Revolut Suffers Another Valuation Hit as Molten Ventures Cuts Stake by 40%

Revolut Suffers Another Valuation Hit as Molten Ventures Cuts Stake by 40%

Time Stamp: June 15, 2023 11:26 AM
Source Node: 2726202

Revolut is
enduring another blow to its valuation as the tech-focused investment firm, Molten
Venture has written down its stake in the London-headquartered challenger bank.
According to Molten’s financial result for the year ended March 2023 released
today (Thursday), the company’s stake in Revolut now stands at £54.5 million,
which is down 40% from £91.3 million a year earlier.

Earlier in
April, the global asset manager, Schroeder felt compelled to devalue Revolut by 46%, slashing the fintech company’s valuation by approximately $15
billion as a result. The depreciation
follows a reduction of 15% applied a month earlier by US-based TriplePoint Venture
Growth.

Both moves shot
down Revolut’s valuation to about $17.7 billion and $28 billion, respectively, representing a dramatic fall from a peak of $33 billion which Revolut achieved in July 2021 after
raising $800 million from a funding round.

Molten
reduced its stake in Revolut as the venture capital firm reported a
group loss of £243 million in its latest
financial report when compared to
a profit of £301 million from the preceding fiscal year. Schroders’ investment
trust recently reported a decline of 41% in its holdings at the end of 2022.

“The past
year has delivered a significant shift in the investment environment,
particularly in the high-growth technology markets, as interest rates were
increased to combat global inflationary pressures,” Martin Davis, Molten’s CEO,
explained in the financial report. “This challenging market
backdrop has led to a reduction in the value of our portfolio, and our focus
for this year has been centered on the active management of our investments
while adapting our business to respond positively in the face of market
pressures.”

Revolut
Faces Difficulty as Global Fintech Funding Slumps

Meanwhile,
the reductions of stakes in
Revolut are at a difficult period for the fintech company. The firm, which
began as a cross-border money transfer platform and subsequently expanded into
consumer loans, crypto trading and pet insurance, is struggling to secure a
banking license in the UK.

In March,
Revolut reported its first full year of
profit from business activities in the fiscal year of 2021 after
missing several timelines
to file the financial results for the period. However, external
auditor BDO said it could not independently verify roughly £477 million of the firm’s annual
revenue.

Across the
industry, other fintech companies are experiencing devaluations. For
instance, Swedish ‘buy now, pay later’ credit provider, Klarna, saw its
valuation plummet from $45.6 billion to $6.7 billion within a year despite a rise of 21% in its revenue.
Moreover, global fintech funding shrank significantly in 2022, according to data from Innovative Finance and CB Insights.

ASIC cancels license; BaFin probes illegal trading brands; read today’s news nuggets.

Revolut is
enduring another blow to its valuation as the tech-focused investment firm, Molten
Venture has written down its stake in the London-headquartered challenger bank.
According to Molten’s financial result for the year ended March 2023 released
today (Thursday), the company’s stake in Revolut now stands at £54.5 million,
which is down 40% from £91.3 million a year earlier.

Earlier in
April, the global asset manager, Schroeder felt compelled to devalue Revolut by 46%, slashing the fintech company’s valuation by approximately $15
billion as a result. The depreciation
follows a reduction of 15% applied a month earlier by US-based TriplePoint Venture
Growth.

Both moves shot
down Revolut’s valuation to about $17.7 billion and $28 billion, respectively, representing a dramatic fall from a peak of $33 billion which Revolut achieved in July 2021 after
raising $800 million from a funding round.

Molten
reduced its stake in Revolut as the venture capital firm reported a
group loss of £243 million in its latest
financial report when compared to
a profit of £301 million from the preceding fiscal year. Schroders’ investment
trust recently reported a decline of 41% in its holdings at the end of 2022.

“The past
year has delivered a significant shift in the investment environment,
particularly in the high-growth technology markets, as interest rates were
increased to combat global inflationary pressures,” Martin Davis, Molten’s CEO,
explained in the financial report. “This challenging market
backdrop has led to a reduction in the value of our portfolio, and our focus
for this year has been centered on the active management of our investments
while adapting our business to respond positively in the face of market
pressures.”

Revolut
Faces Difficulty as Global Fintech Funding Slumps

Meanwhile,
the reductions of stakes in
Revolut are at a difficult period for the fintech company. The firm, which
began as a cross-border money transfer platform and subsequently expanded into
consumer loans, crypto trading and pet insurance, is struggling to secure a
banking license in the UK.

In March,
Revolut reported its first full year of
profit from business activities in the fiscal year of 2021 after
missing several timelines
to file the financial results for the period. However, external
auditor BDO said it could not independently verify roughly £477 million of the firm’s annual
revenue.

Across the
industry, other fintech companies are experiencing devaluations. For
instance, Swedish ‘buy now, pay later’ credit provider, Klarna, saw its
valuation plummet from $45.6 billion to $6.7 billion within a year despite a rise of 21% in its revenue.
Moreover, global fintech funding shrank significantly in 2022, according to data from Innovative Finance and CB Insights.

ASIC cancels license; BaFin probes illegal trading brands; read today’s news nuggets.

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