Staff Writer AccountingWEB
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Starling Bank booms with £60m funding and marketplace expansion

After reaching 24 partners and surpassing 100,000 business customers, Starling Bank has no plans to slow down after it announced raising £60m in funding this week.

12th Feb 2020
Staff Writer AccountingWEB
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PayStream, Molo and UnderPinned app interfaces

This week, UK digital challenger bank Starling announced it had raised a further £60m from existing investors, Merian Global Investors and JTC, in the third round of funding in the space of two years. Starling Bank has now received a total of £323m in investment since the start of 2019, including £100m from a government scheme aimed at boosting the UK banking market. The banking giant also announced it would be awarding shares to its 800 employees.

“The support of our existing investors represents a huge endorsement of our business strategy, as we continue to ramp up our growth,” said founder Anne Boden, making clear Starling's intentions to continuing 2020 in the same line of success as the year's predecessor. 

2019 was a successful year for Starling, winning Best British Bank 2019 for a second year in the British Bank Awards, in addition to Best Business Provider and Best Current Account Provider. Adding QuickBooks to its growing list of marketplace partners ensured that the year ended in success for the digital bank. Starling's partners currently include the likes of Xero, FreeAgent, Digital Risks, CyberSmart, Tail, Nimbla, Anorak and Sparqa Legal, amongst others.

The six-year-old digital bank evidently intends to continue 2020 in the same vein, announcing last week (5 February) the addition of three new business partners to its marketplace. Last week, Starling announced Paystream, UnderPinned, and Molo would join its business banking marketplace, pushing its business customer figure above 100,000.

A killer year for Starling Bank

Last year saw the banking giant pass 1m customer accounts, reach £1bn in deposits, and raise £205m in funding. It also doubled its number of employees, surpassing 900, and opened two additional offices in the UK and one in Dublin.

In 2019, Starling was the only digital bank to sign the Authorised Push Payment (APP) scams voluntary code that was established by the Payment Systems Regulator (PSR) in February 2018. As a result, Starling will soon be adding new confirmation of payee rules that will require further payment information to be checked against the actual account. Reimbursement is also provided from the bank in the case of a successful scam. 

In an update, Boden stated: “In fact, we built the Confirmation of Payee function early and were ready to go with the original deadline in 2018. We were hugely frustrated that the deadline was repeatedly pushed back by the industry.”

2020 Starling partnerships

The addition of PayStream, UnderPinned and Molo takes Starling’s number of partners to 24. 

Commenting on the new partnership, Starling CEO and founder Anne Boden explained why diversity within its partners was important. “Today’s entrepreneurs have grown accustomed to operating in a world where digital services are crafted around their particular needs. They expect the services they are offered to match closely with their business types, locations, and customer demographics.”

PayStream: Digital accounting software for contractors 

PayStream supplies accountancy, payroll and IR35 review services to contractors and freelance workers. It covers an umbrella service, CIS service, limited company services and an IR35 review service.

Managing director Paul Malley described PayStream’s new IR35 review service as “helping customers impacted by the IR35 tax rules as a result of the new off-payroll working legislation due to come in this April.”

Molo: Online buy-to-let mortgage lender 

In 2018, Molo launched as the first entirely digital, paperless mortgage lender. Claiming to ‘make real-time lending decisions’, Molo simplifies the buy-to-let mortgage process by removing mortgage intermediaries and being entirely online.

Speaking about its partnership with Starling, Molo CEO Francesca Carlesi said, “having the support of Starling, an organisation creating such positive change in the industry, is invaluable.”

UnderPinned: Freelance career management platform

The one-year-old company UnderPinned helps freelancers find and manage work, in addition to managing payment. The company recently released a virtual office platform, which manages a wide range of areas within freelancer’s working life including portfolios and automated contract payments.

UnderPinned CEO Albert Azis-Clauson said the platform “helps freelancers build sustainable and fulfilling careers”. In joining the Starling Marketplace, UnderPinned will “be able to improve the working lives of thousands of more freelancers through our online platform. We’re confident that this natural synergy will lead to a long-lasting and fruitful partnership.” 

As with all Starling partners, the three new partners will be covered Starling’s no hidden mark-up promise, ensuring account holders pay the same fees via Starling as going direct with the provider.

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