Tiger Global in talks to lead $500m Revolut share deal
The prolific global technology investor is among a number of parties which are exploring leading the secondary share sale at a valuation of at least $40bn, Sky News learns.
Tuesday 16 July 2024 16:12, UK
One of the world's most prolific investors in technology companies is in talks to lead a new investment round at Revolut, the British-based fintech.
Sky News has learnt that Tiger Global Management is one of several parties which have expressed interest in acquiring more shares in Revolut.
Tiger Global, which is a shareholder in Facebook-owner Meta, Microsoft and the semiconductor behemoth Nvidia, jointly led Revolut's $800m primary funding round in 2021.
The latest deal will not involve the issuance of new shares but will see many of the digital bank's employees selling their existing holdings - known as a secondary offering.
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Last week, Sky News revealed that Nik Storonsky, who is the fintech giant's chief executive, plans to offload stock worth tens or even hundreds of millions of dollars in the deal.
Sources said SoftBank, which also led the 2021 round, was unlikely to participate in the latest process.
Revolut hopes to attract a valuation of at least $40bn, with sources suggesting it could ultimately be as high as $45bn.
Sky News revealed last month that Revolut had hired Morgan Stanley to organise the secondary share sale and that it would be at not less than the $33bn valuation at which it raised primary funding in 2021.
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 be closely watched across the global fintech sector.
Revolut this month revealed record earnings of £438m last year on revenues which nearly doubled to £1.8bn.
Founded in 2015, it has experienced a string of regulatory and compliance challenges, with reports last year highlighting its release of funds from accounts flagged by the National Crime Agency as suspicious.
The company's growth has taken place at breakneck speed, with customer numbers soaring from 16.4m at the point of the Series E fundraising nearly three years ago.
Insiders argued that despite the protracted downturn in tech valuations over the last two years, Revolut's relentless expansion would easily justify it 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 £500m, including backing from an arm of Google's owner, Alphabet, and a Singaporean sovereign wealth fund.
Elsewhere, however, the funding landscape has been bleaker, with a growing number of tech companies which had attracted unicorn valuations of more than $1bn now struggling to stay afloat.
Revolut has allotted stock options to many of its 10,000 employees as part of their compensation packages, although it was unclear how many would be eligible to dispose of equity in the current transaction.
The proposed share sale comes as Revolut's investors continue to await news about its application for a UK banking licence.
The company applied to regulators to become a bank in Britain more than three years ago, but has so far failed to secure approval.
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Insiders believe that a positive outcome could be delivered imminently.
Mr Storonsky has been publicly critical of the delay, and last year questioned the approach of British regulators and politicians, as he suggested that he would not contemplate a listing on the London Stock Exchange.
One person close to Revolut said other board members might also participate in the secondary share sale.
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Tap hereThe company is chaired by Martin Gilbert, the City veteran, while its other directors include Michael Sherwood, the former Goldman Sachs executive who was jointly responsible for its operations outside the US and who was regarded as one of the most skilled traders of his generation.
Revolut declined to comment, while Tiger Global did not respond to a request for comment.