Revolut taps SoftBank to get UK licence

UK-based fintech firm Revolut has reportedly reached an agreement with investor SoftBank to simplify its ownership structure, potentially clearing a hurdle in its quest for a long-delayed banking license in the UK. This development comes after months of negotiations between the two parties.

SoftBank had been seeking substantial compensation for relinquishing its priority class of shares, a key requirement for Revolut to obtain a UK banking license. The Bank of England had mandated that Revolut consolidate its six classes of shares into a single class as a condition for granting a full license, which the company had applied for over two and a half years ago.

In 2021, SoftBank led an $800 million funding round that valued Revolut at $33 billion. The standoff over the preference shares held by investors like SoftBank had been a major obstacle preventing Revolut from obtaining a banking license.

The agreement reached last week is said to involve no issuance of new “top-up” shares for SoftBank and will not have a financial impact on Revolut. According to reports, other investors, including Tiger Global Management, venture capital firm TCV, Balderton Capital, and Ribbit Capital, have either agreed to transfer their shares into a single class or are in the final stages of doing so.

The regulatory arm of the Bank of England is the lead authority responsible for approving banking license applications in the UK, with oversight from the Financial Conduct Authority (FCA).

As of now, neither the Bank of England nor SoftBank has commented on the report, while Revolut and the FCA declined to provide any official statements.