(qlmbusinessnews.com via news.sky.com– Fri, 24th July 2020) London, Uk – –
The UK-based digital bank has raised additional funding at a $5.5bn (£4.3bn) valuation, Sky News understands.
The British-based digital payments and banking app Revolut is raising tens of millions of pounds from a further share sale just months after crystallising its status as one of the UK's most valuable technology “unicorns”.
Sky News has learnt that Revolut will announce in the coming days that it has secured an $80m (£63m) investment from US-based private equity firm TSG Consumer Partners.
The share sale will take place at the same $5.5bn valuation at which it sold a $500m stake in February, an insider said on Friday.
Since then, the global coronavirus pandemic has buffeted both traditional banks and a number of digital lenders amid expectations of rising loan impairments amid the economic fallout from the COVID-19 crisis.
Sources suggested that Revolut's ability to raise new funding at the same valuation underlined its resilience, even as the cross-border travel on which its revenues partly depend faces a protracted recovery.
Founded by Nik Storonsky, Revolut has grown from a standing start little more than five years ago to have more than 2,000 employees and more than 10 million customers in well over 30 countries.
In February, it unveiled TCV – an early-stage backer of Spotify, Airbnb and Netflix – as a major new investor.
The mammoth funding round came soon after Revolut appointed the City veteran Martin Gilbert as its chairman.
Michael Sherwood, former boss of Goldman Sachs in Europe and one of the City's most prominent bank executives, has also joined the company as a non-executive director.
The board changes came as Revolut was forced to respond to a series of reputational challenges including alleged links to the Kremlin – which it has strenuously denied.
Revolut said last year it was opening 12,000 accounts every day – equating to four million each year – and has received financial backing from some of the biggest names in the venture capital industry, including Balderton Capital, DST Global and Index Ventures.
Mr Storonsky added in 2019 that he would like Revolut to be worth between $20bn (£15.8bn) and $40bn (£31.6bn) before it contemplates a stock market listing, which is likely to be some years away.
Despite its multibillion pound valuation, Revolut continues to be lossmaking, although that hardly makes it an anomaly among prominent technology companies.
In results published last autumn, Revolut said it had made a pre-tax loss of £33m in 2018, compared with £15m the previous year.
However, revenues grew more than fourfold from £13m to £58m, with the company saying it was on course to triple revenues again this year.
The Bank of England's Prudential Regulation Authority has challenged faster-growing firms under its auspices to adopt more rigorous stress-testing and evidence of greater challenge by board members.
Revolut declined to comment on Friday.
By Mark Kleinman