estimations of the real worth of Revolut, which has been praised as a high-growth success story by leading UK politicians including the chancellor, Jeremy Hunt.
Revolut has been struggling to repair its reputation, having been criticised for the late filing of accounts, EU regulatory breaches and corporate culture. Bosses are also still waiting for UK approval of its banking licence, more than two years after it lodged its application.
Revolut, which is chaired by the former Aberdeen Asset Management co-founder Martin Gilbert, played down the impact of the revaluation by Schroders’ Capital Global Innovation Trust. “We do not engage in speculation on our valuation,” a Revolut spokesperson said. “Since our last funding round, in which we were valued at $33bn, Revolut has continued to perform strongly in all its markets, has continued to hire and expand, and reported its first full year of profitability.”
Schroders’ revaluation was conducted before Revolut belatedly reported its first annual profit last month, worth £26.3m in the year to December 2021.
Revolut has grown hugely since it was co-founded by the former Credit Suisse and Lehman Brothers derivatives trader Nikolay Storonsky in 2015. What started as a prepaid card offering free currency exchange has since exploded into a wide-ranging financial company employing more than 6,000 staff and serving 27 million customers in 37 countries, with more than 50 products and services. As well as money transfers, it offers home rentals, buy now, pay later credit and a service that pays wages in advance.
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Schroders did not give an explanation for the writedown in the trust’s annual report, which also showed that it had slashed the value of three other unlisted companies in its portfolio. They include the online-only retail lender Atom Bank, the London-headquartered AI drug discovery firm BenevolentAI, and the disease treatment developer AMO Pharma.
The trust’s portfolio was largely inherited from the former Woodford Patient Capital Trust, which was bought up after Neil Woodford’s investment business went bust in 2019.
However, Schroders said it held out hope for newer investments, including Revolut. “We are confident that this new idea pipeline will continue to deliver the opportunity to invest in similarly exciting young, innovative companies that, we believe, represent the leading growth businesses of the future,” the trust’s annual report said.
The Guardian contacted Schroders for further comment.
