U.K. digital bank Starling has seen its valuation double to over £2.5 billion ($3.15 billion), the Financial Times reported Tuesday (April 26).
Starling is reportedly trying to build on the expansion it experienced over the pandemic, considering an initial public offering (IPO) within a few years.
This comes as the company recently raised £130.5 million ($164 million) to help make a “war chest” to facilitate more acquisitions. The bank has put £400 million ($503 million) aside to help it make acquisitions and will be looking at several possible targets, unnamed sources told the FT.
According to the report, the bank has tapped its existing investors to help with the funding. The investors include Goldman Sachs, Fidelity Management and Research Company and the Qatar Investment Authority.
According to the report, Starling had originally courted retail customers for the most part. During the pandemic, it pivoted to target companies and worked on beefing up its loan book with over £2 billion ($2.5 billion) of lending through the government’s COVID business support programs.
Some of those government programs have been criticized for levels of fraud involved, the report noted. Lord Agnew, the minister responsible for counter fraud in the Treasury and cabinet officer, resigned at the start of the year, saying he couldn’t stand by the government’s record on handling fraud.
Starling did make an acquisition last year — its first one ever — with its purchase of Fleet Mortgages, a Hampshire buy-to-let mortgage group.
PYMNTS wrote that Starling had boycotting advertising on Facebook and Instagram over parent company Meta’s failure to deal with scammers, according to Starling CEO Anne Boden.
Starling quit advertising with Meta in late 2021.
“We want to protect our customers and our brand integrity,” Boden said in the letter. “And we can no longer pay to advertise on a platform alongside scammers who are going after the savings of our customers and those of other banks.”