Investments

UK Digital Bank Starling Raises $49 Million In Latest Funding Round

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Starling, a United Kingdom-based digital bank, has raised $49 million in a funding round led by its investors Merian Chrysalis Investment Co. and Harald McPike, founder of QuantRes, Yahoo! Finance reported.

The latest infusion comes just months after the digital bank raised $74 million from investors. Since its founding in 2014, the company has raised more than $443 million.

“This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever,” Starling founder and CEO Anne Boden said in a statement.

The bank’s target is small and medium-sized businesses (SMBs) and individuals across the United Kingdom and Europe.

Starling boasts more than 1.4 million accounts, including 155,000 business accounts, and holds a 2.6 percent share of the U.K.’s SME banking market.

Starling is among the group of banks that have been given permission to provide emergency government-backed loans to businesses under the Coronavirus Business Interruption Loan Scheme (CBILS). The initiative offers financial support to smaller businesses in the United Kingdom that have been hurt by COVID-19.

In early May, Boden told the Treasury Select Committee Starling was “very, very keen to start lending as soon as possible,” pending authorization.

Still, some have been disappointed with the digital bank’s handling of the bailout programs, The Times reported.

Critics said Starling promised to offer government support loans to new customers and then reversed its decision.

Boden wrote in a recent blog post, “The urgency of the current situation means that we have to launch at scale practically from a standing start ... So we want to be fully upfront about this: we may need to make adjustments as we go. We hope our customers and the wider community will understand this.”

In addition, Boden took to Twitter to say she was “really sorry to disappoint customers”and said she was “listening” to feedback from customers.

Starling faces competition from several online banks that have been launched in the last decade including Monzo, Atom, and Revolut.

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