British digital lender Starling Bank said it had chopped its losses by more than half and was on track for full-year profitability, as it eyes a potential float at the end of next year.
Starling reported a loss of £23.3m in the 16 months to the end of March 2021 – less than half its £52.1m loss in the year to November 2019 – in a trading update on Thursday morning.
The challenger bank’s revenues jumped 600 per cent to £97.6m from £14m in its 2019 results, as it benefited from a surge in business lending helped by its participation in the government’s coronavirus support scheme.
Starling’s gross lending is now £2.2bn, while deposits have reached £5.8bn.
The bank’s books have expanded as customer account numbers more than doubled to 2.1m, which it said led the bank to break even for the first time in October 2020.
Since then, it’s been one of the few challenger banks that has made a profit each month.
Founder and CEO Anne Boden said she could float the bank by the end of 2022 or in early 2023 but was not going to rush into a flotation, despite the UK government’s proposed easing of rules to make London IPOs easier for fintechs like Starling.
“We’re going to do it in our time,” she said. “We’re not going to be forced to do it because it’s fashionable at the moment.”
Meanwhile, Starling’s deputy chief financial officer Declan Ferguson said the biggest achievement for the company so far had been reaching profitability last October, and that the bank was now “very much on track to post full year profitability” in 2022.
It comes three months after Starling announced it had secured a £50m investment from Goldman Sachs in its latest funding round.
Starling’s Series D funding round led by Fidelity Management & Research valued it in excess of £1.1bn pre-money, and following the Goldman investment, raised a total of £322m.