Equity holders of leading digital bank Revolut may soon have the opportunity to sell some of their shares.
According to Bloomberg, former employees who have held shares for more than 2 years and have over $100,000 in value may be able to sell up to 5% of their shares. The share sale may also include shareholders who participated in early funding rounds on securities crowdfunding platforms – Republic Europe (neé Seedrs) and Crowdcube.
The report explains that following the move by Revolut founder and CEO Nik Storonsky to sell some of his shares, others will be offered a similar deal. In a memo seen by Bloomberg, a share sale is anticipated on Shareworks, a Morgan Stanley platform, next summer.
According to Republic Europe’s Secondary Market, early investors via its platform have seen an indicative return of over 5000%. This shows a valuation of £27.9 billion, but Revolut’s current valuation may be higher than $45 billion (over £35 billion).
A report by CityAM provides additional insight into the process, claiming more than 3,500 investors using Republic may sell equity at a share value of $865.42 per share. These shareholders are being allocated $9.1 million as part of the broader share sale deal.
The same report notes that Republic was weighing legal action against Revolut after it blocked a sale to Jamba Europe, an entity controlled by VC HOF Capital in New York, that sought to purchase shares on Republic Europe’s Secondary Marketplace. Jamba apparently sought to acquire £4.5 million of shares via Republic. The share purchase was eventually canceled, as the UK Financial Conduct Authority took umbrage to the act which was said to require regulatory approval. Jamba had intended to purchase Revolut shares for £407.86/each.
Seedrs founder Jeff Lynn, now Chair of Republic Europe, is quoted in the report as thrilled with the higher per-share sale for investors using the Republic Europe platform.
The entire odyssey highlights the pressing issue of enabling liquidity for private securities – especially with the advent of investment crowdfunding platforms that allow smaller (retail) investors to participate in the asset class. Venture Capital is typically not for the impatient, but technology can facilitate markets in private securities – even illiquid shares. While many observers expect Revolut to become a publicly traded firm in the not-so-distant future, some investors desire an exit before shares are traded on an exchange – or being acquired.
The FT reported in August that the UK government had reached out to Revolut to encourage the Fintech to go public on a UK exchange rather than the larger US market. The UK has recently sought to improve listing conditions in the country to make it more competitive globally while encouraging younger firms to make shares available to a broader audience.
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