Starling Bank, a UK-based digital challenger bank, has reportedly disclosed one the biggest fundraising in its history of seven years, announcing that it has secured approximately £270 million from investors, which includes one of the largest sovereign wealth funds in the world.
Starling Bank also confirmed that its newest share sale would surpass expectations, raising significantly more than the expected £200 million. The fundraising took place at a pre-money valuation of approximately £1.1 billion, confirming the status of the Bank as the latest British banking “unicorn”.
This funding round was led by leading Fidelity Management & Research, known as one of the largest asset managers in the world. The QIA (Qatar Investment Authority) as well as Railpen, that manages worth £31bn Railways Pension Scheme along with the hedge fund Millennium Management were also involved in acquiring stakes.
The blue-chip investors would be regarded as an uplift to the Bank’s chances of achieving the scale needed to become an authentic digital banking powerhouse. Founded in 2014 by Anne Boden, a veteran banker, Starling Bank currently has around 2 million accounts, approximately 300,000 of which belong to small & medium enterprise (SME) banking customers.
Starling currently accounts for 5 per cent of the small business market, a share which the Bank is eager to grow.
Overall, deposits with the bank now surpass £5.4 billion, while Starling has made loans of around £2 billion, some of which were under the Coronavirus Business Interruption Loan Scheme of the government.
According to Insiders, the share sale would be announced today by Boden overlapping with International Women's Day.
The Bank’s novel investors are being considered the likely buyers of more shares in the bank in an upcoming IPO, which s not yet on the horizon.
The valuation attached to the bank is remarkable considering the faltering performance of commonly named "neobank" competitors such as Atom Bank and Monzo.
Starling Bank had earlier raised approximately £350 million following its establishment. A large part of the capitals came from Harald McPike, a Bermuda-based investor.