Wed, 27 Apr 2022 | BUSINESS NEWS
Digital bank Starling has raised £130.5 million in a funding round that it says will enable it to continue its growth and target acquisitions. The fundraising valued the London-based bank at more than £2.5 billion.
Starling said that the funding had been secured from its existing investors, all of which participated in the funding round. The bank’s largest single shareholder is JTC, with Goldman Sachs, the Qatar Investment Authority, Fidelity Management and Research Company and Chrysalis Investments among its other investors.
A spokesperson for Starling said: "This will enable us to continue our growth and to build a war chest for acquisitions. We are looking at a number of potential targets.”
While the bank did not comment further on potential acquisitions, reports have indicated that Starling’s balance sheet has around £400 million in surplus capital that could be deployed for M&A, with the bank said to be considering targets within the lending market.
Among the bank’s reported targets is mortgage provider Kensington, although it is understood to be considering other potential deals. Last year, Starling made its first acquisition with a £50 million deal for buy-to-let lender Fleet Mortgages, which founder Anne Boden said at the time represented “the start of our move into mortgages as an asset class.”
Boden founded Starling in 2014, with the firm receiving its banking licence in 2016. Its services include personal and business accounts, payments services and B2B banking services.
In 2021, Starling raised £322 million, £272 million of which came via a Series D funding round led by Goldman Sachs and others. This pushed Starling to a valuation of over £1.1 billion, officially giving it unicorn status.
Since its founding, the bank has opened close to three million accounts, including over 450,000 small business accounts. The bank expects to post its first full year of profits when it publishes its accounts for 2021-22 this summer. Boden has said previously that Starling aims to go public by 2023.
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