London-based digital bank Starling has been awarded a €115 million grant from the Capability and Innovation Fund (CIF). This comes just a week after Starling Bank raised €85.5 million to expand throughout Europe.
The bank has pledged to use the money to create 398 new jobs in the UK and to invest €109 million of its own money to help build a better bank for SMEs.
With the help of the grant, Starling will make €1 billion in lending available to SME customers by the end of 2023. It expects to achieve a 6.7% market share within five years.
The grant comes from a €890 million fund created as a condition on RBS for accepting a €52 billion bailout during the financial crisis. Today, Banking Competition Remedies, the independent body set up to distribute the funds, announced Starling as one of three recipients of the first round of grants.
Founded in 2014, Starling Bank operates personal and business current accounts, a marketplace and payment services for banks, e-money institutions, government and corporates, as well as Banking-as-a-Service. It received its banking licence in 2016, and since launching its mobile banking app in May 2017, it has opened 500,000 current accounts, including more than 30,000 SME business accounts signed up in less than a year.
The grant will accelerate Starling’s ability to reshape the SME banking market, further invest in proprietary technology and build out its UK-based customer service and support team. Because Starling understands that many SMEs want to manage their banking online as well as through mobile apps, it will launch a web portal for SME banking customers later this year.
“Starling Bank is delighted to have received this award,” said Anne Boden, Starling’s founder and CEO. “It will accelerate our ability to reshape the SME banking market. Starling will deliver an advanced fully-digital offering that connects SMEs with the financial solutions they need to thrive. This is the opportunity to bring new technology and a new approach to the sector.”