Revolut

Shakin_Steve

Revolut now worth more than Nat West, according to the BBC:

Revolut becomes most valuable UK start-up after £24bn valuation https://www.bbc.co.uk/news/business-57854969

colsten

They should be able to "buy" a proper banking licence and a decent CS organisation then?

greyteam1959

colsten said:

They should be able to "buy" a proper banking licence and a decent CS organisation then?

But that would cost them some of their ridiculous valuation.
🤔🤔

[Deleted User]

I thought they were applying for a banking license?

colsten

Yes they have applied several months ago.

WillPS

Ludicrous valuation.

jbrassy

I'm not a fan of Revolut and I'm in no position to say whether $33bn is an appropriate valuation. However, what a lot of people miss when it comes to these tech company valuations is that it comes down to risk and reward.

Revolut is a far riskier business to invest in compared to Natwest (RBS) since its a relatively new business. This risk is therefore reflected in its valuation as investors wish to get rewarded for the additional risk they take on. Investors invest in Revolut in the hope that it will become an established financial institution like RBS. 

Although Revolut is worth a lot today, this is subject to change quite dramatically (see WeWork as a recent example). I know some people are going to say RBS nearly collapsed a few years ago so aren't they just as risky? The answer is no because they are too big to fail and the investors take account of this moral hazard when investing in RBS. It's unlikely that Revolut would be bailed out by the Government if it was on the brink of failure.