UK-based digital bank Starling Bank is preparing for a secondary share sale that could value the company at up to £4bn ($5.41bn), reported The Financial Times.

The bank has engaged investment banks, including Morgan Stanley and Rothschild, to facilitate the sale process, with estimates suggesting a valuation range between £3.5bn and £4bn.

The decision to conduct the share sale aims to enable existing investors, such as Goldman Sachs, Railpen, Chrysalis Investments, and Fidelity, to reduce their stakes and allow for new investors to enter.

This is claimed to mark the first sale process for Starling since its valuation was reduced by £1bn following fund manager Jupiter’s decision to divest its holding in 2023.

Starling declined to provide comments on the matter.

Founded in 2014 by Anne Boden, a former executive at Allied Irish Banks, Starling was valued at £2.5bn during its last funding round in 2022.

However, tensions arose between Boden and investors after Jupiter’s sale led to a significant drop in Starling’s valuation to between £1bn and £1.5bn.

Boden departed from the company in 2023, and Raman Bhatia assumed the role of group chief executive.

Starling is also exploring international growth opportunities, including potential plans to acquire a nationally chartered bank in the United States, which would enable it to lend across all 50 states.

The bank currently serves more than four million users in the UK, offering a range of services including current accounts, budgeting tools, savings accounts, and fee-free transactions for international travel.

The announcement of the sale coincides with increased investor interest in UK fintech companies.

Revolut is also initiating a secondary share sale targeting its employees, with a valuation goal of $75bn, as reported by the Financial Times.

Coatue, an investment firm, is leading a new fundraising effort for Revolut.