Revolut crowdfunders to cash in on extended secondary share sale
Some of Revolut’s earliest investors will be offered the chance to cash in on the fintech giant’s latest secondary share sale in a move that has staved off potential legal action, Morning Wire can reveal.
The British banking company has opened up the next phase of its sale to early stage investors, including those holding stock through start-up investment platforms Republic Europe and Crowdcube.
Nearly 3,500 Republic users and around 400 Crowdcube users will be given the opportunity to sell down their holdings at a price of $865.42 per share, Revolut said in letters to investors.
Shareholders using Republic and Crowdcube, some of whom are now likely millionaires on paper, have collectively been allocated up to $9.1m and $10.2m respectively as part of the wider sale coordinated by Morgan Stanley that values Revolut at $45bn.
Revolut has extended the sale that was initially limited to current employees this summer, saying it “continued to attract demand from investors”.
Former staff are now eligible to participate, while some of Revolut’s other early investors are reported to have offloaded at least $300m in a transaction backed by wealthy Goldman Sachs clients.
“We appreciate how long you have all been on this journey with us, and are delighted we get to recognise some of your support through this process,” Revolut told early backers.
Crowdcube users are sitting on a 400 times return after buying into Revolut for $2.14 per share in a 2016 crowdfunding round, when the company was just a year old.
The extension draws a line under a years-long dispute between Revolut and Republic over the sale of shares owned by investors who participated in a 2017 fundraise through the platform, then known as Seedrs.
Republic had considered taking legal action after claiming Revolut moved to block a deal through its platform that would have seen a US private equity firm scoop up shares at a 32 per cent discount to the Morgan Stanley sale, Morning Wire previously reported.
Jamba Europe, a small UK company effectively owned by New York-based HOF Capital, agreed to buy £4.5m worth of shares via Republic at the start of November.
Revolut is understood to have rejected Republic’s argument that Jamba was allowed to buy the shares under the fintech’s articles of association as it already held stock through the platform, given it was taken over by HOF just two weeks before launching the offer.
Republic users accused HOF of taking advantage of a lack of liquidity on the secondary market to grow its stake, while further criticism was levelled at communications advertising the planned sale – which has now been cancelled.
“As we said all along, our goal has been to facilitate liquidity for these holders. Jamba’s offer was the best deal that was available at the time, and I’m glad we made it available,” Jeff Lynn, Republic Europe’s chair, told Morning Wire.
“Now that a higher-priced offer is on the table, we’re thrilled to be able to make that available instead.”
Revolut declined to comment beyond its communications with shareholders. HOF did not respond to a request for comment.