Revolut’s dispute with a crowdfunding platform concerning the sale of its shares escalated into a potential legal battle. The fintech giant reportedly blocked a discounted secondary share sale involving early investors.
The company, Republic, is now threatening legal action, accusing Revolut of restricting their liquidity options, City.AM reported. The dispute is due to a proposed sale of 10,047 Revolut shares by Jamba Europe, an entity owned by HOF Capital, through the Republic platform.
The Cause of the Conflict
Jamba agreed to purchase these shares from over 200 investors for around £4.5 million. However, Revolut reportedly intervened, changing its articles of association to restrict such sales, according to a letter from Republic.
The crowdfunding platform has sought legal advice and is awaiting a response from Revolut. Investors on Republic’s platform have voiced concerns that Jamba’s offer undervalues their shares. The proposed price of £447.69 per share represents a 32% discount compared to an August share sale facilitated by Morgan Stanley, which valued the shares at $865.42 each.
Jamba’s offer was reportedly below the bids made by other investors, some of whom were willing to pay up to £549.93 per share. Republic defended the discounted pricing, claiming it was the best deal they could secure after multiple failed attempts to arrange sales due to Revolut’s resistance.
The Long-Standing Tension
This clash is the latest in a series of disputes between Revolut and early backers seeking to cash out their holdings. Since its 2017 crowdfunding campaign, where Revolut raised £3.8 million from investors on the Republic platform (then called Seedrs), the fintech has been reluctant to approve secondary sales.
Republic argued that the sale was compliant with Revolut’s rules since Jamba had participated in the 2017 fundraise and held shares through the platform.
However, the handling of Jamba’s offer attracted criticism from the Republic’s users and scrutiny from the UK’s Financial Conduct Authority. The platform reportedly canceled the sale in October after the FCA demanded specific regulatory approval.
Last month, Revolut asked Meta to compensate users who fall victim to scams on its social media platforms. The fintech giant's demands followed Meta’s launch of a data-sharing partnership with UK banks. However, Revolut faulted this move as insufficient to address global fraud issues.
