Exclusive: Starling’s top investor withdraws support for London IPO
Starling’s elusive billionaire backer has gone cold on his ambition for the digital bank to list in London, Morning Wire can reveal, in a move that will heighten fears of the fintech heading to New York for its highly-anticipated IPO.
Harald McPike had lobbied for the group to launch its initial public offering in London but growing frustrations with progress around reforms to City regulations have led to a change of heart, Morning Wire understands.
“Things will have to move a lot faster or it is out the door sharply,” a person familiar with McPike’s thinking said.
McPike provided a crucial $70m investment to Starling in 2016 during its infancy and retains a stake of around a third according to Companies House filings in February 2025. The Bahamas-based investor is now under the impression Starling is warming to a US listing, a move he had previously pushed back against, sources said.
Over the last year, Starling’s tone towards an IPO has shifted with financial boss Declan Ferguson last summer saying there was no “concrete view” to where the neobank would list and that any decision was still “in flux”.
The change in tone is a departure from the firm’s previous stance, where interim chief John Mountain said the fintech was “very committed” to a London listing, describing the City as a “natural home”.
In an interview with the Sunday Times in January, chief executive Raman Bhatia said he was “non-committal” over a listing venue with an IPO not expected in the short-term.
“Ultimately it’s a decision for shareholders, so we have not concluded on that,” he said.
The McPike Global Family Office, which oversees McPike’s investment activity, declined to comment.
Starling’s regulatory woes
McPike started his career as a blackjack player before founding Bahamas-based quantitative investment manager QuantRes. The Swiss-born Austrian co-led a £60m funding round in February 2020 and £40m in May of the same year to support Starling during the pandemic. He was also named as a participant in the £130.5m internal fundraise designed to build a “war chest” for acquisition.
One source described Starling’s expansion into the US as being at an “accelerated pace”. The bank is understood to be mulling purchasing a lender in the region as a way of obtaining a US banking licence.
McPike’s regulatory frustration marks a blow to the Treasury’s mission to ramp up the City as an attractive venue for scale-ups through tearing up the ‘red tape.’ The Bank of England increased the threshold for MREL, the minimum amount of capital requirements for lenders, last year in a major boost to mid-sized lenders.
But those close to the matter said McPike believes the increase to £25bn-£40bn from £20bn-£30bn fails to shift the dial. Another added concerns with the internal ratings based approach, which historically has disadvantaged challengers through forcing them to hold more risk weight on the same loan than compared with larger banks.
To receive IRB approval banks require decades of downturn data to evidence how their loanbook handles a crash, making the system difficult for new arrivals. Concerns regarding these issues will “come as no surprise” to Treasury officials, Morning Wire understands.
The fintech industry body Innovate Finance has previously raised concerns the banking watchdog’s regulation was creating an “uneven playing field for challengers”. In January, the regulator laid out plans to narrow the competition gap through making the incumbents use standardised calculations for risk management to reduce them from optimising their risk models to hold tiny amounts of capital.
Regulatory hurdles
Regulatory blows have haunted Starling the last year. The digital bank received a major dressing down from the City watchdog after it was slapped with a £29m fine for “shockingly lax” financial controls.
The fine was followed up by hefty losses on the Covid loan scheme – which allowed businesses to borrow up to a maximum of 25 per cent of their annual turnover for support during the pandemic.
The bank took a 25 per cent profit hit after declaring it would turn down £28m of government guarantees on Covid loans.
Starling was accused by a peer of using the scheme as a “cost-free marketing exercise” after failing to properly review borrowers before dishing out taxpayer-backed loans – a claim which Bhatia has branded “utter nonsense”.
A Starling spokesperson said: “As a significant international investor, Harry McPike has meetings with UK officials on his own account. Starling welcomes the Bank of England’s recent update to its MREL framework and continues to maintain regular, constructive dialogue with its regulators.”
They added the bank “welcomes the reforms the LSE is undertaking” and will be “studying” their impact over the coming months.”
“Right now we are focused on the execution of our growth strategy rather than on the timing or location of an initial public offering. That will be for the Board to decide when the time is right.”