Digital Banking Challenger Starling Secures £50M in Capital from Goldman Sachs Growth Equity

 

Starling, a leading UK-based digital bank, revealed on Monday (April 19, 2021) that it has received a £50 million investment from Goldman Sachs Growth Equity.

The latest investment is reportedly an extension of the digital bank’s oversubscribed £272 million Series D investment round that was announced in March 2021, which valued Starling Bank in “excess of £1.1 billion pre-money.” This recent investment takes the total raised in the Series D round to £322 million, according to a release shared with Crowdfund Insider.

Starling now claims over 2 million current accounts, including 350,000 business accounts. The banking challenger’s  deposit base has “increased from approximately £1 billion just over a year ago, to now more than £6 billion,” the announcement revealed.

Starling’s management noted in the release:

“It is the fastest-growing bank for small and medium-sized enterprises (SMEs) in Europe and now holds a 6% share of the UK’s SME banking market. It is on course to report its first full year in profit by the end of its next financial year-end.”

The new funding announced on Monday will support Starling’s “continued rapid and now profitable growth.”

Anne Boden, founder and CEO of Starling Bank, stated:

“Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling. Goldman Sachs will bring valuable insight as we continue with the expansion of lending in the UK, as well as our European expansion and anticipated M&A.”

James Hayward, managing director at Goldman Sachs, remarked:

“Starling is one of the leading and most innovative digital banks in the UK, with an ambitious technology-first leadership team and addressing a deep market opportunity. We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential.”

The transaction remains “subject to regulatory approval.”

Goldman already is an operator of a UK-based digital bank Marcus that has seen solid growth in one of the most competitive markets for digital banks.

Starling Bank provides personal, business, joint, children’s euro and dollar current accounts “alongside a range of lending products.”

Starling also provides B2B banking and payments services via its Banking-as-a-Service model “based on its proprietary technology platform that it uses to power its own bank.” The Starling Marketplace provides clients with in-app access to several third party financial services.

Based in London, with business offices in Southampton, Cardiff and Dublin, Starling is “a fully licensed and regulated bank, founded by Anne Boden, former Allied Irish Banks COO, in 2014.”

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