British fintech Starling Bank is targeting a £4bn valuation through a fresh secondary share offering.
The digital banking firm is engaged in discussions with Morgan Stanley and Rothschild to oversee the disposal process, with hopes of achieving a valuation ranging from £3.5bn to £4bn, as reported by City AM.
This sale marks the first since the company’s worth was reduced following fund manager Juniper’s decision to offload its holdings in 2023, and will enable existing shareholders to trim their positions whilst welcoming new investors, according to the Financial Times.
Starling’s initiative comes as rival Revolut prepares for an employee share sale, seeking a $75bn valuation.
Starling’s growth ambitions
Starling acquired fellow fintech Ember last month in an effort to enhance its offerings for small enterprise clients.
The transaction, for which Starling declined to reveal financial terms, will grant the bank exclusive access to Ember’s HMRC-approved software platform. Ember currently supports customers of major banking institutions such as HSBC, Revolut, Barclays and Lloyds.
The acquisition coincides with the group’s American expansion aspirations.
The challenger bank, which saw profits decline to £223m in 2024 from £301m the year prior, has described the North American marketplace as presenting a “huge opportunity”, with chief executive Raman Bhatia aiming for £100m in revenue over the “short to medium term.”
Starling’s chief financial officer Declan Ferguson informed Sifted that any potential acquisition of a US lending institution would involve migrating the bank onto its Software-as-a-Service platform as a technological demonstration. “I think there is a really interesting opportunity to own and operate a regulated bank in the US,” stated Ferguson.
Engine – Starling’s banking-as-a-service (BaaS) product – is seen as a key factor in its competitive advantage.
The division’s contribution to group income was a modest £8.7m in 2024, but this represented a 284 per cent year-on-year increase.
