Starling founder Anne Boden recently told . that the UK challenger bank is on track to be profitable by Christmas. However, this does not mean that it is not yet raising additional capital.
According to well-placed sources, Starling has hired Rothschild to raise a new round of £ 200 million. The draw is expected profitability, which, according to a source, is already attracting the interest of private equity investors. Starling declined to comment.
Starling now has 1.9 million customers after raising £ 363 million to date, including a £ 100 million state aid grant. Since launching business banking in March 2018 and subsequently participating in the UK government's bounce-back program for companies affected by the pandemic, the company now also has more than 280,000 business accounts for sole proprietorships and small and medium-sized businesses.
In our recent interview with Boden, where she mostly talked about her book about starting Starling, she told . that her ultimate goal is to get an IPO. "I didn't do any of this to sell to a big bank," she told me. "I have my sights set on an IPO. I would love to do that."
However, to do just that, additional capital injections will almost certainly be required over the next few years in order to continue to tell a compelling story for future public investors, which will include continued UK expansion and meaningful introduction into Europe.
In the short term, we could also see some M&A activity. Speaking at the LendIt Fintech Europe 2020 virtual conference in October, Boden said that Starling is continuing to grow the SME side of its business and that SME loans are now the largest segment of its total book (nearly £ 1.5bn in loans). As part of this, it did not rule out acquiring companies in the SME lending space.