The UK challenger Starling Bank announced a £272 million Series D funding round led by Fidelity Management & Research Company.
Other investors include Qatar Investment Authority (QIA), RPMI Railpen (Railpen), the investment manager for the £31 billion Railways Pension Scheme, and the global investment firm Millennium Management.
Read also: Revolut has announced launch of Revolut Bank in 10 additional countries
With this recent funding, Starling has become worth £1.1 billion, which makes the company an official FinTech unicorn.
The new funding announced yesterday is aimed to support Starling’s continued rapid and now profitable growth. Starling Bank has achieved break-even last October and with expectations to be monthly profitable on an operating profit basis.
Right after that JPMorgan and Lloyds Banking Group expressed interest in an acquisition of the digital bank. However, CEO Anne Boden decided to go for an IPO.
Starling generated a total revenue of £12 million in January 2021, which represents an annualised revenue run rate of c.£145 million and an increase of approximately 400% compared to January 2020.
Starling has also generated a positive operating profit for a fourth consecutive month, with net income now exceeding £1.5 million per month.
“Digital banking has reached a tipping point,” Anne Boden, Starling’s CEO, said in a statement this Monday. “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.”
Boden added: “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.”
Anne Boden has also recently announced a plan in which Starling Bank is going to hold 18% of the SME banking market in five years. The current share of the small business market is around 4.4%.
During the pandemic, Starling has managed to give out £1.4bn in bounceback loans. About 66% of the recipients were based outside of London. For example, Scottish business customers of Starling received around £67m in such loans.