Friday 29 January 2021 1:43 pm

US investment giant Fidelity in talks over £100m Starling Bank stake

US finance giant Fidelity is said to be in discussions over taking a £100m stake in Starling Bank amid surging interest in digital lenders.

Fidelity Management & Research (FMR), which manages trillions of dollars in assets, is in advanced talks to lead a fresh round of funding worth £200m, Sky News reported.

The US investment giant would contribute half of a new cash injection, with other blue-chip investors said to be in talks over the fundraising.

Starling last year kicked off its hunt for new capital when it hired advisors at Rothschild to explore interest among investors.

The challenger bank, which was founded in 2014 by Anne Boden, has raised £363m to date, including £100m from the RBS bailout fund.

In October the lender booked its first ever monthly profit — an achievement that is likely to draw increased interest from private equity backers.

It is unclear what valuation would be attached to Starling after the latest fundraising round.

The bank now has more than 2m accounts, of which just over 300,000 are small business customers.

In November the Times reported that both Lloyds and JP Morgan had expressed an interest in buying Starling.

But the lender’s board, led by City veteran Oliver Stocken, has reportedly opted to move ahead with further funding ahead of a possible stock market listing in the coming years.

JP Morgan has since confirmed it is pressing ahead with plans to launch a new UK digital bank in the coming months.

Starling and Fidelity declined to comment.

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