Fidelity Leads New Financing
The newest funding round was led by Fidelity Investment and took Starling’s valuation to £1.1 billion ($1.52 billion). This means that the fintech business has now entered the unicorn area, which includes privately-held companies that are worth more than $1 billion.
Other business investors that backed the fintech company include Qatar’s sovereign wealth fund “Qatar Investment Authority,” as well as UK pension fund “Railpen” and hedge fund “Millennium Management.”
“Digital banking has reached a tipping point. Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services,” said Anne Boden, Starling’s chief executive.
The fintech business said it plans to use the proceeds to expand into the European market, as well as for merger and acquisition, or M&A, deals. Starling Bank restarted discussions in 2020 to obtain a banking license in Ireland after halting expansion plans due to the coronavirus pandemic.
On the other hand, the fintech company previously said it is interested in acquiring a rival company.
“We are probably going to acquire something during 2021. Lots of lenders are going to reevaluate their future and we are growing very, very fast. We’re always looking for opportunities,” Boden said last year.
Boden also denied rumors that investment banking companies JP Morgan and Barclays are interested in acquiring Starling Bank and said the bank was considering an initial public offering (IPO).
Starling Bank was founded in 2014 by Boden and has become one of the most famous online banking businesses in Europe, with over 2 million users. The company currently represents 5% of Britain’s small business banking market, including around 300,000 small business clients.
The company significantly benefited from the UK's lending programs and became one of a few fintech companies to provide government-backed loans to businesses amid the pandemic. Starling Bank now has over £2 billion ($2.77 billion) in gross lendings and deposits of £5.4 billion ($7.48 billion).
The British fintech company Starling Bank says it has raised £272 million ($376 million) in a financing round led by Fidelity Investment, reaching a valuation of £1.1 billion ($1.52 billion).
About the Author
Luigi Wewege is the Senior Vice President and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an instructor at the FinTech School which provides online training courses on the latest technology and innovation developments within the financial services industry. Luigi is also the published author of "The Digital Banking Revolution."