Revolut extends secondary sale to thousands of earliest investors, including Republic users

Revolut's earliest investors are set to have the opportunity to capitalise on the fintech giant's latest secondary share sale, a move that has averted potential legal action, as revealed by City AM.

The British banking firm has initiated the next phase of its sale for early stage investors, including those who hold stock via start-up investment platform Republic Europe.

Nearly 3,500 Republic users will be offered the chance to sell their holdings at a rate of $865.42 per share, according to a letter from Revolut to its investors. These shareholders, some likely paper millionaires, have collectively been allocated up to $9.1m as part of the broader sale coordinated by Morgan Stanley, valuing Revolut at $45bn.

Revolut has expanded the sale, initially limited to current employees this summer, citing continued investor demand. Former staff are now eligible to participate, while some of Revolut’s other early investors are reported to have sold at least $300m in a transaction backed by affluent 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 stated in its letter to Republic users. This marks the end of a years-long disagreement between Revolut and Republic over the sale of shares owned by investors who participated in a 2017 crowdfunding through the platform, then known as Seedrs.

Republic had contemplated legal action, alleging that Revolut obstructed a deal on its platform that would have allowed a US private equity firm to acquire shares at a 32 per cent discount to the Morgan Stanley sale, as previously reported by City AM. Jamba Europe, a small UK company effectively owned by New York-based HOF Capital, agreed to purchase £4.5m worth of shares via Republic at the beginning of November.

It is understood that Revolut rejected Republic’s argument that Jamba was permitted 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 exploiting a lack of liquidity on the secondary market to increase its stake, while further criticism was directed 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, Chair of Republic Europe, told City AM. "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.