Challenger bank Starling secures £10m for war chest

Starling Bank chief executive Anne Boden
Starling Bank chief executive Anne Boden

Starling Bank, the financial technology startup, has secured £10m of new funding from Bahamas-based hedge fund manager Harald McPike as it gears up for a bumper £80m round to challenge rivals such as Monzo.

Mr McPike has been Starling Bank’s biggest backer, pumping tens of millions of pounds into the business. The Daily Telegraph understands Starling Bank has appointed JP Morgan Chase to advise on the upcoming deal.

Led by Anne Boden, a former Allied Irish and RBS executive, received its banking licence in 2016 for its mobile bank. It has since launched current and business accounts as well as a trademark “vertical” debit card.

Starling Bank has been growing fast and now has more than 320,000 customers across its personal and business accounts.

Starling Bank and JP Morgan declined to comment on the fundraising.

The new bank is in the running for a £120m pot from the RBS Remedies Fund, part of the bank’s deal for taking a bailout to encourage competition.

While Starling Bank was one of the first of a wave of UK financial technology companies to secure major investment in July 2016 - raising £48m from Mr McPike’s investment firm QuantRes - rivals have since increased their war chests.

Monzo, which provides coral red debit cards and a mobile banking app, raised £85m in October at a valuation of £1bnRevolut, a similar rival, raised around £179m in April. Venture capital funds including Accel Partners, General Catalyst and DST Global have piled into the two start-ups.

The latest £10m tranche of funding gives Starling Bank a total of £68m raised, having raised a further £10m from existing investors earlier this year.

In an interview with the Telegraph in October, Ms Boden said the bank had been building up its back-end infrastructure ahead of further growth. “We have built the best banking infrastructure I’ve ever come across,” she said, “We’re now in a position where we can offer customers absolutely everything and we are ready to say our doors are open.”

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