Revolut’s value has plunged by nearly half over the past year according to one of its shareholders, as investors reconsider the hefty price tags attached to tech and fintech firms during a 2021 funding frenzy.
Schroders Global Innovation Trust, a long-time Revolut investor, revealed in a regulatory filing last week that it had written down the value of its investment in the fintech firm by 46 per cent to around £5.43m.
The cut would imply a price tag of around $17.7bn, down from a bumper $33bn valuation in 2021 which won the fintech banking firm the crown of then-most valuable private company in the UK.
The Revolut write-down came amid a drastic valuation haircut in the tech-heavy Schroders Global Innovation Trust portfolio. The fund said its holdings at the end of last year were worth £257.9m, a 41 per cent cut from the £436.9m value at the end of 2021.
Revolut has grown rapidly over the past five years to scoop up some 28m customers globally. However, investors have soured on high-growth loss-making fintech firms as economic conditions have worsened over the past 12 months.
Buy-now pay-later giant Klarna was among the most high-profile casualties of the downturn last year as it was forced to raise funding at a valuation of $6.7bn down around 85 per cent.
A Revolut spokesperson said the firm does “not engage in speculation on our valuation”.
“Since our last funding round, in which we were valued at $33bn, Revolut has continued to perform strongly in all its markets, has continued to hire and expand, and reported its first full year of profitability,” the spokesperson added.
The valuation cut for Revolut also comes amid a tricky period for the company after auditors raised questions over its revenues in its much-delayed annual accounts in March.
Revolut reported its first annual profit in March but auditor BDO said it had been unable to independently verify some £477m of revenues due to quirks in its internal IT systems.
Auditors’ questions are also reported to have set back Revolut’s long hunt for a full banking licence in the UK.
Speaking with City A.M. in March, chief financial officer Mikko Salovaara said it was “imminent” and would be granted in the “very near term”. However, Reuters reported earlier this month that the accounts had drawn scrutiny from regulators, and its banking licence application was now facing delays.
When approached by City A.M. today, the firm said it could not comment on ongoing regulatory applications.