Revolut’s founder Storonsky to divest part of his stake

Nikolai Storonsky, the founder and CEO of Revolut, one of the world’s leading fintech companies, is planning to cash in part of his multibillion-dollar stake in the company. This move is part of a $500 million share sale that is set to take place in the coming weeks.

Storonsky, who has been at the helm of Revolut since its inception in 2015, holds a stake in the company worth billions of dollars. The exact size of his stake remains unclear, but at the $40 billion valuation that Revolut hopes to attract, it would be worth several billion dollars. Storonsky plans to offload stock worth tens or even hundreds of millions of dollars in the secondary deal.

The sale is being organized by Morgan Stanley, and the size of Storonsky’s disposal will depend on the valuation that Revolut can attract from new investors, as well as final allocation decisions by the company and its advisers. This move comes after Revolut’s announcement last month that it had hired Morgan Stanley to organize the secondary share sale, which would be at not less than the $33 billion valuation it raised primary funding at in 2021.

Revolut, which boasts more than 40 million customers worldwide, is not planning to raise new capital as part of this transaction. However, any sizeable share sale will still be closely watched across the global fintech sector. The sale is expected to be restricted to company employees, many of whom have been allotted stock options as part of their compensation packages.

Fintech challenges

This development comes at a time when Revolut revealed record earnings of ￡438 million last year on revenues which nearly doubled to ￡1.8 billion. Despite facing a string of regulatory and compliance challenges since its founding, the company’s growth has been nothing short of remarkable. Customer numbers have soared from 16.4 million at the point of the Series E fundraising nearly three years ago.

Despite the protracted downturn in tech valuations over the last two years, insiders argue that Revolut’s relentless expansion would easily justify it maintaining its status as Britain’s most valuable fintech. This is in contrast to the broader funding landscape, which has seen a growing number of tech companies, which had attracted unicorn valuations of more than $1 billion, now struggling to stay afloat.

The news of the proposed share sale comes as Revolut’s investors continue to await positive news about its application for a UK banking licence. The company applied to regulators to become a bank in Britain more than three years ago, but has so far failed to secure approval.