Venture capital firm Molten Ventures slashed the valuation of its stake in Revolut, the second investor to do so, as the UK fintech awaits a decision from regulators on whether to offer it a banking license in its home market.
Molten Ventures, formerly Draper Esprit, invested £7.1m in fintech in 2018. In its annual results, released on Thursday, the company said it had pared the value of its investments to £54.5m for the year to March 31, a 40% drop from its last valuation.
It follows a similar move by asset manager Schroders, which announced in April that it had reduced the value of its stake in Revolut to £5.4m by 31 December 2022, down 46% year-on-year. %.
In July 2021, investors last valued Revolut at $33 billion, making it the UK’s most valuable private tech group, while Checkout.com was valued at $40 billion in January 2022.
Since January 2021, the fintech company has been waiting for UK regulators to grant it a banking license, a process that usually takes less than a year. It received a European banking license in Lithuania in December 2021.
In May, chief executive Nik Storonsky told the Financial Times that the banking crisis had made regulators “extremely cautious” and was to blame for the delay in licensing.
This year has proven to be a scarred one, with departures including its Bank of England governor and chief financial officer, clashes with investors over share classes and BDO’s qualified audit saying it could not fully verify two-thirds of its income.
It has previously faced questions about its corporate culture, which led to an investigation by the Financial Conduct Authority in 2021, while its risk management and compliance systems were reviewed in 2020.
Molten Ventures’ decision stemmed from industry guidance around valuations, which considered factors such as revenue multiples, rather than specific issues related to licensing or other issues, according to people with knowledge of the company.
Revolut and Molten Ventures declined to comment.
Tech companies that commanded stunning valuations during the coronavirus pandemic, when interest rates are low and cash is cheap, face a sweeping reckoning as rising inflation and falling consumer confidence make investors more cautious about how they allocate their money.
Swedish payments company Klarna was forced to slash its price from $47 billion to less than $7 billion in a private funding round last July. Public fintechs have also been affected, with Nasdaq-listed Affirm down more than 85% since its January 2021 debut.