Revolut investor cuts book value by 40%

Enterprise capital agency Molten Ventures has slashed the valuation of its stake in Revolut, the second investor to take action because the UK fintech awaits regulators’ determination on whether or not to supply it a banking licence in its house market.

Molten Ventures, previously often known as Draper Esprit, invested £7.1mn within the fintech in 2018. In its annual outcomes launched on Thursday, it mentioned it had lower the worth of its funding to £54.5mn within the yr to March 31, a 40 per cent lower on the earlier valuation.

It follows the same transfer by asset supervisor Schroders, which introduced in April that it had lowered the worth of its stake in Revolut to £5.4mn as of December 31 2022, a 46 per cent lower yr on yr.

Revolut was final valued by buyers at $33bn in July 2021, making it the UK’s Most worthy personal tech group earlier than Checkout.com’s $40bn valuation in January 2022.

The fintech has been ready for UK regulators to provide it a banking licence since January 2021, a course of which usually takes lower than a yr. It acquired its European banking licence in Lithuania in December 2021.

In Might, chief government Nik Storonsky advised the Monetary Occasions that the banking disaster had made regulators “additional cautious” and was in charge for delays on the licence.

This yr has proved to be a bruising one, with departures together with its UK financial institution chief and chief monetary officer, clashes with buyers over share lessons and a certified audit from BDO, which mentioned it couldn’t absolutely confirm two-thirds of its revenues.

It has beforehand confronted questions over its company tradition, which led to a Monetary Conduct Authority probe in 2021, whereas its danger administration and compliance methods had been reviewed in 2020.

Molten Ventures’ determination stemmed from business pointers round valuations that take into consideration components comparable to income multiples moderately than particular issues associated to the licence or different points, in line with folks with data of the corporate.

Revolut and Molten Ventures declined to remark.

Tech firms that secured gorgeous valuations throughout the coronavirus pandemic, when charges had been low and money was low cost, have confronted a reckoning throughout the board, as rising inflation and falling shopper sentiment have made buyers extra cautious in how they allocate their funds.

Klarna, the Swedish funds firm, was pressured to slash its price ticket from $47bn to lower than $7bn in a personal funding spherical final July. Public fintechs have additionally suffered, with Nasdaq-listed Affirm down greater than 85 per cent from its debut in January 2021.