Digital giant Revolut banks £63m from further share sale

·3-min read

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".

<p>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.</p><p>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.</p><p>Since then, the global <strong><a href="https://news.sky.com/topic/coronavirus-8483" target="_blank">coronavirus </a></strong>pandemic has buffeted both traditional banks and a number of digital lenders amid expectations of rising loan impairments amid the economic fallout from the <strong><a href="https://news.sky.com/topic/covid-19-8518" target="_blank">COVID-19 </a></strong>crisis.</p><p>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.</p><p>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 12 million customers in well over 30 countries.</p><p>In February, it unveiled TCV - an early-stage backer of Spotify, Airbnb and Netflix - as a major new investor.</p><p>The mammoth funding round came soon after Revolut appointed the City veteran Martin Gilbert as its chairman.</p><p>Michael Sherwood, former boss of Goldman Sachs in Europe‎ and one of the City's most prominent bank executives, has also <strong><a href="https://news.sky.com/story/ex-goldman-chief-sherwood-joins-uk-fintech-unicorn-revolut-11757842" target="_blank">joined the company </a></strong>as a non-executive director.</p><p>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.</p><p>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.</p><p>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.</p> <p><strong>:: Listen to the Daily podcast on <a href="https://podcasts.apple.com/gb/podcast/sky-news-daily/id951048357?mt=2" target="_blank">Apple Podcasts</a>, <a href="https://podcasts.google.com/feed/aHR0cHM6Ly93d3cuc3ByZWFrZXIuY29tL3Nob3cvMzI4NzI0Ni9lcGlzb2Rlcy9mZWVk" target="_blank">Google Podcasts</a>, <a href="https://open.spotify.com/show/3RdXZrbbG3NydLsPYmRSJy" target="_blank">Spotify</a>, <a href="https://www.spreaker.com/show/sky-news-daily" target="_blank">Spreaker</a></strong></p><p>Despite its multibillion pound valuation, Revolut continues to be lossmaking, although that hardly makes it an anomaly among prominent technology companies.</p><p>In results published last autumn, Revolut said it had made a pre-tax loss of £33m in 2018, compared with £15m the previous year.</p><p>However, revenues grew more than fourfold from £13m to £58m, with the company saying it was on course to triple revenues again this year.</p><p>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.</p><p>Revolut declined to comment on Friday.</p>