Starling bank recently announced that it generated £6.7 million for the month of July 2020, meaning that it could make annual revenue of £80m.
However, losses doubled to £52 million in 2019, while the company trebled its staff numbers. Revenues came in at £14.2 million, a significant rise from the £750,000 it secured a year earlier.
The CEO of Starling bank Anne Boden told reporters the digital bank had benefited from participating in government schemes to provide business loans during the pandemic.
With regard to the losses, she called 2019 a “transformational” year for the business and accused Starling bank’s competitors with the following statement:
The coronavirus emergency has without doubt accelerated the shift to digital. It has also focused minds in the fintech sector on business models and exposed those without a clear path to profitability. I’m reminded of what Warren Buffet said at the time of the financial crisis, “Only when the tide goes out, do you discover who has been swimming naked.”
This all comes to contrast with Monzo, which recently expressed “significant doubt” over its ability to continue after doubling its losses during the pandemic.
Read also: Monzo bank future in doubt as losses double
Starling now has more than 1.5m registered consumer and business accounts, with more than £3bn in deposits. However, this remains small in comparison to its two major digital rivals, with Monzo on 4.5m users and Revolut at over 12m.
Boden also claimed that Starling is adding a new account every 35 seconds and that Starling is the fastest-growing SME bank in Europe and now holds a more than 3% share of the UK’s SME banking market.
Boden adds: “Despite the coronavirus emergency leading to a drop in interchange income for several weeks, card volumes are back to pre-lockdown levels. This, combined with our lending and growth in other parts of the business, has resulted in a significant increase in our annualised revenue run rate, which now stands at £80m. We remain on track to reach break-even by the end of 2020, hitting the target we set a year ago.”