While it is likely the UK’s most valuable privately owned financial services group will wait for clearer skies above stock markets, the building blocks are being moved into place for a Revolut IPO. Reports today indicate the London-based payments app company is hiring an investor relations team, which is usually a strong indicator of an IPO on the horizon. The fintech is advertising for a head of investor relations with public company experience and one or two additional IR professionals to join a new team.
Market sentiment towards high growth technology companies may not currently be optimal for a Revolut IPO. But the app-based financial services company, which is headquartered in London, is moving the pieces into place. Presumably with a view to pulling the trigger on a public listing when market conditions improve.
Revolut last raised $800 million of growth capital in a private investment round in July 2021 that valued the company at $33 billion. That should mean it is in a relatively strong financial position for the time being and able to wait for the right moment to move ahead with an IPO. However, the company is obviously keen to have lined up its ducks in readiness for a swing back towards positive investor sentiment.
Revolut’s new IR team will act as a contact point between the company and investment community as well as preparing public materials and presentations on the company. The head of the new department should have, says the ad, experience with a fast-growing public company and at least seven years of background as a financial markets analyst or other investment banking role.
Revolut provides app-based retail and corporate financial services like money transfers and currency exchange services. It recently applied for a UK banking license, presumably with the intention of offering retail banking services such as current and savings accounts and consumer loans products.
Having raised close to $1 billion in growth capital last summer and expected to announce a first ever profit when it publishes results for the 2021 financial year, the start-up is not believed to be in urgent need of funds. That should allow it the luxury of timing an IPO, or any new fundraising activities, to coincide with more positive investor sentiment for growth companies that is the case at present.
However, an IPO has been considered as on the horizon since last year when former Standard Life Aberdeen joint chief executive Martin Gilbert was appointed as chairman. Michael Sherwood, a former joint chief executive of Goldman Sachs’s UK business has also joined the board as it is beefed up with figures with experience of public markets. While a Revolut spokesperson recently said an IPO “probably” won’t take place this year, the company clearly wishes to be ready to launch one at relatively short notice.
Founded in 2015, Revolut started life as a more cost efficient way for retail users to transfer money internationally at much lower cost than via a traditional bank. It’s also popular for cheap, efficient peer-to-peer cash transfers in the same currency and has added several other financial services products in recent years from cryptocurrency trading to consumer loans and some types of insurance. It is said to be considering new “buy now, pay later” credit and salary advance products.
The start-up has around 18 million retail users, about 150,000 business customers and processes roughly 150 million transactions a month.
Swedish-fintech rival Klarna, whose core product is “buy now, pay later” financing of retail purchases has recently announced plans to cut around 10% of its 7000-strong workforce. It is also said to be trying to raise fresh capital at a valuation of $33 billion, which would represent a significant down round after achieving a $46 billion valuation while raising funds last June.
Revolut is, by contrast, hiring new team members. It currently employs around 3500 staff and is trying to fill about 250 vacancies. It is not believed to have any urgent need to raise fresh capital.