Nikolay Storonsky, the CEO of Revolut, one of the UK’s most successful FinTech firms, said he will choose the US over the UK for its IPO.
Speaking on the 20VC Podcast, Storonsky said that unless London dramatically changed its offering to companies seeking to raise capital on public markets, he would list Revolut in the US.
“I just don’t understand how the product which is being provided by the UK can compete with the product provided by the US,” Storonsky said in the podcast interview.
Storonsky highlighted the UK’s 0.5% Stamp Duty as one of the main reasons behind his preference for New York over London, but in reality, there is a multitude of well-documented factors making the US more attractive than the UK when planning a large-scale IPO.
Labour’s Rachel Reeves has had the chance to scrap the much-criticised stamp duty on UK shares but has chosen not to act. The result is that global innovators and leading growth companies such as Revolut are shunning the UK for the US.
Losing out on the Revolut IPO to New York will be another major blow for London after Revolut started life in the UK, raising two early crowdfunding rounds on Crowdcube and Seedrs platforms.
Following a recent secondary share sale, investors who backed the FinTech company in its early private rounds on crowdfunding platforms saw a valuation uplift of around 40,000% on their initial investment. Investments of just a few thousand pounds are now worth over a million.
The latest share sale values Revolut at $45bn, more than the current NatWest and Lloyds market caps and roughly the same as Barclays.
Revolut has raised over $2.14bn and is not having trouble attracting new investors. The latest share sale was met with strong demand from institutions, which bodes well for an IPO.
It’s no surprise that Revolut CEO Nikolay Storonsky is choosing New York over London for its IPO. The UK hasn’t managed an IPO of any meaningful size for well over a year, and the UK public equity market is being picked apart by overseas firms swooping in on undervalued companies.
Why would the FinTech company battle to justify its valuation in London when US investors would likely welcome the company with open arms and give it the valuation it deserves?
Although Revolut started life in the UK, it has expanded aggressively and operations in 39 countries with ambitions to increase this to 50 over the next three years. Of the 39 countries the company is currently operating in, Revolut is number one in 19 of them. The company hasn’t yet won in the US market as in other markets, but Storonsky has the world’s largest economy firmly in his sights for the next chapter of growth.
Revolut reported revenues of $2.2bn in 2023, generating a record $545m profit before tax.
When asked where he would base the business if he were hypothetically given a chance to start Revolut again, he answered he would have set the company up in the US.