Goldman Sachs invests £50m in Starling Bank, deposits surge by £5bn in one year

Starling Bank has received a £50m investment from Goldman Sachs.

The new cash, still subject to regulatory approval, is an extension of the bank’s oversubscribed £272m Series D funding round in March 2021, which pushed the firm to unicorn status with a £1.1bn valuation. 

Goldman Sachs’ Growth Equity division, which is an active venture investor in the fintech space, stumped up the cash. 

Starling says it now has more than two million current accounts, including 350,000 business accounts with its deposit base surging 600 per cent from £1bn just over a year ago, to now more than £6bn.

Anne Boden, founder and CEO of Starling Bank, says Goldman Sachs will bring “valuable insight” as it expands its lending in the UK, as well as its European expansion and “anticipated M&A.” 

Ireland has been squarely on Starling’s road map for a number of years but the mention of mergers and acquisitions will raise eyebrows in the fintech community.  

As revealed in the AltFi Digital Banking State of the Market Report 2020, the firm is on the hunt for a lending business but so far Starling has not shown its hand.

In addition, Goldman's Marcus brand would seem in direct competition with Starling in terms of its expected trajectory of expanding its products into banking and lending services in the UK.

James Hayward, managing director at Goldman Sachs, said: “Starling is one of the leading and most innovative digital banks in the UK, with an ambitious technology-first leadership team and addressing a deep market opportunity. We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential.”