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Revolut, the British-based banking and payments app, will on Thursday become the most valuable fintech company in British history when it unveils a fundraising that makes it worth $33bn.

Sky News has learnt that Revolut will announce that it has raised $800m (£577m) in a funding round led by SoftBank’s Vision Fund and Tiger Global Management, two of the world’s most prolific investors in fast-growing tech businesses.

The deal will transform Revolut into one of the most valuable fintech companies ever launched in Europe.

It will confirm a Sky News report earlier this month which a Revolut spokeswoman said was “not true” and “premature”.

SoftBank’s inaugural Vision Fund, which backed companies including Uber Technologies, owner of the ride-hailing platform, the buy-now-pay-later platform Klarna, had held discussions with Revolut in the past but failed to reach a deal.

Revolut’s potential valuation is staggering given that shareholders had been primed to expect its next capital-raising to value it at somewhere between $10bn and $15bn as recently as three months ago.

Sky News reported the $10bn-$15bn aspiration in mid-April, while Bloomberg News reported last month that a deal could see Revolut valued at more than $20bn.

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Only last year, Revolut raised money from the US-based investors TCV and TSG Consumer Partners at a valuation of $5.5bn (£3.98bn).

The new talks would mean the digital bank is now worth six times more than it was a year ago – after seeing its losses double.

Klarna’s recent fundraising, which saw it valued at $45.6bn, is said to have been a factor in Revolut’s ability to target a far higher valuation.

The latest developments will fuel questions about the ability of loss-making technology companies to attract price tags in excess of all but the largest publicly listed companies.

Even at the lower end of its mooted $30bn-$40bn range, Revolut would be worth more than almost three-quarters of the companies in London’s FTSE-100 index.

A global wave of investor interest in public and private tech companies has propelled valuations to record highs – fuelled in part by the recent deluge of US-listed special purpose acquisition companies (SPACs).

Nik Storonsky, the company’s founder and chief executive, said recently that the company was in the early stage of talks about raising further funds while pointing out that it was not in need of additional capital.

In May, Revolut disclosed losses in 2020 of just over £200m as its rapid growth saw staff costs increase substantially.

It said it was profitable in the final two months of the year.

Mr Storonsky would become a paper billionaire several times over if the latest fundraising talks are successful.

Revolut, which now has a presence in 35 countries and more than 15 million customers, is in the process of applying for a UK banking licence that will allow it to take deposits in its home market.

It is chaired by the City veteran Martin Gilbert, while the former Goldman Sachs International co-chief executive Michael Sherwood also sits on its board.

The company recently introduced an equity participation plan for its 2200 employees, which would see their stakes worth substantial sums at the latest valuation.

It has struggled with significant compliance issues and wave of executive departures but is said to be confident that it has largely addressed historic flaws in its systems.

Mr Storonsky recently said he was working on expansion plans that included India, Latin America and South Korea.

The current fundraising talks are likely to spur speculation about when – and where – Revolut might eventually choose to become a public company.

Rishi Sunak, the chancellor, has backed a series of proposals to improve the UK’s listings regime for fast-growing tech companies.

A review by Ron Kalifa, the former Worldpay chief, recently recommended changes to UK listing rules and a new growth fund to help ensure Britain’s leadership in the global fintech industry.

The UK’s other highly valued fintechs include Wise, the payments service, which is about to list in London with a valuation of well over £5bn.

FT Partners, the US-based fintech-focused investment bank which recently advised the French insurer Mollie on an $800m fundraising valuing it at $6.5bn, is overseeing Revolut’s latest capital-raising.

Revolut has been contacted for comment.

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Lloyds Banking Group in talks to buy digital wallet provider Curve

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Lloyds Banking Group in talks to buy digital wallet provider Curve

Britain’s biggest high street bank is in talks to buy Curve, the digital wallet provider, amid growing regulatory pressure on Apple to open its payment services to rivals.

Sky News has learnt that Lloyds Banking Group is in advanced discussions to acquire Curve for a price believed to be up to £120m.

City sources said this weekend that if the negotiations were successfully concluded, a deal could be announced by the end of September.

Curve was founded by Shachar Bialick, a former Israeli special forces soldier, in 2016.

