Starling Investment

The digital only London based challenger bank Starling has raised over £75 million. The Starling investment was led by Merrian Global Investors (MGI), furthermore, Starling has also been awarded a £100 million grant. There was a £60 million Series C round led by MGI, with the support of Merian Chrysalis. A £15 million follow up investment was then implemented by existing backer and major shareholder, Harald McPike. The continued support of McPike, a billionare hedge fund manager/founder, and such a large investment from Merian, pay testament to Starling’s solid year on year growth in both revenue and user base. The total funding to date now stands at more than £233 million.

Nick Williamson, Merian Chrysalis co-portfolio manager: “Financial services is a market undergoing considerable change, driven by technology and users’ desire for better and more convenient offerings. The Starling team has developed a highly impressive and efficient platform, which we believe positions it well to continue to take share in core banking markets, as well as the ability to offer innovative new services in the future. We are delighted to be backing Anne and her team with this investment, and look forward to supporting them as they realise the full potential of the business.”

Starling was founded in 2014 by Anne Boden, the former COO for Allied Irish Banks, Head of EMEA (Global Transaction Banking) for RBS, Executive Vice President for ABN AMRO, and Vice President for UBS. Since its inception, the bank has amassed more than 460,000 personal current accounts and 30,000 SME accounts, and says it expects to hit one million customers by the end of 2019.

Quick Overview of Major Moves

2014 – Work on Starling begins

2016 – Starling investment becomes one of the largest in FinTech that year

March 2017 – Beta version launched, partnership announced with TransferWise

December 2017 – Anne Boden announces that the bank intended to apply for the RBS Remedies Fund (A fund intended to increase competition in the business banking market)

March 2018 – Starling launched business accounts.

November 2018 – Starling announced a partnership with Post Office.

February 2019 – Starling launched personal Euro accounts in the UK

Starling has also been awarded a £100 million grant from the Capability and Innovation Fund (CIF), a fund designed to increase competition in banking. This leads to a hefty Starling investment

Below is an extract from Starling’s website

London, 22 February 2019: Starling, the leading digital bank, has today been awarded a £100 million grant from the Capability and Innovation Fund (CIF).

The bank has pledged to use the money to create 398 new jobs in the UK and to invest £94.8 million of its own money to help build a better bank for the small and medium sized enterprises (SMEs) that are the lifeblood of the British economy.

Starling will make £913 million of balance sheet lending available to SME customers by the end of 2023. It expects to achieve a 6.7% market share within five years.

The £100 million grant will accelerate Starling’s ability to reshape the SME banking market, further invest in proprietary technology and build out its UK-based customer service and support team. Because Starling understands that many SMEs want to manage their banking online as well as through mobile apps, it will launch a web portal for SME banking customers later this year.