Revolut’s Valuation Cut by Schroders as Fintech Funding Wanes

by James · May 7, 2023

(Bloomberg) — A shareholder in Revolut Ltd. has slashed the value of its stake in the UK fintech company by 46%, the latest indicator of how investor caution is affecting the fintech sector.

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An investment fund managed by Schroders Plc disclosed a 4.7 million pound ($5.8 million) write-down in its 2022 results published on April 17. This brought the valuation of the Schroders Capital Global Innovation Trust stake to £5.4m as at 31 December, up from £10.1m a year earlier.

The write-down comes after the Telegraph reported last month that TriplePoint Venture Growth BDC Corp. had reduced the value of its stake in Revolut by 15%. While Revolut’s delayed accounts showed the fintech firm posted its first annual profit in 2021, the auditor said it was unable to satisfy itself about the “completeness and occurrence” of nearly three-quarters of its 2021 revenue.

“We do not engage in speculation about our valuation,” Revolut said in an emailed statement to Bloomberg. “Since our last funding round, where we were valued at $33 billion, Revolut has continued to perform strongly in all of its markets, continued to hire and expand, and reported its first full year of profitability.”

But a wider gloom has enveloped the startup world since Revolut raised $800 million to be valued at $33 billion in 2021. The UK’s fintech sector saw investment fall by $22 billion to $17 billion in 2022 as higher interest rates, inflation and falls in valuations hit investors’ appetites.

Read more: UK Fintech investment to plunge by almost 60% in 2022, says KPMG

Revolut CEO Nikolay Storonsky said in July 2022 that Revolut was profitable and had enough funding for two years, allowing it to sidestep a strained period for fintech fundraising that has seen rivals such as Klarna shave billions of dollars from their market capitalization.

London-based Revolut applied for a UK banking license in 2021 and is still awaiting a decision from the Prudential Regulation Authority. The company is “almost there” to get the license, CFO Mikko Salovaara said last month.

A spokesperson for Schroders — which invested $13.7 million in Revolut in 2021 alongside investors including SoftBank Vision Fund 2, according to previous filings — declined to comment. The Times reported on Schroders’ write-down earlier.

–With assistance from Loukia Gyftopoulou and Aisha S Gani.