Three years later, he told an interviewer: “In 10 years time we are going to be IPOed [listed on the public equity markets]… and hopefully worth around $50bn to $60bn.”

One insider said this weekend that Curve was being advised by KBW, part of the investment bank Stifel, on the discussions with Lloyds.

If a mooted price range of £100m-£120m turns out to be accurate, that would represent a lower valuation than the £133m Curve raised in its Series C funding round, which concluded in 2023.

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That round included backing from Britannia, IDC Ventures, Cercano Management – the venture arm of Microsoft co-founder Paul Allen’s estate – and Outward VC.

It was also reported to have raised more than £40m last year, while reducing employee numbers and suspending its US expansion.

In total, the company has raised more than £200m in equity since it was founded.

Curve has been positioned as a rival to Apple Pay in recent years, having initially launched as an app enabling consumers to combine their debit and credit cards in a single wallet.

One source close to the prospective deal said that Lloyds had identified Curve as a strategically attractive bid target as it pushes deeper into payments infrastructure under chief executive Charlie Nunn.

Lloyds is also said to believe that Curve would be a financially rational asset to own because of the fees Apple charges consumers to use its Apple Pay service.

In March, the Financial Conduct Authority and Payment Systems Regulator began working with the Competition and Markets Authority to examine the implications of the growth of digital wallets owned by Apple and Google.

Lloyds owns stakes in a number of fintechs, including the banking-as-a-service platform ThoughtMachine, but has set expanding its tech capabilities as a key strategic objective.

The group employs more than 70,000 people and operates more than 750 branches across Britain.

Curve is chaired by Lord Fink, the former Man Group chief executive who has become a prolific investor in British technology start-ups.

When he was appointed to the role in January, he said: “Working alongside Curve as an investor, I have had a ringside seat to the company’s unassailable and well-earned rise.

“Beginning as a card which combines all your cards into one, to the all-encompassing digital wallet it has evolved into, Curve offers a transformative financial management experience to its users.

“I am proud to have been part of the journey so far, and welcome the chance to support the company through its next, very significant period of growth.”

IDC Ventures, one of the investors in Curve’s Series C funding round, said at the time of its last major fundraising: “Thanks to their unique technology…they have the capability to intercept the transaction and supercharge the customer experience, with its Double Dip Rewards, [and] eliminating nasty hidden fees.

“And they do it seamlessly, without any need for the customer to change the cards they pay with.”

News of the talks between Lloyds and Curve comes days before Rachel Reeves, the chancellor, is expected to outline plans to bolster Britain’s fintech sector by endorsing a concierge service to match start-ups with investors.

Lord Fink declined to comment when contacted by Sky News on Saturday morning, while Curve did not respond to an enquiry sent by email.

Lloyds also declined to comment, while Stifel KBW could not be reached for comment.

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UK economy figures not as bad as they look despite GDP fall, analysts say

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UK economy figures not as bad as they look despite GDP fall, analysts say

The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.

A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).

Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.

It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.

A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.

This was borne out by other figures released by the ONS on Friday.

Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.

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Overall, there was a “large rise in goods imports and a fall in goods exports”.

A ‘disappointing’ but mixed picture

It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.

“I am determined to kickstart economic growth and deliver on that promise”, she added.

But the picture was not all bad.

Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.

It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.

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The expansion in March means the economy still grew when the three months are looked at together.

While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.

Such a cut would bring down the rate to 4% and make borrowing cheaper.

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Is Britain going bankrupt?

Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.

“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.

Why did the economy shrink?

The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.

The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.

It made up for a “very weak” month for retailers, the ONS said.

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UK economy remains fragile – and there are risks and traps lurking around the corner

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UK economy remains fragile - and there are risks and traps lurking around the corner

Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.

However, the picture emerging a year since the election of the Labour government is not hugely comforting.

This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.

Output shrank in May by 0.1%. That followed a 0.3% drop in April.

Ministers were celebrating a few months ago as data showed the economy grew by 0.7% in the first quarter.

Hangover from artificial growth

However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.

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In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.

Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.

Signs of recovery

Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.

“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.

Meanwhile, the services sector eked out growth of 0.1%.

A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.

Struggles ahead

It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.

The economy remains fragile, and there are risks and traps lurking around the corner.

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Is Britain going bankrupt?

Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.

Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.

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