Revolut CEO Strikes Multi-Billion Deal Pegged on $150B Valuation Ahead of IPO

Revolut CEO Nikolay Storonsky has negotiated a multi-billion deal that could see his stake in the UK fintech increase significantly, Yahoo Finance reported. Storonsky’s latest deal is pegged on his ability to triple the company’s valuation. The last valuation of the company was $45 billion and the fintech has been mulling the Revolut IPO,

Significant Control

Storonsky founded Revolut back in 2015. The latest annual report shows that the founder holds over 25% stake in the business through direct and indirect shareholdings following changes in the company’s ownership structure.

Previously, Storonsky was listed as the individual with significant control in Revolut with no one else holding more than a quarter of the company. The new deal offers the CEO additional shares in fintech if Revolut’s market valuation hits the $150 billion mark. Eventually, these shares could be equal to an additional 10% stake in the digital finance and banking company. The deal is designed to pay out the stakes in stages.

The latest deal was organized just before the fintech company closed its 2021 funding round. This funding round saw Revolut establish itself as the most valuable British fintech with a $33 billion valuation. Currently, Revolut is Europe’s most valuable fintech private company.

Elon Musk’s Footsteps

Storonsky’s latest deal is very similar to the deal that Elon Musk struck with Tesla back in 2017. In the deal, Musk was offered 12 varying stock options if the company attained specific market and financial targets. Although the deal was approved by shareholders in 2018, prominent investors like the sovereign wealth fund of Norway and the California state teachers’ retirement system.

Since the deal got approved, one investor has sued Musk claiming that the package was unfair and that the Tesla board was misled. Last December, a US judge ruled that Musk did not qualify for the $56 billion compensation package. If challenged, Storonsky’s deal could face similar challenges in future if it experiences similar headwinds.

Originally, Revolut issued a pre-paid card that offered free currency exchange to customers. Over the years, the company has grown gradually to serve customers in over 36 countries, offer more than 50 products and services, and employ more than 10,000 employees. Revolut also offers money transfer services, buy now pay later credit, home rentals, wage advance, crypto trading, and e-sims for mobile data plans.

Regulatory Challenges

An annual report released in April showed that the company grew its 2024 profits by 150% after it hit the £1 billion mark. This profit growth was attributed to increased revenue from the company’s crypto and wealth trading divisions and the rise in subscriptions.

Revolut investors are eagerly waiting for the fintech company to announce its initial public offering. In the UK, City bankers and politicians are working hard to convince the Revolut CEO that London is the best place to host the fintech’s primary list.

Revolut acquired a UK banking licence in 2024 after waiting for three years. At the time, the company experienced challenges convincing UK regulators that it had regulatory breaches and fixed accounting issues. It also faced reputational challenges that included an aggressive corporate culture.

In 2016, Revolut’s business was investigated by the UK Financial Conduct Authority (FCA) following claims that the company was not conducting sufficient money-laundering checks and failing to flag suspect payments adequately. The regulator completed the investigation in 2017 and the company is looking to get full approval this year.