Starling has completed a £272 million series D funding round that gives the digital bank a pre-money valuation of £1.1 billion.
Fidelity Investments led the funding round, alongside Qatar Investment Authority, RPMI Railpen, the investment manager for the £31 billion Railways Pension Scheme, and global investment firm Millennium Management.
Starling is among the UK’s fastest-growing banks. Since launching in 2017, it has opened more than two million accounts, including more than 300,000 small business accounts.
The digital bank’s total gross lending now exceeds £2 billion, while deposits top £5.4 billion.
The new funding will support Starling’s continued rapid and now profitable growth. The capital will be deployed primarily to support a targeted expansion of lending in the UK, as well as to launch in Europe and for anticipated mergers and acquisitions.
Anne Boden, founder and chief executive officer of Starling Bank, says: “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.”
The announcement comes as Starling booked its fourth successive month in profit. The digital bank is on course to report its first full year in profit by the end of its next financial year-end.
Starling generated a total revenue of £12 million in January 2021, which represents an annualised revenue run rate of approximately £145 million and an increase of approximately 400% compared to January 2020.
Gross operating costs remain broadly flat with account numbers having almost doubled year-on-year to more than two million.