Dublin-listed Revolut investor cuts value of digital bank by 40%

Molten Ventures, a Dublin and London-listed tech investment company formerly known as Draper Esprit, has written down its stake in Revolut by 40 per cent after a challenging period for the fintech.

In annual results published on Thursday the venture capital firm, which holds a 5 per cent stake in the digital challenger bank, said it valued its shareholding in Revolut at £54.5 million (€63.6m) at the end of March, down from £91.3 million (€106.6m) at the end of March 2022. Molten’s release gave no explanation for the reduction, but it comes after a difficult few months for Revolut in which several investors have written down their investment in the company. Both Molten and Revolut were approached for comment.

Revolut was publicly valued at $33 billion (€30.2bn) in 2021 after SoftBank and Tiger Global Management led an investment round, but its value is likely to have deflated substantially since then in line with the wider tech sector. Molten’s writedown implies a value closer to $19.8 billion (€18.1bn), still substantially higher than the $15 billion value placed on the company by one of its investors, a UK trust run by asset manager Schroder, in April.

While long-delayed accounts published early this year showed the fintech firm made its first annual profit in 2021, its auditor, BDO, said it was unable to satisfy itself on the “completeness and occurrence” of almost three-quarters of Revolut’s revenue in 2021.

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Reports in the UK press in recent weeks have also indicated that City of London regulators may not approve Revolut’s application for a UK banking licence on foot of BDO’s concerns about the fintech’s balance sheet.

Molten, meanwhile, sunk to a £243.4 million loss in the year to the end of March, according to the results, down from a profit of more than £300 million in the previous year as tech valuations dropped back after a Covid-induced boom.

Realisations for the period were £48 million, said chief executive Martin Davis in his foreword to the results, compared with £126 million in 2022, “against a backdrop of continued weak trade sales, a slowdown in M&A, and the IPO market being effectively closed for business”.

“While macroeconomic headwinds continue to drive uncertainty in the European venture capital industry, we note that public markets are beginning to show initial signs of stabilisation and believe that private sector valuations are likely to follow.”

Mr Davis said Molten is “cautiously optimistic” for the year ahead.

Revolut has more than 2 million retail customers in the State, all of whom have access to Irish Ibans. It recently said more than 5,000 businesses in the Republic had joined its platform within the past year.