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The deal between Starling and Goldman Sachs has been said to be pending regulatory approval.
Britain’s virtual bank Starling Bank has received about $69 million investment from Goldman Sachs Group Inc (NYSE: GS) after completing a £272 million investment round to value the company at £1.1 billion last month.
According to Anne Boden, the CEO and founder of Starling, the consultation with superpower institutions provides a clear view of the power of demand of investors.
“Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling,” Boden added.
The deal between Starling and Goldman Sachs has been said to be pending regulatory approval. Starling is one of the biggest neobank in the UK and appears to operate differently from most of the traditional banks. Starling is said to be doing everything positive of the normal UK banks and none of the negative factors of these banks.
This branchless bank has a total deposit of over £6 billion, which is an unprecedented rise from £1 billion from last year. Over the years, Starling has been in the headlines following reports that JPMorgan Chase & Co (NYSE: JPM) and Barclays Plc (LON: BARC) have expressed interest in acquiring the company of which the British virtual bank has denied. Goldman Sachs made this investment decision after the company was stated to clarify the authenticity of the acquisition rumors.
James Hayward, the managing director of JPMorgan in a statement expressed his excitement about leading the investment to support Starling as they are very positive about the sustainable long-term earning potentials of the bank. Hayward stated that Starling is the most innovative digital bank in the UK, and has enough ambitious leadership team to address the deep market opportunities.
Starling has also prioritized the expansion of its services as they have already made an effort to acquire a license to operate in Ireland. The money would be used for these purposes and to make mergers or acquisitions.
Starling believes to be different from its competitors such as Revolut Ltd and Monzo Bank Ltd due to their ability to turn a profit. This is a big deal as the neobanks have been asked to prove whether their business can make money after years of loss-making. Their uniqueness also comes from their focus on small business banking. It is interesting to note that Starling has 2 million users of which 350,000 come from the business client category. They also boast of around 6% shares in the British SME market.
Goldman in 2018 launched its digital bank in the UK called Marcus but according to reports, the increase in deposits that arose during the first Covid-19 lockdown in the country forced them to halt operation for the easy-access savings account.