Starling Bank, the UK-based digital bank backed by financial, real estate and consulting services provider JTC Group, received £272m ($377m) in series D funding yesterday.
The round was led by investment and financial services group Fidelity and included RPMI Railpen, the investment manager of the UK Railways Pension Scheme, as well as sovereign wealth fund Qatar Investment Authority and investment firm Millennium Management.
The round valued Starling at $1.53bn pre-money according to the company. It remains subject to regulatory approval and, once approved, will allow private investor Harald McPike to sell some shares and reduce his stake to just under 40%.
Founded in 2014, Starling offers personal, business and joint accounts through a mobile app. In addition to British pound sterling, users can also open euro and US dollar-denominated current accounts, and the company also offers a range of loans.
The app includes a marketplace allowing users to connect to third-party financial offerings such as pension funds and insurance products to their bank account. Starling also operates a business-to-business service, marketing its technology platform to financial services firms.
The company has been profitable since late 2020 and will use the series D capital to grow its lending business in the UK and to expand into other European countries. It is also exploring acquisition opportunities.
Anne Boden, founder and CEO of Starling Bank, said: “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.
“Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence.”
Starling has now raised more than £660m ($915m at current exchange rates), according to a Sifted report that featured an interview with Boden. A previous total on Starling’s website, however, suggests the figure may be £635m ($881m at current rates).
JTC Group contributed to a $38.5m funding round for the company in late 2019 together with Merian Chrysalis Investment Company, a vehicle run by asset management firm Merian Global Investors. Merian Global had supplied it with $64.4m earlier in the year, when McPike invested another $19.3m.
An undisclosed existing investor likely to have been McPike supplied $14m for Starling in 2018, after he had joined other private investors for a $68.6m round in 2016. JTC Group has also invested in at least one earlier round, though it has not confirmed details of that commitment.
Image courtesy of Starling Bank.
