Starling has become the latest challenger to achieve unicorn status, after securing £272m in its largest ever funding round.
Fidelity Management and Research led the series D funding round, which brings Starling’s valuation to £1.1bn. The Qatar Investment Authority, Railpen, and Millennium Management also participated in the round.
Starling has said it plans to use the latest funding to expand its lending operations in the UK, as well as fuel its international expansion plans.
Anne Boden, founder and chief executive, 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.
“Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence.”
Starling becomes profitable
The announcement comes as the challenger is in its fourth consecutive month of profit – in November 2020, Starling became the first profitable UK challenger, posting a profit of £0.8m for the month of October.
Speaking at the time, Boden explained how international expansion is one of the bank’s greatest aims for 2021.
“I’m equally certain that we will become a formidable competitor in the European banking market as we gear up to scale across Europe,” she said.
“We know that our technology is hugely scalable because our tech team runs a constant simulation at around ten times our current capacity. We’re prepared for a sudden influx of customers and transactions. In fact, we’re prepared for pretty much anything.”
To date, Starling has raised £635m, including a £100m grand from the BCR competition fund. And since 2017, the bank has grown to more than 2m accounts.
Its gross lending also exceeds £2bn, while its deposits have reached more than £5.4bn.