Venture capital firm Molten Ventures has slashed the valuation of its stake in Revolut, the second investor to do so as the UK fintech awaits regulators’ decision on whether to offer it a banking licence in its home market.
Molten Ventures, formerly known as Draper Esprit, invested £7.1mn in the fintech in 2018. In its annual results released on Thursday, it said it had cut the value of its investment to £54.5mn in the year to March 31, a 40 per cent decrease on the previous valuation.
It follows a similar move by asset manager Schroders, which announced in April that it had reduced the value of its stake in Revolut to £5.4mn as of December 31 2022, a 46 per cent decrease year on year.
Revolut was last valued by investors at $33bn in July 2021, making it the UK’s most valuable private tech group before Checkout.com’s $40bn valuation in January 2022.
The fintech has been waiting for UK regulators to give it a banking licence since January 2021, a process which normally takes less than a year. It received its European banking licence in Lithuania in December 2021.
In May, chief executive Nik Storonsky told the Financial Times that the banking crisis had made regulators “extra cautious” and was to blame for delays on the licence.
This year has proved to be a bruising one, with departures including its UK bank chief and chief financial officer, clashes with investors over share classes and a qualified audit from BDO, which said it could not fully verify two-thirds of its revenues.
It has previously faced questions over its corporate culture, which led to a Financial Conduct Authority probe in 2021, while its risk management and compliance systems were reviewed in 2020.
Molten Ventures’ decision stemmed from industry guidelines around valuations that take into account factors such as revenue multiples rather than specific concerns related to the licence or other issues, according to people with knowledge of the company.
Revolut and Molten Ventures declined to comment.
Tech companies that secured stunning valuations during the coronavirus pandemic, when rates were low and cash was cheap, have faced a reckoning across the board, as rising inflation and falling consumer sentiment have made investors more careful in how they allocate their funds.
Klarna, the Swedish payments company, was forced to slash its price tag from $47bn to less than $7bn in a private funding round last July. Public fintechs have also suffered, with Nasdaq-listed Affirm down more than 85 per cent from its debut in January 2021.
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