UK's Starling Bank hits £1.1B pre-money valuation after £272M funding round

Starling Bank Ltd. raised £272 million in its latest funding round, giving it a pre-money valuation of £1.1 billion.

The Series D funding round was led by Fidelity Management & Research Co. along with Qatar Investment Authority, RPMI Railpen and global investment firm Millennium Management, according to a March 8 statement.

The digital lender said the funds will be used to expand lending in the U.K. and will also be directed for its planned launch in Europe and for anticipated M&A. Chief Strategy Officer Declan Ferguson said in September 2020 that the bank intended to raise fresh capital for its expansion plans in Europe, with Ireland to act as a springboard for its growth in the region.

The fundraising comes as the British challenger bank booked its fourth consecutive month in profit, putting it on course to report its first full year in profit by the end of its next financial year, the statement added.

The company's total gross lending has exceeded £2 billion, while deposits have topped £5.4 billion. Since its 2017 launch, the bank has opened more than two million accounts, including more than 300,000 small business accounts, Starling Bank noted.

Rothschild & Co. and Norton Rose Fulbright acted as exclusive financial adviser and legal adviser, respectively, to Starling Bank on the transaction, which remains subject to regulatory approval.