Digital lender Starling Bank has extended its latest funding round with a £50m investment from Goldman Sachs.
Last month it announced a £272m Series D funding round led by Fidelity Management & Research which valued it in excess of £1.1bn pre-money.
Starling Bank today said Goldman Sachs investment marked an extension of the oversubscribed round, taking the total raised to £322m.
It said the funding would be used to support its “continued rapid and now profitable growth”.
Since launching in 2017 Starling has attracted more than 2m customers and is one of the few challenger banks to have turned a profit in the past year.
The lender has fared well in the pandemic largely due to its business banking push helped by its participation in the government’s coronavirus lending scheme.
Its gross lending now exceeds £2bn, while deposits have reached more than £5.4bn.
“Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling,” founder and chief executive Anne Boden.
“Goldman Sachs will bring valuable insight as we continue with the expansion of lending in the UK, as well as our European expansion and anticipated M&A.”
Starling Bank has already received attention from City bigwigs Lloyds and JP Morgan. Last autumn it was reported JP Morgan had talked about buying Starling while Lloyds was interested in its technology.
“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,” James Hayward, managing director at Goldman Sachs, said.
“We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential.”