Digital bank Starling bank has raised £40 million from existing investors according to a note from the Fintech. Starling said the funding was led by JTC and Merian Chrysalis Investment Company Limited.
Anne Boden, founder and chief executive of Starling Bank, commented on the news:
“This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever.”
This most recent capital injection arrives after Starling raised £60 million in February – thus £100 million for the year. In total since 2014, Starling Bank has raised £363 million. Starling did not reveal the details on the investment including the valuation. During the February round, it was reported that Starling staff and management held about 20 percent of the bank post-funding with Merian and JTC controlling the balance. Merian Chrysalis Investment Company Limited is a Guernsey-domiciled investment company traded on the London Stock Exchange. JTC is part of the McPike Global Family Office that oversees the investment activity of its founder, Harald McPike.
Starling now reports over 1.4 million current accounts, including 155,000 business accounts, since launch of its banking app in May 2017. In the past 6 months, Starling’s deposit base has more than doubled and now holds £2.4 billion – thus the digital bank has grown enviably in just a few months.
Starling claims to be the fastest-growing bank for SMEs in Europe with a 2.6% share of the UK’s SME banking market. Starling says it holds about £500 million of SME lending on its balance sheet, with “further commitments” raising the total to almost £1 billion.
Starling states that the COVID-19 driven lockdown has accelerated the digital transformation – something we have heard from many Fintechs. Starlings states it has experienced “robust customer acquisition” especially in the business account channel, where daily sign-ups have accelerated from the start of the year. Starling Bank was one of the first Fintechs to be approved under the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme.
Via Twitter, Starling Bank received many positive comments regarding CBILS but the digital bank has struggled with the demand for Bounce Back Loans – so much so it has had to curtail borrowers to existing members only.
“To manage high demand, we’re prioritising in the first instance established business and sole trader customers, using Starling as their primary account. If you’re interested, please join our list. If you are eligible, you’ll be sent an email inviting you to apply. We can’t guarantee that everyone that joins the list will be invited to apply.”