Revolut Staff and Early Investors Cash In $1 Billion After Banking License Approval

Revolut staff and early investors have sold nearly $1 billion worth of stock since August, following the fintech company's long-awaited UK banking license, as reported by the Financial Times. This secondary share sale, which initially allowed only current employees to sell, has been extended twice to enable early backers and former employees to monetize some of their holdings.

The sale, launched a month after Revolut secured its UK banking license, attracted significant institutional interest, including Abu Dhabi sovereign investor Mubadala, which acquired a stake for the first time.

The first round of the sale reportedly generated between $200 million and $300 million for Revolut founder and CEO Nik Storonsky. The second round saw early venture capital investors sell approximately $500 million worth of stock.

"The size of the sales, which enable staff and early investors to crystallise some of their paper wealth, underline the ascent of Revolut from fintech upstart to serious banking challenger as well as the consequences of companies staying private for longer," notes the FT.

The significant sales highlight the growing trend of secondary share sales as a means for investors to capitalize on the surging valuations of successful startups. This trend was also observed earlier this year when Stripe, another privately held company, allowed employees to sell about $1 billion of stock at a $65 billion valuation.

Revolut's journey to secure its UK banking license was lengthy, spanning more than three years and including a qualified audit in its 2021 accounts that initially hindered investor confidence. However, the license approval this summer triggered a wave of new investors eager to support the rapidly growing financial app. The second round of the share sale even included wealthy clients of Goldman Sachs' private bank.

Revolut has reportedly retained a portion of the proceeds from the share sales. Former staff were subject to a 2% transaction fee, higher than the 1.5% fee levied in a 2021 fundraising round. A source familiar with the matter told the FT that the higher fee was intended to cover the company's costs associated with the share sale and that Revolut did not profit from the transaction fees.