Digital banking challenger Starling Bank is set to raise up to £80m in funding this year after its initial projections have fallen short, as it eyes up a slice of the RBS state aid fund and abandons an earlier partnership with fintech unicorn Transferwise.
Starling was rumoured to be seeking £40m in funding in September last year, as it looked to expand its operations into European territories following an initial investment of £48m from quantitative trader Harald McPike.
Speaking to City A.M. this afternoon, a person familiar with the matter confirmed that the digital bank has now doubled that expectation after realising the potential such money could bring to the bank’s future efforts.
A new international advisory firm is to be hired to assist with the round, which suggests that global expansion is most certainly still on the cards for Starling as rival banking challenger Revolut looks to launch in the US imminently.
The source also confirmed that winning the £120m Pool A grant from the RBS fund has become a huge priority for Starling, after it began hiring a team to manage its application and future in small business banking in April this year.
Meanwhile Starling’s association with money transfer service Transferwise, the bank’s first ever third-party partnership since it went live in 2017, has now come to an end.
The source was keen to stress that the separation was completely amicable, with Starling’s own (still in development) international payments business set to support the bank and its customers in the future.