Goldman Sachs invests $69 million in UK digital banking startup Starling Bank
Starling Bank, a U.K.-based mobile banking platform that offers personal, joint, and business accounts, announced today it has raised £50 million ($69 million) in funding from Goldman Sachs’ growth equity investment arm.
The investment, which brings the total funding raised in the Series D round to £322 million, is an extension of the bank’s oversubscribed £272 million Series D funding round announced in March 2021, now values the FinTech startup at over £1.1 billion pre-money, making Starling a new member of the highly coveted unicorn club. Starling will use the new funding proceeds to support its continued rapid and now profitable growth.
Founded in 2014 by Anne Boden, former Allied Irish Banks COO, Starling offers personal, business, joint, children’s euro, and dollar current accounts alongside a range of lending products. Starling also offers B2B banking and payments services through its Banking-as-a-Service model based on its proprietary technology platform that it uses to power its own bank. The Starling Marketplace offers customers in-app access to a selection of third-party financial services.
Starling now has more than two million current accounts, including 350,000 business accounts. Its deposit base has increased from approximately £1 billion just over a year ago, to now more than £6 billion.
It is the fastest-growing bank for small and medium-sized enterprises (SMEs) in Europe and now holds a 6% share of the UK’s SME banking market. It is on course to report its first full year in profit by the end of its next financial year-end.
“Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling. Goldman Sachs will bring valuable insight as we continue with the expansion of lending in the UK, as well as our European expansion and anticipated M&A,” Boden said.
Goldman Sachs made its first foray into personal banking in 2010 after it launched Marcus, a mobile banking app that allows anyone with a smartphone to invest $1,000. In February, we also wrote about Goldman Sachs after it launched Marcus Invest, a digital wealth-management platform. In addition to the launch, Goldman has also been investing heavily in FinTech startups.
James Hayward, managing director at Goldman Sachs, said: “Starling is one of the leading and most innovative digital banks in the UK, with an ambitious technology-first leadership team and addressing a deep market opportunity. We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential.”