Revolut, the London-based fintech, has confirmed plans for a secondary share sale that values the company at a staggering $45 billion (£35 billion).
This move positions Revolut as Europe’s most valuable private tech company and could have significant implications for the future of both the company and the UK’s financial sector.
The secondary share sale will provide Revolut employees with a lucrative opportunity to cash in on their equity stakes.
They will be able to sell shares to major institutional investors, including Coatue Management, D1 Capital Partners, and Tiger Global.
These firms are known for their aggressive investments in high-growth tech companies, underlining the confidence in Revolut’s continued expansion and profitability.
The share sale is part of a broader strategy to solidify Revolut’s standing in the global financial technology landscape.
CEO Nikolay Storonsky emphasized the importance of this milestone for the company, particularly for the employees who have driven its success.
“We’re delighted to provide the opportunity to our employees to realise the benefits of the company’s collective success,” said Storonsky.
He credited their hard work, innovation, and dedication for propelling Revolut to its current status.
Revolut’s UK banking license: a landmark achievement
The share sale follows Revolut’s recent success in securing a UK banking license, a significant milestone that had been long-awaited by the company.
The banking license marks Revolut’s official entry into the highly regulated UK banking sector, further legitimizing its operations and offering it the ability to provide a broader range of financial services to its customers.
The licensing process, however, has not been without controversy.
Storonsky has been vocal in his criticism of the UK’s financial regulatory environment, particularly the lengthy delays associated with obtaining the license.
He has previously expressed frustration over the bureaucratic hurdles that fintech companies like Revolut face in the UK, compared to the more streamlined processes in other jurisdictions.
Despite these challenges, Revolut’s eventual success in securing the banking license might be softening its stance toward the UK market.
The UK remains Revolut’s largest market, and the regulatory approval could influence the company’s decisions regarding its future growth and public listing plans.
Treasury’s bid to keep Revolut in London
Amid this backdrop, the UK Treasury has reportedly set its sights on convincing Revolut to list publicly in London rather than pursuing an initial public offering (IPO) in the United States.
City Minister Tulip Siddiq is said to be leading the charge, with plans to meet with Revolut’s leadership in the coming months to discuss the fintech’s listing preferences.
The UK’s financial authorities are keen to retain high-growth tech firms like Revolut on home soil.
The desire to keep Revolut in London reflects broader concerns that the UK could lose out on lucrative financial technology listings to the US market, particularly New York.
This concern has only grown in the aftermath of Brexit, as London seeks to maintain its status as a global financial hub.
Siddiq’s upcoming talks with Revolut will focus on the advantages of a London listing, especially in light of recent changes to the UK’s listing regime.
These changes, implemented by the Financial Conduct Authority (FCA) last month, represent the biggest overhaul of the UK’s listing rules in over three decades.
The reforms are part of a concerted effort to make the UK a more attractive destination for IPOs, particularly for tech firms.
Despite the Treasury’s efforts, there is speculation that Revolut may still opt for a New York IPO.
The allure of New York, with its deep capital markets and established tech investor base, remains a powerful draw for high-growth companies.
The US has long been seen as the premier destination for tech IPOs, offering higher valuations and greater access to investment capital.
However, the UK’s recent regulatory changes and the government’s push to retain its homegrown tech champions could sway Revolut’s decision.
The FCA’s new rules are designed to make the London Stock Exchange more competitive with its global counterparts, reducing red tape and making it easier for innovative companies to go public in the UK.
A turning point for British financial regulation
The UK government and its regulatory bodies, including the FCA, have made it clear that they view the success of British businesses and the financial sector as a national priority.
The FCA’s new listing rules are part of this broader strategy to ensure that London remains an attractive place for companies to raise capital.
The government’s commitment to championing British business is also evident in its proactive approach to engaging with companies like Revolut.
By making listing on the London Stock Exchange more appealing, the UK hopes to retain its position as a leading global financial center, even in the face of stiff competition from New York.
Revolut’s decision on where to list will be closely watched by both the financial sector and policymakers.
For Revolut, the choice between London and New York will likely hinge on a complex mix of factors, including regulatory considerations, market conditions, and investor sentiment.
For the UK, securing Revolut’s IPO would be a major win, signaling that London remains a top destination for tech innovation and finance.
Revolut is set to continue its journey from a fast-growing startup to a global financial powerhouse, the outcome of these discussions will have far-reaching implications for the company and the broader fintech landscape.
The coming months will reveal whether the UK’s regulatory changes and government efforts will be enough to keep one of its most successful tech firms on home soil.
What do you think about this, should successful be listed home or in the US? Tell us your view in the comments
