Challenger bank Starling today said it will hand out shares to all 800 employees after raising £60m to boost its expansion plans.
The cash injection, led by existing investors Merian Global Investors and JTC, brings the total raised by Starling to £323m and follows two funding rounds of £105m last year.
The digital bank said it will use the funds to speed up its expansion plans. The firm has been plotting the launch of an international bank in Dublin after applying for a licence last year.
In addition, Starling said it will give shares to all 800 of its employees.
“The support of our existing investors represents a huge endorsement of our business strategy, as we continue to ramp up our growth,” said Anne Boden, founder and chief executive of Starling.
“We could not do this without the support of our 800 employees, who work so hard to provide a better banking experience for our customers, giving them more control over their finances. So I’m thrilled to be giving shares to them.”
It comes ahead of a bumper funding round for rival challenger bank Revolut, which is reportedly set to value the company at $5bn (£3.85bn). Monzo and Monese have also been linked with new funding rounds in the first half of this year.
Starling has opened 1.25m accounts for consumers and small businesses since its launch in May 2017, and the bank now holds more than £1.25bn on deposit.
It comes after a top think tank urged big companies to increase the number of their shares owned by staff.
The Social Market Foundation (SMF) called for a new government campaign to encourage firms to spread ownership among workers via employee share schemes.
Starling is joining some of Britain’s largest employers — including Tesco and Greggs — in offering a share scheme, but the system is used by only a minority of companies.
The SMF called on the government to set a target for large listed companies setting up share schemes and to publish league tables tracking their progress in hitting these aims.
“Good companies already know that helping workers become co-owners is good for business and good for employees,” said SMF director James Kirkup.
“Government should now use its voice to make clear that helping employees take a stake in the firm should be standard procedure for all companies as they meet their responsibilities to the society they operate in.”