Starling is considering mergers and acquisitions as it is valued at £ 1.1bn in £ 272m funding round
UK digital-only bank Starling has raised £ 272million ($ 376million) from donors including Fidelity and the Qatar sovereign wealth fund.
Starling said on Monday that Fidelity led its “Series D” funding round, which included cash from the Qatar Investment Authority, the British Railways pension scheme and the Millennium Management hedge fund. Starling was valued at £ 1.1bn as part of the deal. The transaction still requires regulatory approval.
“Digital banking has reached a tipping point,” Starling founder and CEO Anne Boden said in a statement. “Customers now expect a fairer, smarter and more human alternative to the banks of the past and this is what we are offering 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 move into the next stage of growth, while the continued support of our existing funders is a huge vote of confidence.”
Starling said the new funds would be used to increase lending to the UK, stimulate expansion in Europe and for possible mergers and acquisitions opportunities.
Starling was founded in 2014 as one of the UK’s first digital banks. The company has been designed entirely around the smartphone and allows customers to do everything from opening accounts to applying for a digital loan.
Today, the bank has more than 2 million customers, including 300,000 holders of professional accounts. He has seen his loan portfolio grow rapidly over the past year through his participation in government-backed business support loan programs. The bank holds customer deposits of £ 5.4bn and has lent more than £ 2bn.
Starling provided a trading update alongside its funding announcement. The bank said it was set to declare its first full year of profitability, after four consecutive months in the dark. Net income stands at £ 1.5million per month, the bank said, and January income is up 400% from a year ago.
In a separate announcement on Monday, Rival bank only digital Atom said the value of business loans on its balance sheet had tripled to £ 700million in the past 12 months. The bank credited participation in the government’s Interruption Loans (CBIL) program. Atom has said he hopes to participate in the successor to CBILs, announced in last week’s budget, the Recovery Loan Scheme.
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