Fintech firm Starling Bank has closed a £50m investment by the growth equity arm of Goldman Sachs, adding to its £272m series D raise last month.
The US investment bank joins Starling’s other major backers, including asset management firm Fidelity, the Qatar Investment Authority, pensions manager RPMI Railpen and Millennium Management.
Starling did not clarify whether its valuation of £1.1bn from the series D round, the first time it has publicly discussed a valuation for the business, was changed by the Goldman investment.
James Hayward, managing director at Goldman Sachs, said Starling’s position as one of the UK’s top digital banks addressed “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,” Hayward added.
The race to compete with digital banks is heating up on Wall Street. In his annual letter to shareholders, JPMorgan boss Jamie Dimon said neobanks present a “big time” threat to its business, alongside fintech innovations inside tech giants such as Amazon and Google.
Starling has opened more than two million current accounts since it launched in 2017, including 350,000 business accounts. It now has over £6bn in deposits, up from £5.4bn last month and approximately £1bn a year ago.
The bank said it will use the investment, which remains subject to regulatory approval, to support its growth. Starling has been pursuing a banking licence in the Republic of Ireland for more than a year, with the hope of launching its European effort from Dublin.
The fintech firm became profitable on a monthly basis at the end of last year, and has maintained that track record since, with roughly £1.5m in monthly net income. While it achieved sustained profitability earlier than its top rivals Monzo and Revolut, Starling has far fewer customers — with Monzo and Revolut topping five million and 15 million respectively.
“Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling,” said the fintech firm’s chief executive and founder Anne Boden.
“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.”
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