Starling to raise £200m amid IPO and acquisition rumours

Starling Bank is said to be embarking on a £200m fundraising round, amid ongoing speculation about a public listing, and acquisition rumours.

According to a TechCrunch report, the challenger bank has hired Rothschild to help secure £200m in funding, which should push Starling towards profitability.

Speaking at a fintech conference last month, Starling Bank’s founder and chief executive Anne Boden said that the bank will “probably” acquire a lending platform within the next year or two, as it seeks to grow its small- and medium-sized enterprise (SME) loan originations.

Boden has also spoken publicly about her aim to bring Starling to the market with an initial public offering (IPO).

Read more: Starling Bank eyes acquisition to grow SME lending

“I didn’t do all this to sell out to a big bank,” Boden told TechCrunch. “I’ve got my sights on an IPO. I’d very much like to do that”.

Starling Bank has raised approximately £363m to date, which includes a £100m grant from the government’s Capability and Innovation Fund (CIF).

It was among the first lenders to become accredited to offer the coronavirus business interruption loan scheme (CBILS), and has pledged to loan £300m through its partnership with Funding Circle.

Starling Bank also has a forward flow arrangement with P2P lending platform Zopa, and it has previously expressed interest in pursuing more partnerships with other alternative lenders.