Starling Bank has entered Unicorn territory on the back of a new £272 million investment led by Fidelity Management & Research Company.
Starling, which was founded in 2014, embarked on an attempt to raise £200m last autumn when Rothschild, the investment bank, was hired to canvass interest from investors.
Alongside Fidelity, the Series D round includes participation from Qatar Investment Authority, Millennium Management and RPMI Railpen.
It brings Starling's valuation to £1.1 billion
While other loss-making app-based banks have been facing discounted valuations, Starling booked it first profitable month in November last year and has ambitious plans to expand across Europe.
The company says it has been consistently profitable since it moved into the black last year, with net income now exceeding £1.5 million per month. Revenue for January stood at £12 million, 400% up on the same month last year, setting the bank on course to report its first full year of profitiability.
Starling founder and CEO Anne Boden 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.”
She says the fresh capital will be deployed primarily to support a targeted expansion of Starling’s lending in the UK, as well as to launch in Europe and for anticipated M&A.
The bank currently has more than two million accounts, of which just over 300,000 are small business customers.