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Goldman Sachs-backed digital bank Starling expects to go public within two years

Goldman Sachs-backed digital bank Starling expects to go public within two years

02 Nov 2021

Starling Bank CEO Anne Boden.

Starling Bank

LONDON — British digital bank Starling expects to go public in two years’ time, CEO and founder Anne Boden said Tuesday.

An initial public offering is “a year or two off,” Boden told reporters. “It’s at least one year away. But we’re talking about one or two years away.”

Starling, which counts Goldman Sachs, Fidelity Investments and Qatar’s sovereign wealth fund as investors, is one of the U.K.’s leading challenger banks.

Along with other start-up competitors like Monzo and Revolut, Starling has attracted millions of users through only an app and a linked payment card — no physical branches.

Boden said Starling’s IPO was likely to take place in London, where the company is headquartered.

“I very much hope we can do it in London,” she said. “I think that would be the default option, unless we’re persuaded otherwise.”

A stock market debut for Starling would add to a series of high-profile floats in the U.K.’s fledgling technology sector.

Fellow fintech firm Wise listed directly on the London Stock Exchange at an $11 billion valuation earlier this year. Food delivery giant Deliveroo had less success with its IPO, with shares sinking as much as 30% on the first day of trading.

Though Britain has produced successful tech companies like Google-owned artificial intelligence firm DeepMind and Arm, the chip designer being sold by SoftBank to Nvidia, it has yet to mint publicly-listed tech companies of a scale matching that of those in the U.S. or China.

Founded in 2014, Starling began life offering fee-free checking accounts through an app. It has since branched into lending and business banking, both of which helped the company break even recently.

The early days of Starling were marred by a bitter dispute between Boden and co-founder Tom Blomfield, who left to start rival online bank Monzo. The spat was the subject of a book released by Boden last year, called “Banking On It.”

“It occurred to me that, up until now, I’d always marked our progress against Monzo, since they were our rival challenger bank and had launched at almost the same time,” Boden said in a new print version of her book, which is due to be released Thursday.

“The extraordinary experiences of the year 2020 made it clearer than ever that our competitors are now Lloyds, Barclays et al.”

Still, the challengers remain some way away from stealing significant market share from much larger incumbents. Starling, which was last privately valued at $1.5 billion, made £97.6 million ($133.2 million) in 2019, a figure that pales in comparison to that of traditional lenders like HSBC, Barclays and NatWest.