Revolut, the digital bank backed by Molten Ventures, Scottish Mortgage and Schroders Capital Global Innovation, has achieved a 53% hike in valuation to $115bn (£85bn).

A secondary share sale by staff and existing investors enabled institutions, including Scottish Mortgage manager Baillie Gifford, to buy shares in a transaction that lifted the neobank’s valuation from $75bn in the last share sale a year ago. No new money was raised.

That puts Revolut, which has over 80m retail customers around the world, ahead of the UK’s biggest listed banks, dwarfing £59bn Barclays (BARC), £56bn Lloyds (LLOY) and £48bn NatWest (NWG).

Nik Storonsky, founder and chief executive, said the valuation showed the global momentum in the business which this year has launched banks in the UK, Mexico, Australia and New Zealand, obtained banking licences in France, Colombia and Argentina and received conditional national bank charter approval in the US.

Molten Ventures (GROW), the £1.2bn high tech venture capital fund, took the opportunity to make a further £50m reduction in its holding having realised £70m in the first half the year. 

This brings its total proceeds from Revolut to £180m, achieving a 21 times return on its original investment of $16.5m (then £12m) in April 2018.

In an update ahead of half-year results on 27 November, Molten said the Revolut position had reduced from £175m at 31 March to £130m at 30 September. Last week it expected to have made a 14% investment return in the six months to 30 September.

Chief executive Ben Wilkinson said: “The proceeds strengthen our ability to recycle capital into new primary and secondary opportunities, underpinning our commitment to NAV-accretive, shareholder-focused capital allocation.”

GROW shares have rebounded strongly since US President Trump’s “Liberation Day” in April last year, rising from a low of 234p to 689p. The share price rating has also improved with the discount to net asset value (NAV) more than halving from 44% to 20.5%. They have caught the attention of activist Saba Capital which doubled its holding to 10% in March, before lifting it to 16.7% and last week reducing that to 14.6% in shares and total return swaps.

Scottish Mortgage (SMT) held 1.2% of assets in Revolut at 30 September, worth £216.8m. The £15.5bn Baillie Gifford flagship first invested around £77.5m in March last year when Revolut was valued at $48bn. 

We have asked Baillie Gifford if SMT has topped up its holding or if other trusts it manages have bought in.

Schroder Capital Global Innovation (INOV), the former Woodford Patient Capital Trust which is winding down by selling assets and returning capital to shareholders, has not issued an update either. 

Half-year results in September showed its position in Revolut rose from £19.9m to £21.9m in the first half of this year, based on an $80m valuation. That made Revolut its second biggest holding after Atom bank at 15.3% of assets. 

If INOV has not sold down, that percentage will have risen in response to the valuation hike and the £28m tender offer, or return of capital, it held in the same month which reduced its market value to £75m. 

Schroders has been approached for comment.

INOV shares rose 1% to 14.81p.

Our view

QuotedData senior analyst Richard Williams said: “Revolut’s latest share sale provides a significant boost to the investment case for several listed investment companies with exposure to the business. Molten Ventures (GROW) has been a particularly successful investor, with its latest £50m disposal taking total realised proceeds to approximately £180m, representing an exceptional 21 times invested capital, while retaining a holding worth around £80m. With INOV and SMT also holding substantial exposure, the latest valuation is an important potential driver of returns and provides valuable independent validation of private market valuations. Baillie Gifford was among the lead investors in the latest transaction, demonstrating continued confidence in the company’s prospects, although it is not yet clear whether any additional shares were acquired specifically for SMT.”