Best Tech News Site: Starling Bank raises additional £30M as it nears 1 millionth account holder

Wednesday, October 23, 2019

Starling Bank raises additional £30M as it nears 1 millionth account holder

Starling Bank, the U.K.-based challenger bank founded by banking veteran Anne Boden, has raised an additional £30 million in funding.

In what was likely already agreed follow-on funding, perhaps contingent on milestones being met, previous backer Merian Chrysalis led the round with an investment of £20 million. JTC, another of Starling’s existing investors, also participated, adding a further £10 million.

Starling says the new funding will support increased investment in its consumer and SME bank accounts, as well as its B2B banking services. The capital will also be used to accelerate expansion into Europe.

Launched in May 2017, Starling has raised £263 million to date. In February this year it disclosed a £75 million funding round, and in the same month was awarded £100 million from the Capabilities and Innovation Fund, which was set up by Royal Bank of Scotland to fulfill European state aid conditions after a bailout during the financial crisis. Starling is using the CIF award to build out its SME account.

Meanwhile, the challenger bank says it is very close to reaching 1 million accounts opened. The number at time of publication was 930,000 accounts, with the 1 million mark expected within a few weeks.

That isn’t quite on par with competitors such as Monzo, Revolut or N26, all of which have several million opened accounts and have been growing significantly faster — even if that hyper growth isn’t without problems. However, Starling has always talked up its average bank deposits number as higher than other upstarts, evidence that consumers are using new banking offerings in different ways and not always as their primary salary account.

Cue statement from Boden: “This latest investment of £20 million from Merian Chrysalis will support Starling’s rapid growth and help us reach one million customers and £1 billion on deposit within weeks. It will also help us accelerate our global expansion, starting in Europe, so that even more people can benefit from the Starling app.”