Revolut Plans $500 Million Equity Sale Amid IPO Market Slump

Revolut Ltd., one of Europe’s most valuable startups, is preparing to sell approximately $500 million worth of existing equity to provide liquidity for its shareholders. The digital bank is collaborating with Morgan Stanley on this transaction, aiming to benefit existing employees and early investors, according to sources familiar with the matter.

This equity sale, initially reported by the Financial Times, could value Revolut at over $40 billion, an increase from its $33 billion valuation during a 2021 fundraising round. Revolut has been striving to secure a UK banking license to expand its services. The company has seen significant growth, with 2022 revenue rising 45% to £922.5 million ($1.17 billion). While it has not yet reported 2023 results, it had forecasted revenue for the year to be around £2 billion.

The decision to sell shares follows a valuation adjustment by one of Revolut’s shareholders, Schroders Plc, which suggested the company should be valued at about $25.7 billion. Revolut, like many other large privately-held companies, has faced challenges due to a sluggish IPO market. This has created liquidity issues for early investors and employees who typically rely on share sales for liquidity.

Revolut’s move mirrors actions taken by other fintech companies. For instance, Stripe Inc. raised about $6.5 billion last year in a transaction that included a tender offer, allowing employees to sell some of their shares.

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