- A second investor in London-based Revolut has slashed its valuation of the fintech this year.
- Molten Ventures, a long-term backer, has reduced the value of its position in the company by 40%.
- Revolut is the latest fintech star to take a valuation haircut, following on from the likes of Stripe and Klarna.
A second Revolut investor has slashed its valuation of the London-based fintech company as the price correction of high-value private startups continues.
Molten Ventures, a listed UK venture capital firm, has written down its holding in Revolut by around 40%, according to its latest annual results published on Thursday. The move, by one of the fintech’s earliest investors, follows a similar cut by London fund Schroders, which reduced its stakeholding by 46% in April.
Revolut, founded in 2015, was valued at $33 billion in an $800 million Series E round led by investing giants SoftBank and Tiger Global in July 2021. The fintech became popular by enabling customers to spend money worldwide in 150 currencies at a real-time exchange rate with no fees through a debit card. It also offers bank accounts, savings options, plus trading in stocks and cryptocurrencies.
Molten cut the value of its stake in Revolut from £91.3 million ($116.8 million) last year to £54.5 million ($69.7 million) as of the end of March. Molten, formerly Draper Esprit, first backed Revolut in 2018 and invested in the company’s Series E at a discount to its then-$33 billion valuation. The 40% drop would indicate the fund values Revolut at around $20 billion, slightly more than Schroders who marked the company down to $17.7 billion.
Revolut has been through a bruising period. The company’s CFO left suddenly in May, citing personal reasons, after two years in the role. The company has also had repeated run-ins with regulators over its accounts and and its attempts to land a UK banking license. As yet, Revolut does not have a license in the UK but the business has had a full banking license in Europe since 2021.
In addition, The company repeatedly missed deadlines to file its 2021 results following a push for stronger internal controls by its auditor BDO after a rebuke by the Financial Reporting Council, the Financial Times reported.
Molten Ventures CEO Martin Davis said in an interview with City AM the investor was “quite encouraged” with the direction Revolut was taking but said there were some “proof points” the market wanted to see around its increased revenue for 2022.
Davis said that once there was visibility around both profitability and the banking license then he thought “the valuation will recover.”
The company posted a net profit of £26.3 million ($31.8 million) in 2021, according to its latest annual report, while also nearly tripling its revenues for the period amid a boom in cryptocurrency trading. Despite claiming to have hit $1 billion in revenues for 2022, Revolut is not immune from the wider market for consumer fintech taking a hit. Fellow fintech leaders like Klarna and Stripe have accepted valuation cuts in the past 12 months as part of a wider rout in tech prices.
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