Monday, April 24, 2023 1:32 p.m.
Revolut’s value has nearly halved in the past year according to one of its shareholders, as investors reconsider the high prices attached to technology and fintech companies during a funding frenzy in 2021 .
Schroders Global Innovation Trust, a long-time investor in Revolut, revealed in a regulatory filing last week that it had reduced the value of its investment in the fintech company by 46% to around £5.43million.
The cut would imply a price tag of around $17.7 billion, down from a bumper $33 billion valuation in 2021 that earned the fintech banking firm the crown of the Kingdom’s then-most valuable private company. -United.
Revolut’s writedown came amid a drastic downgrade in the valuation of the tech-heavy Schroders Global Innovation Trust portfolio. The fund said its holdings at the end of last year were worth £257.9m, down 41% from the value of £436.9m at the end of 2021.
Revolut has grown rapidly over the past five years to attract some 28 million customers worldwide. However, investors have soured on high-growth, loss-making fintech companies as economic conditions have deteriorated over the past 12 months.
The buy-it-now and pay-later giant Klarna was among the most publicized victims from last year’s downturn as it was forced to raise funds at a $6.7 billion valuation down about 85%.
A Revolut spokesperson said the company “does not engage in speculation about our valuation”.
“Since our last funding round, in which we were valued at $33 billion, Revolut has continued to perform well across all of its markets, continued to hire and grow, and reported its first full year of profitability,” the spokesperson added.
The decline in the valuation of Revolution also comes amid a tricky time for the company after auditors raised questions about its earnings in its much-delayed annual accounts in March.
Revolut reported its first full-year profit in March, but auditor BDO said it was unable to independently verify some £477million in revenue due to quirks in its internal IT systems.
Questions from auditors have also reportedly delayed Revolut’s long search for a full UK banking license.
Talk with AM City. in March, CFO Mikko Salovaara said it was “imminent” and would be granted “very soon”. However, Reuters reported earlier this month that the accounts had caught the attention of regulatorsand its application for a banking license was now experiencing delays.
When approached by AM City today the company said it could not comment on pending regulatory filings.