Revolut hires JP Morgan to manage $500m funding round and issue a $1b loan
Challenger bank Revolut has hired investment bank JP Morgan to conduct its $500 million funding round and issue it a $1 billion convertible loan, which will turn into shares if Revolut receive a US banking licence.
Sky News sources revealed that Revolut is trying to achieve a new valuation of between $5 billion and $10 billion from the capital-raising, which could make it the most valuable fintech in Europe if it hits $10 billion, ahead of Monzo, Transferwise, Klarna and N26.
Currently the most valuable fintech in Europe is Adyen, a Netherlands-based data analytics firm valued at $8.3 billion.
It is not clear yet which of Revolut’s existing partners will be participating in the round. The challenger’s most recent partnership with Visa will see it expand to 24 new countries, as well as seeing it hire 3,500 new staff.
Having accumulated almost eight million customers since it was founded five years ago, and now on track to have raised almost $2 billion in its lifetime if it secures the full $1.5bn from investors, Revolut is fast-becoming the top UK-based challenger bank.
However such exponential growth, with the bank quadrupling its revenue in 2018 and saying it will triple it again this year, comes greater regulatory warnings.
The Bank of England’s Prudential Regulation Authority has targeted faster-growing companies in the UK like Revolut, requiring them to have more rigorous stress-testing and prove evidence of greater challenges by board members to business strategy.
Revolut is also undergoing a significant management restructure, following accusations of alleged links to the Kremlin.
Currently gearing up to announce its new chairman Martin Gilbert, vice chairman of Standard Life Aberdeen, the challenger has also lined up former boss at Goldman Sachs, Michael Sherwood, and has already hired a senior executive from Metro Bank.