Venture capital firm Molten Ventures downgraded its stake in Revolut, the second investor to do so as the British fintech company awaits regulators’ decision on whether to offer it a banking license in its home market.
Molten Ventures, formerly Draper Esprit, invested £7.1m in the fintech in 2018. In its annual results released on Thursday, it said it cut the value of its investment to £54.5m in the year to March 31, down from £40. . A decrease percentage from the previous evaluation.
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 £5.4m from 31 December 2022, down 46 per cent year-on-year.
Revolut was valued by investors at $33 billion in July 2021, making it the most valuable private technology group in the UK ahead of Checkout.com’s $40 billion valuation in January 2022.
The fintech has been waiting for UK regulators to grant it a banking license since January 2021, a process that usually takes less than a year. Obtained its European banking license in Lithuania in December 2021.
In May, CEO Nick Storonsky told the Financial Times that the banking crisis had made regulators “more cautious” and was to blame for delays in licensing.
This year has proven to be a painful one, with departures including the Bank of England’s chairman and chief financial officer, clashes with investors over share classes and a qualified review from BDO, which said it could not fully verify two-thirds of its revenue.
It previously faced questions about company culture, which led to the FCA’s investigation in 2021, while a review of risk management and compliance systems in 2020.
Molten Ventures’ decision stems from industry guidelines around valuations that consider factors such as revenue multiples rather than specific concerns about licensing or other issues, according to people familiar with the company.
Revolut and Molten Ventures declined to comment.
Tech companies that have garnered stellar valuations during the coronavirus pandemic, when prices were low and cash was cheap, faced an all-out reckoning as rising inflation and slumping consumer sentiment made investors more cautious about how they allocate their money.
Klarna, the Swedish payments company, was forced to drop its price from $47 billion to less than $7 billion in a private financing round last July. Public fintech companies have also suffered, with Nasdaq-listed Affirm down more than 85 percent from its January 2021 debut.
