One of Revolut's most steadfast investors, Schroders, has reduced the fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term giant's valuation by approximately $15 billion, marking a 46% write-down. This revaluation positions Revolut at $17.7 billion, a significant decrease from the $33 billion valuation following a funding round in July 2021.

Schroders Slashes the Valuation of Revolut's Shareholdings

Schroders' fund managers remain optimistic about Revolut's future, but its independent in-house valuation team determined the more conservative valuation.

The revised valuation was disclosed in a filing by Schroders Capital Global Innovation Trust, a listed investment trust managed by Schroders, according to The Times. The trust has reduced the estimated value of its Revolut stake from £10.115 million to £5.436 million as of 31 December 2022.

Founded in 2015 by Nik Storonsky and Vlad Yatsenko, Revolut began as a cross-border money transfer platform and has since expanded into consumer loans, crypto trading and even pet insurance. The London-based fintech firm boasts over 28 million global clients, employing over 6,000 individuals.

However, Revolut has faced recent hurdles, including a delayed application for a UK banking license and concerns raised by external auditor BDO regarding controls and procedures related to £477 million of its annual revenues in the group's 2021 accounts. Also, the company was forced to postpone its native cryptocurrency debut after the collapse of the FTX crypto exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term in November 2022.

Deteriorating Fintech Trends

Schroders' write-down is considerably more significant than the 15% devaluation applied by another investor, US-based TriplePoint Venture Growth, which values Revolut at $28 billion. The previous $33 billion valuation was established during a peak in enthusiasm for fintech stocks in July 2021 when Revolut raised $800 million from investors, such as Tiger Global Management and Softbank.

Other fintech companies have experienced significant devaluations recently, including Klarna, a Swedish "buy now, pay later" credit provider, which saw its valuation drop from $45.6 billion to $6.7 billion within a year. The decline in valuation came despite an increase of 21% in the company's 2022 revenue to $1.85 billion and an increase of 20% in net operating income to $1.6 billion.

Fintech funding across Europe and Asia slumped visibly in 2022, according to the newest industry data from Innovative Finance. January's report focused on the UK's fintech industry and showed a slump of 8% in overall funding on the Island and 30% worldwide. Global support for the sector shrank about 30% to $95 billion. The total number of completed investments fell from 6,146 to 5,263.

According to another report by CB Insights, global fintech funding slumped 46% to $75.2 billion in 2022. During the last quarter of the year, the industry generated $10.7 billion in funding, which is its lowest since 2018.