Revolut’s latest breathless valuation
Revolut is in talks to raise new funding at a $65bn valuation to bankroll its American dream.
The UK-based fintech plans to raise $1bn by issuing new shares and selling existing stock, the FT scooped.
It hopes to use the money to finance its global expansion, with the US market a key target.
The US investment firm Greenoaks is in talks to lead the funding round, and Abu Dhabi’s Mubadala, which first invested in the company last year, is also in discussions to participate.
Let’s step back and talk about that $65bn figure, though.
To start, it’s not a typical headline figure but a “blended” valuation, comprising a high price for raising new money and a lower one for existing investors selling their shares.
Moreover, fintechs often undergo artificial valuation surges at funding rounds. Take Stripe: the payments processor reached a peak valuation of $95bn during a 2021 funding round, and then dropped off to $50bn by 2023. SoFi and Circle also had similar trajectories.
That’s not to mention Revolut’s historical challenges with regulators.
On top of that, Revolut’s chief executive, Nik Storonsky, has major skin in the game.
If the company climbs to a $150bn valuation, Storonsky is up for a bumper pay package, the FT reported last month.
Fintechs such as Revolut have attracted towering multiples more akin to Silicon Valley tech outfits, but the bread and butter of their business remains the rather more sedate world of retail banking.
So let’s wait until the business goes public before getting too carried away with the top-line valuation.