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Starling revealed its plans for using the raised funds. The digital bank plan to expand its business into Europe.
UK-based digital bank Starling has raised $376 million in a recently-concluded investment round led by financial services company Fidelity Investments. Now, the new cash investment has pushed Starling’s valuation to $1.5 billion.
According to a CNBC report, Starling is now lifted into the ranks of Europe’s unicorn companies with its new valuation, fueled by the fresh cash injection.
Starling Bank Supported by Fidelity Investments
Apart from Fidelity Investments, the other investors in the investment round include Qatar Investment Authority and hedge fund Millennium Management. In addition, the UK pension scheme Railpen also invested in Starling.
The CEO of Starling, Anne Boden, commented on the company’s newly-secured funds. In a statement, the CEO 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.”
Speaking further, Boden said that Starling’s new investors would contribute their wealth of experience for the continuous advancement of the company. She added that the continued support of the bank’s existing backers signifies a “huge vote of confidence.”
Furthermore, Starling revealed its plans for the raised funds. The digital bank plans to use the funds to expand into Europe. Additionally, Starling hopes to use the money for potential mergers and acquisitions.
Starling to ‘Acquire Something’ in 2021
In an interview last year, Boden noted that Starling would “acquire something during 2021.” She added:
“Lots of lenders are going to reevaluate their future and we are growing very, very fast. We’re always looking for opportunities.”
Before now, Starling had been planning to expand internationally. The bank’s CEO said in 2017 that Starling would be launching in the first quarter of 2018. In the 2017 report, Boden said:
“We are launching in Ireland in Q1 2018. We are already fully launched in the UK and my plan is to bring Starling Bank to Europe…we have our passports ready and we will be in Ireland in the first quarter of next year.”
Starling Bank provides a mobile banking app and a debit card that helps customers manage their finances. The digital, mobile-only challenger bank only operates current accounts and business banking. Since its inception in January 2014, the company has grown over the years and now has about 2 million users. The bank also received a banking license for the Prudential Regulation Authority and the Financial Conduct Authority (FCA) in July 2016. Starling accounts for 5% of the UK small business banking market, about 300,000 small business clients.
During the pandemic, Starling got a boost from the UK’s coronavirus lending schemes, making the digital bank one of the fintech firms offering government-backed loans to businesses.
Starling’s CEO Anne Boden was formerly the chief operating officer at Allied Irish Banks.