Challenger bank Starling has raised £40m ($49m) from investors, taking the total new cash it has raised this year to over £100m.
Digital-only bank Starling said on Friday it had raised an additional £40m from investment company Merian Chrysalis (MERI.L), formerly known as Old Mutual Global Investors, and the family office of Starling’s biggest investor, quant trader Harold McPike. Both are already investors in Starling.
The fresh cash infusion comes just months after Starling raised £60m from investors in February. The startup has raised over £360m since its founding in 2014.
“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,” Starling founder and chief executive Anne Boden said in a statement.
Starling is among the group of banks that have been authorised to give emergency government-backed loans to businesses under the coronavirus business interruption loan scheme (CBILS) and Bounce Back loans programme.
Boden told MPs on the Treasury Select Committee at the start of this month Starling was “very, very keen to start lending as soon as possible,” pending authorisation at the time, but some have been disappointed with the digital bank’s handling of the schemes. Starling initially promised to offer government support loans to new customers, before withdrawing that policy.
In a blog post at the start of the month, Boden said the government schemes were “a double edged sword.”
“The urgency of the current situation means that we have to launch at scale practically from a standing start,” she wrote. “So we want to be fully upfront about this: we may need to make adjustments as we go. We hope our customers and the wider community will understand this.”
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A banking veteran, Boden co-founded Starling as a digital-only bank in 2014. The lender now has 1.4m current accounts, including 155,000 business accounts. Deposits have doubled in the last six months to reach £2.4bn.
Starling is one of a number of online only banks set up in the UK over the last decade. Others include Monzo, Atom, and Revolut.
Monzo is reportedly in talks to raise fresh cash from investors but faces a steep writedown in its value due to the COVID-19 pandemic. Deal terms were not disclosed in Starling’s funding round.