Digital only UK bank Starling has raised £272m ($376m) from backers including Fidelity and Qatar's sovereign wealth fund.
Starling on Monday said that Fidelity had led its "Series D" funding round, which included cash from the the Qatar Investment Authority, the UK's Railways pension scheme, and hedge fund Millennium Management. Starling was valued at £1.1bn pre-money in the deal. The transaction still requires regulatory approval.
"Digital banking has reached a tipping point," Starling's founder and chief executive Anne Boden said in a statement. "Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services.
"Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence."
Starling said the new funds would be used to increase lending in the UK, drive expansion into Europe, and for possible M&A opportunities.
Starling was founded in 2014 as one of the UK's first digital-only banks. The company was conceived entirely around the smartphone and lets customers do everything from open accounts to apply for loans digitally.
Today, the bank has over 2 million customers including 300,000 business account holders. It has seen its loan book grow rapidly over the last year thanks to participation in government-backed business support loan schemes. The bank holds customer deposits of £5.4bn and has lent over £2bn.
Starling provided a trading update alongside its funding announcement. The bank said it was on course to report its first full year of profitability, following four straight months in the black. Net income is running at £1.5m per month, the bank said, and revenue in January was up 400% on last year.
In a separate announcement on Monday, rival digital-only bank Atom said the value of business loans on its balance sheet had tripled to £700m over the last 12 months. The bank credited participation in the government's coronavirus business interruption loan scheme (CBILs). Atom said it hoped to take part in the successor to CBILs, announced in last week's budget, the Recovery Loan Scheme.
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