Starling Bank is set to break even in the UK by the end of 2020, its founder and chief executive has said, after revealing that its user numbers have doubled in the last eight months.
In her annual letter, Anne Boden said the fintech firm’s account total – spanning both business and retail users – had risen to 775,000, up from 385,000 at the end of 2018.
The bank is now on track to reach 1m accounts by the end of this year, while deposits are expected to surpass £1bn over the same period. It reported a loss before tax of £26.9m last year.
Starling, which is one of the digital banking sector’s three largest players alongside Monzo and Revolut, has now entered “hyper growth”, according to Boden.
The amount of active customers depositing their salaries into retail accounts – a metric coveted by challenger banks seeking consistent revenue – has reached 32 per cent.
Boden said the business reported a 150 per cent increase in its annualised revenue run rate since November last year. Meanwhile its workforce has grown 170 per cent, topping 600 staff across the UK.
Starling is in the process of securing a second bank licence in Ireland, in order to retain financial passporting rights across Europe post-Brexit.
Boden said the bank will soon open offices in Cardiff, the Netherlands, France and Germany, in addition to existing locations in London, Southampton and Dublin.
The fintech firm secured £75m in funding in February, bringing on board its first institutional investor Merian Global Investors. Prior to that round, the bank had been solely funded by Austrian billionaire Harald McPike.
The bank also won a £100m grant from the RBS Remedies Fund that month, a scheme aimed at increasing competition in the small business banking sector.
Boden said Starling is now targeting a market share of 6.7 per cent in business banking within five years.
“Lots of companies pursue growth and don’t care about profitability,” she said.
“… What we’re doing now is expanding our product range and innovation hand-in-hand with growing our businesses, with a clear path to reaching profitability.”
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