Starling Bank fundraise: McPike reduces stake, Chrysalis NAV jumps 6p

By Oliver Smith on Tuesday 9 March 2021

Digital Banking

Some additional details around the bank’s £272m funding announcement.

Starling Bank fundraise: McPike reduces stake, Chrysalis NAV jumps 6p
Image source: Starling Bank.

Following Starling Bank’s blockbuster £272m funding round yesterday, a few extra details have come to light that we’re rounding-up here.

As a reminder, CEO and founder Anne Boden announced an unexpected Series D funding round (on International Women’s Day no less) as her bank snagged a £1.1bn valuation and its long-awaited title as a fintech unicorn.

The Series D funding round was led by Fidelity Management & Research Company with further participation from Qatar Investment Authority, Millennium Management and RPMI Railpen, the investment manager of the £31bn Railways pension scheme.

Cornerstone investor Harald McPike

As Boden last year revealed in her book, Banking On It, secretive billionaire Harald McPike bailed out her fledgeling startup back in 2015 when all other fundraising avenues had been exhausted.

His £48m investment gave him control of the bank with a two-thirds majority shareholding, but no longer.

Yesterday Boden told Sifted that the Bahamas-based investor had sold down his stake as part of the latest round cashing in some of his existing shares and “reducing his holding to just under 40%”.

The move likely has little impact on Boden’s own stake, which has sat at well below the 25 per cent required to be classed as a “person with significant control” by Companies House since 2019.

At the moment McPike’s colleague Marcus Traill is still listed on the bank’s board of directors, but in a transaction of this size, we would typically expect a representative of the incoming investors to join him.

Chrysalis Investments sees NAV jump 6p

While Chrysalis Investments (formerly Merian Chrysalis) did not take part in the latest Starling round, the listed investment fund says it retains an option to take part in the coming months.

As a reminder, Chrysalis has taken part in several Starling rounds, including £100m worth of funding last year alone.

The fund yesterday said it expects its net asset value (NAV) to rise by around 6p when it is recalculated at the end of the month, but Starling’s fundraise will likely be overshadowed by Klarna’s which is expected to add 32p to the fund.

“We believe the likelihood of further value creation for the Company's investors is significant from this asset, and as such, we have negotiated the option for Chrysalis Investments to participate in this round in the coming months," said co-portfolio managers Richard Watts and Nick Williamson.

Chrysalis's share price rose nearly 3.5 per cent yesterday in early trading, before closing up 0.5 per cent.

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