Fundraise of £130.5m which was announced yesterday, gives Starling a pre-money valuation of more than £2.5bn.
Funds came from all of Starling’s previous backers, including Goldman Sachs Growth Equity and the Qatar Investment Authority.
Existing investors who participated in the round also include Starling’s biggest backer Harald McPike, the Bahamas-based media-shy investor who is thought to own just under 40 percent of Starling.
“This will enable us to continue our growth and to build a war chest for acquisitions. We are looking at a number of potential targets,” a Starling spokesperson said.
Starling did not reveal any further details about possible acquisition targets. It likely has about £400m in surplus capital on its balance sheet that could be used for acquisitions.
However, a source told UKTN that Starling is looking at targets in the lending space. Starling has previously been linked with mortgage lender Kensington, with the challenger bank reportedly in a bidding war with high street bank Barclays.
Starling has previously acquired UK-based buy-to-let mortgage lender Fleet Mortgages in a £50m cash and stock deal.
March last year, Starling managed to raise £272m in a funding round. This has given it a valuation of £1.1bn and elevated it to unicorn status.