Starling Bank has acquired its UK fintech rival Ember as part of efforts to enhance its offerings for small business clients.
The London-headquartered company announced that through the acquisition, Ember’s taxation and bookkeeping platform will be integrated into Starling’s mobile application and digital banking services, as reported by City AM.
The transaction, for which Starling has not revealed financial terms, will grant the fintech exclusive access to Ember’s HMRC-approved software. Ember currently supports clients of major banking institutions including HSBC, Revolut, Barclays and Lloyds.
Declan Ferguson, Starling’s chief financial officer, described the acquisition as reflecting Starling’s position as a “natural fintech consolidator”.
He noted the “targeted acquisition” of Ember formed part of the group’s broader blueprint for UK expansion and international deployment of its banking-as-a-service offering Engine.
Small business banking soars
The latest acquisition emerges as digital banks broaden their reach into the small business banking sector in recent years, whilst established lenders retreat.
Starling commands a nine per cent market share in this arena and encounters rivalry from players such as Allica Bank and OakNorth. High street institution Metro Bank has similarly unveiled a recent strategic shift from consumer banking towards specialist lending focused on small- and medium-sized enterprises (SMEs).
Analysis from the British Business Bank in March disclosed that challenger banks constitute approximately 60 per cent of gross lending, contrasting with nearly two decades prior when the four dominant banks controlled 90 per cent of SME lending. However, recent figures from the banking industry body, UK Finance, suggest that traditional lenders may be planning a comeback as loans from high street banks to small businesses hit their highest level since 2022 in the first quarter of 2025, reaching £4.6bn, a year-on-year increase of 14 per cent.
The acquisition of Ember by Starling also comes at a time when fintechs across the UK are seeking to diversify their revenue streams in an effort to reduce their dependence on net interest income.
This week, Monzo confirmed it is considering plans for a mobile phone service, following in the footsteps of competitors Revolut and Klarna.
