Buzzy fintech Revolt refuses to go public in 2022 amid slowdown in global IPO market
- SoftBank-backed fintech Revolut has ruled out an IPO in 2022 as the fintech focuses on growth.
- The London-based startup would be eager to avoid a similar fate as trading app Robinhood.
- IPOs have declined this year as geopolitical uncertainty and market corrections have wreaked havoc on publicly traded stocks.
Challenger bank Revolt has no plans to go public for at least two years as it bids to build revenue against the backdrop of technical valuations and hike in interest rates, sources said.
The $33 billion fintech, which was backed last year by both SoftBank and Tiger Global, aims to enable users to spend money around the world in 150 currencies at a real-time exchange rate at no charge via debit cards Is known.
The startup’s CEO and cofounder Nick Storonsky played an impending public bow during a town hall meeting last month, according to two sources familiar with the matter.
Storonsky was asked about the company’s public ambitions during the meeting, where he noted that market conditions were poor for such a move and that Revolut would wait at least two more years.
Revolt declined to comment when contacted by Insider.
The company hasn’t set a definitive timeline on any listing plans yet, but has previously talked about the need to dramatically increase its revenue before it goes to market. Storonsky told Bloomberg during a TV interview in September, “Revolute should be at least “in the range of a few billion dollars in revenue.”
The fintech reported a 57% increase in 2020 adjusted revenue to £261 million ($325.8 million), according to its most recent accounts. Revolut competes with other challenger banks such as Monzo, Starling Bank and N26 in Europe – and with offerings such as Chime in the US.
2021 was a record year for IPOs, with dating app Bumble, Asian delivery startup Grab, and Rivian all going public. While the unprecedented demand for public listings hasn’t continued into 2022, the global IPO market closed just 321 deals in the opening quarter of the year, according to an analysis by EY. The slowdown in listing has been attributed to factors such as geopolitical tensions and volatility in the stock market, as well as a correction in overvalued stocks.
According to data from Renaissance Capital Research, the group’s performance in the 2021 IPO has been poor with the shares trading down 20% on their issue price. This includes the dismay in the fintech world with major declines from the much-hyped listings of companies such as Robinhood, Wise and Marketa.
VC investors, especially late-stage and crossover funds, are concerned about bloated valuations for private market companies, which have grown in record multiples during the COVID-19 pandemic. The scale of the issue was highlighted last month when Instacart slashed its own valuation by 40% to $24 billion in an unusual reaction to the unrest in the public markets.
Revolut will be eager to avoid a similar fate to stock trading app Robinhood, which has seen its valuation fall more than 70% to $8.74 billion since going public in July.
“None of us want to be in the position of Robinhood employees, so we are happy to hang tight,” an early Revolut employee told Insider on condition of anonymity.
Robinhood lost $3.89 billion last year and recently took 9% of its workforce public at a $32 billion valuation, potentially offering a warning to late-stage businesses that may still be making losses. push to go public.
Two early investors and one early employee in Revolut highlighted the need for the company to improve its offering in the lending market before the fintech considers a public launch.
Storonsky recently said that lending, particularly mortgages, would be a focus in the near term and also pointed out that home loans are “an important part of consumer financial life,” Reuters reported.
An early reverse investor told Insider that the company should be in “no rush” to list current market conditions and the relatively poor performance of recent UK IPOs such as THG, Deliveroo and Wise to move too quickly. exposed as a warning against. The company is also making progress in the US market, with plans set for more than one million users there, while the startup recently partnered with US embedded finance provider Cross River to offer stateside loans.
