Revolut strikes share deal with SoftBank to remove barrier to UK licence – FT

(Reuters) – UK-based fintech company Revolut has agreed to simplify its ownership structure with investor SoftBank, removing one obstacle to win a long-delayed banking license in its home market, the Financial Times reported on Tuesday, citing three people familiar with the matter.

Revolut and SoftBank had been locked in months of negotiations, with the Japanese investor demanding stiff compensation for giving up its priority class of shares, the report said.

The fintech startup can only win a UK banking license if it gets rid of preference shares held by investors including SoftBank. The Bank of England had instructed Revolut to collapse its six classes of shares into one as a condition for a full license which the company first applied for over two-and-half years ago, according to the FT report.

SoftBank, which led an $800 million funding round in 2021 that valued Revolut at $33 billion, wanted compensation for giving up the protections attached to its tranche of shares. The standoff was one of the reasons Revolut could not immediately get a banking license.

The agreement in principle struck last week does not include any new issuance of “top-up” shares for SoftBank, nor will it have a financial impact on the company, the FT report said.

According to the report, other investors such as Tiger Global Management, venture capital firm TCV, Balderton Capital and Ribbit Capital have all either agreed to transfer their shares into a single class, or are in final talks to do so.

The BoE’s regulatory arm is the lead agency for approving banking licence applications in the country, which must also be signed off by the Financial Conduct Authority.

The BOE and SoftBank did not immediately respond to Reuters’ requests for comment on the report, while Revolut and the FCA declined to comment.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Maju Samuel)