Starling, the UK digital bank, is set to expand further having raised £40 million, in a fresh round of fund raising that will help deliver increased support for small and medium-sized businesses.
The investment from Starling’s existing investors follows a £60 million investment in February 2020, bringing the total raised by Starling in 2020 to £100 million. Since its launch in 2014, the bank has raised £363 million.
The digital bank now has more than 1.4 million current accounts, including 155,000 business accounts, since launching its banking app in May 2017. Its deposit base has more than doubled in the last six months and it now holds more than £2.4 billion on deposit.
Starling is the fastest-growing bank for small and medium-sized enterprises (SMEs) in Europe and now holds a 2.6% share of the UK’s SME banking market. It has almost £500 million of SME lending on its balance sheet, with further commitments raising the total to almost £1 billion.
The new funding will enable the bank to continue its rapid growth and help it provide much-needed support to small business customers who have been hit by the Coronavirus emergency.
The lockdown has accelerated the shift to digital channels. As an app-based bank, Starling has seen robust customer acquisition since the lockdown, especially in the business account channel, where daily sign-ups have accelerated from the start of the year.
Starling’s agile operating model also enabled it to step up its lending to SMEs in May, via a collaboration for £300 million under the government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and direct to its customers under its own CBIL and Bounce Back Loan Schemes.
Anne Boden, founder and chief executive of Starling Bank, said: “This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever.”