Challenger bank Starling has raised £75 million from investors to bankroll its expansion into Europe.
Starling secured £60 million from a funding round led by asset manager Merian Global Investors, which was spun out of Old Mutual, and £15 million from Harald McPike, a Bahamas-based fund manager who has pumped millions of pounds into the bank since 2015.
Mr McPike, who runs private investment firm QuantRes, was the first investor to back Starling, which is trying to disrupt the banking sector and take market share from high-street incumbents.
The digital-only bank said the funds will be used to develop new financial products for retail and small business customers as well as help its expansion into the rest of Europe.
It recently set up a post-Brexit hub in Dublin and plans to launch into France and Germany.
Starling has raised £133 million to date and the bank declined to disclose its current valuation.
Founder and chief executive Anne Boden said: “Building our platform and launching in the UK to provide genuine choice to retail, SME (small and medium enterprises) and banking-as-a-service customers was just the first step.
“Our ambition is to use our technology to build a next-generation global, digital banking platform, starting with our launch across Europe this year.”
Nick Williamson, co-portfolio manager at Merian Chrysalis, which is advised by Merian Global Investors, said: “The Starling team has developed a highly impressive and efficient platform, which we believe positions it well to continue to take share in core banking markets, as well as the ability to offer innovative new services in the future.”
Starling was founded in 2014 and operates solely from its mobile app. It has 460,000 current account customers and aims to reach one million customers by the end of the year.
The bank recently launched euro current accounts for UK customers to send and receive euro for free and is bolstering its business banking offering having won a grant from the Royal Bank of Scotland’s incentivised switching scheme.
Starling is also looking to secure a slice of RBS’s capability and innovation fund, with the winners expected to be announced by the end of the month.