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Starling raises £75m and prepares for European drive

The digital-only bank plans launches in Ireland, France and Germany.

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Digital-only bank Starling has raised £75m from investors to fund new services and its push into Europe.

The London-based fintech raised £60m in a series C funding round led by asset manager Merian Global Investors. It also raised a further £15m from an existing investor.

The app-only bank, founded in 2017, has around 500,000 business and retail customers and plans to “accelerate its global expansion, starting in Europe”.

The business will begin its drive in Ireland “later this year” a spokeswoman added. This will be followed by setting up operations in France and Germany, but the spokeswoman would not be tied to a timeframe on these pair of launches.

The fast-growing bank expects to hit one million customers later this year.

The funding comes as a number of UK-based digital rivals such as Revolut and Monzo have added millions of customers in a few short years, while high street players such as Santander or RBS boost their own digital operations to protect their large customer bases.

Starling founder and chief executive Anne Boden (pictured) said: “Building our platform and launching in the UK to provide genuine choice to retail, small and medium sized enterprises and banking-as-a-service customers was just the first step.”

Boden, a former Allied Irish Bank chief operating officer, added: “Our ambition is to use our technology to build a next-generation global, digital banking platform, starting with our launch across Europe this year.”  

Merian Chrysalis Investment Company, a group which specialises in backing late-stage private firms, invedsted £19m in Starling as part of the series C funding round.

Merian Chrysalis co-portfolio manager Nick Williamson said: “Financial services is a market undergoing considerable change, driven by technology and users’ desire for better and more convenient offerings. The Starling team has developed a highly impressive and efficient platform, which we believe positions it well to continue to take share in core banking markets, as well as the ability to offer innovative new services in the future.”

Analysts at Liberum added: "Starling Bank fits well with the assets in Merian Chrysalis' portfolio. They are high growth businesses with proven business models. Merian Chrysalis provides these businesses with the capital and long term support they need to scale up."

Earlier this month, Starling launched a euro account as the UK braces itself for its scheduled Brexit departure next month,

The bank said its Starling euro account is aimed at offering a “secure and simple way to hold, send and receive euros for free”.   

It said the account is useful for a number of customers including European expats living in the UK who send money back home, those who work in the UK but are paid in euros, and workers who frequently move between Eurozone countries.

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