Revolut has entered into an agreement with its largest investor, SoftBank, to simplify the fintech’s ownership structure, paving the obstacles towards obtaining a banking license in the United Kingdom, Financial Times reported.
The London-headquartered fintech applied for the UK banking license in 2021. However, despite the long delay, there is no sign for the fintech to receive the much-anticipated license. Although Revolut operates in the European Union with a Lithuanian banking license, it cannot use that as a substitute instead of a license for the UK, its largest market, following Brexit
Brexit
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis
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The Bank of England made Revolut’s six classes of shares as one of the roadblocks against granting a banking license. The fintech
Fintech
Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl
Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl
Read this Term had many share classes due to its numerous funding rounds.
A Long Negotiation with Investors
According to the three anonymous sources of the report, Revolut and Softbank have been discussing the ownership change for months, initially codenamed “Project Swan”. The Japanese investor demanded hefty compensation in exchange for its priority class of shares. The report detailed that Softbank initially demanded twice the amount of common stocks to give up its preferential rights.
The agreement between the two firms does not include any new issuance of “top-up” shares for SoftBank. Further, it will not have any financial impact on the company.
Apart from Softbank, other investors of Revolut, including Tiger Global Management, venture capital firm TCV, Balderton Capital, and Ribbit Capital, have either agreed or are in talks to transfer their preferential shares in a single class.
Revout currently operates in the UK with a payments license obtained from the Financial Conduct Authority (FCA), which also needs to sign off the approval for its banking license. If the banking license is approved, Revolut can expand into lending products and offer protection of customers’ funds under the UK’s deposit insurance scheme.
The UK fintech is additionally seeking a banking license in the United States. However, a recent report revealed that the fintech is yet to formally submit its application for the banking charter in the country.
Meanwhile, the FCA is investigating Revolut for allegations that it permitted funds to be withdrawn from accounts that had been flagged as suspicious by the National Crime Agency, Finance Magnates reported.
Revolut has entered into an agreement with its largest investor, SoftBank, to simplify the fintech’s ownership structure, paving the obstacles towards obtaining a banking license in the United Kingdom, Financial Times reported.
The London-headquartered fintech applied for the UK banking license in 2021. However, despite the long delay, there is no sign for the fintech to receive the much-anticipated license. Although Revolut operates in the European Union with a Lithuanian banking license, it cannot use that as a substitute instead of a license for the UK, its largest market, following Brexit
Brexit
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis
Read this Term.
The Bank of England made Revolut’s six classes of shares as one of the roadblocks against granting a banking license. The fintech
Fintech
Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl
Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl
Read this Term had many share classes due to its numerous funding rounds.
A Long Negotiation with Investors
According to the three anonymous sources of the report, Revolut and Softbank have been discussing the ownership change for months, initially codenamed “Project Swan”. The Japanese investor demanded hefty compensation in exchange for its priority class of shares. The report detailed that Softbank initially demanded twice the amount of common stocks to give up its preferential rights.
The agreement between the two firms does not include any new issuance of “top-up” shares for SoftBank. Further, it will not have any financial impact on the company.
Apart from Softbank, other investors of Revolut, including Tiger Global Management, venture capital firm TCV, Balderton Capital, and Ribbit Capital, have either agreed or are in talks to transfer their preferential shares in a single class.
Revout currently operates in the UK with a payments license obtained from the Financial Conduct Authority (FCA), which also needs to sign off the approval for its banking license. If the banking license is approved, Revolut can expand into lending products and offer protection of customers’ funds under the UK’s deposit insurance scheme.
The UK fintech is additionally seeking a banking license in the United States. However, a recent report revealed that the fintech is yet to formally submit its application for the banking charter in the country.
Meanwhile, the FCA is investigating Revolut for allegations that it permitted funds to be withdrawn from accounts that had been flagged as suspicious by the National Crime Agency, Finance Magnates reported.