HomeIndices AnalysisRevolut employees set for massive windfall as company plans $500m share sale

Revolut employees set for massive windfall as company plans $500m share sale

Revolut, Britain’s leading fintech company, is making headlines as it plans to offer its employees the opportunity to cash in on a stock sale worth hundreds of millions of pounds. According to sources, the banking and payments services provider is in talks with investment bankers to coordinate a secondary share sale that could reach up to $500m (£394m). Morgan Stanley, a renowned Wall Street bank, is expected to be appointed to handle the stock offering, which is set to take place later this year.

It has been reported that Nik Storonsky, Revolut’s co-founder and CEO, is determined to achieve a valuation of at least $33bn (£26bn), which the company secured in its primary funding round in 2021. “This will not be a down-round,” a source familiar with Revolut’s plans said. With over 40 million customers, Revolut is one of the largest financial technology businesses in the world. Its revenue doubled last year, reaching approximately £1.7bn, and is expected to be published in the coming months.

Founded in 2015, Revolut has experienced a rapid growth, despite facing regulatory and compliance challenges. Last year, reports surfaced about its release of funds from accounts flagged by the National Crime Agency as suspicious. Despite this, the company’s customer base has skyrocketed from 16.4m since it completed its Series E fundraising nearly three years ago. Insiders believe that Revolut’s continuous expansion justifies its position as Britain’s most valuable fintech company.

Recently, Monzo, a UK-based digital bank, confirmed a report by Sky News that it had successfully raised nearly £500m in funding, including investments from Google’s parent company, Alphabet, and a Singaporean sovereign wealth fund. However, the funding landscape for tech companies has been challenging, with several startups struggling to survive after achieving unicorn valuations of over $1bn.

Revolut has allotted stock options to its 10,000 employees as part of their compensation packages. While the exact number of eligible employees for the stock sale later this year is unknown, a source close to the company revealed that it has received numerous expressions of interest from potential investors. Notable investors in Revolut include SoftBank’s Vision Fund and Tiger Global.

News of the planned share sale comes as Revolut’s investors eagerly await updates on its application for a UK banking licence. The company applied for a banking licence in Britain over three years ago but has yet to receive approval. Mr Storonsky has publicly criticized the delay and questioned the approach of British regulators and politicians. He also stated that he would not consider listing Revolut on the London Stock Exchange. While an initial public offering for Revolut is not expected in the near future, investors and industry peers would not be surprised if the company initiated the listing process in the next few years.

Sources reveal that Revolut’s board members are among those expected to participate in the secondary share sale. However, further details about the sale are yet to be disclosed. Revolut is chaired by Martin Gilbert, a seasoned City veteran who has faced governance and performance challenges at Assetco, a London-listed asset manager. Other directors include Michael Sherwood, a former Goldman Sachs executive who was responsible for its operations outside the US and was considered one of the most skilled traders of his generation.

An external shareholder in the company expressed concerns about the exclusion of non-employees from the deal, stating that it may draw criticism from some investors. It is worth noting that Revolut has conducted similar secondary share sales in the past, including after its 2021 Series E round. However, the company declined to comment on the news this weekend.

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