Revolut Valuation up 45%: Schroders’ and the Fintech Climate

Schroder, shareholder of Revolut Ltd., believes the company to be 45% more valuable compared to a year ago, indicating a growing interest among investors in the fintech sector. 

Global investment in fintech nosedived in 2023, plunging to a five-year low of US$113.7bn, according to KPMG’s Pulse of Fintech report. This year is widely hoped to be a turnaround year for fintech investment.

According to the recent Bloomberg report, although Schroders’ stake in Revolut is relatively small, its recent writeup suggests that Revolut’s valuation has climbed to US$25.7bn, up from US$17.7bn last year but still below its US$33bn valuation in a 2021 funding round. Schroders noted in its annual report that Revolut has made significant progress over the past year, citing its ambitious international expansion as a key factor in reassessing its stake.

In March, Schroders Plc’s investment trust disclosed a £2.45m (US$3.06m) writeup for its Revolut holding, bringing the valuation of the stake to £7.88m (US$9.82m) as of December 31, compared to £5.44m (US$6.78m) a year earlier. This revaluation reflects Revolut’s solid performance despite concerns about the impact of higher interest rates on profitability, which have affected many fast-growing finance firms.

Revolut and the fintech sector

Revolut’s delayed 2022 accounts, published in December, revealed revenue growth to just over US$1bn. The London-based company continues to attract about a million new customers monthly while awaiting a decision on its long-awaited UK banking license, which would enable it to expand its services in its home market. 

Revolut has also recently announced the launch of an AI-based, advanced scam-detection feature to help protect its customers from malicious card scams. Its new feature can detect when a customer is being scammed, breaking the ‘spell’ of the scammer before money can be sent to the criminal. 

Although Revolut declined to comment on the Schroders figures, the investment trust invests in various finance, science, and technology companies. One of its significant holdings, UK fintech Atom Bank, experienced a 27% write-down following a funding round last year at a lower valuation. Nonetheless, Schroders remains optimistic about Atom Bank’s future prospects, viewing the recent investment as a positive indicator of confidence in the company’s growth potential and operational efficiency.

Schroders plc is a British multinational asset management company headquartered in London. Revolut is a global neobank and financial technology company with headquarters in London, UK that offers banking services for retail customers and businesses.

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