Starling Bank eyes £4bn valuation in secondary share sale
UK fintech Starling is eyeing a valuation of £4bn in a new secondary share sale.
The digital lender is in talks with Morgan Stanley and Rothschild to run the sale process, which the firm is hoping could help it net a valuation between £3.5bn and £4bn.
The sale – the first since the group’s valuation was cut by fund manager Jupiter’s decision to sell its stock in 2023 – will allow shareholders to reduce their stake and introduce new investors, according to the FT.
The move from Starling follows Revolut gearing up for a sale among its employees, targeting a valuation of $75bn.
Starling on expansion pursuit
Starling snapped up fintech peer Ember in a bid to ramp up its services for small business customers last month.
The deal, which Starling did not disclose the price of, will make Ember’s HMRC-recognised software exclusive to the fintech. Ember serves the customers of banking giants including HSBC, Revolut, Barclays and Lloyds.
It also comes as the group sets its sights on the US for major expansion plans.
The neobank, which recorded a £223m profit in 2024 – down from £301m the previous year – has said the North American market offered a “huge opportunity” with chief Raman Bhatia targeting revenue of £100m in the “short to medium term.”
Starling’s chief financial officer Declan Ferguson told Sifted if it was to acquire a US lender, it would re-platform the bank through its SaaS arm as a case study for the technology.
“I think there is a really interesting opportunity to own and operate a regulated bank in the US,” Ferguson said.
Engine – Starling’s banking-as-a-service (BaaS) product – has been viewed as central to its competitive edge.
The division’s contribution to group income was a modest £8.7m in 2024, but this marked a 284 per cent year-on-year increase.