Starling Bank is mulling an IPO in New York amid a wider US expansion, marking another potential body blow to UK public markets.
The neobank is one of Europe’s largest, is profitable and hit a valuation of £2.5bn when it last raised in 2022. It’s the second fintech darling to turn its nose up at the London Stock Exchange in as many months, with Wise announcing it would shift its primary listing across the Atlantic in a bid to attract more investors and increase its valuation in June.
The likelihood of achieving a higher valuation in the US was one of the key reasons Starling was considering a float across in New York, CFO Declan Ferguson told the Financial Times.
“We continue to observe what is happening externally with our peers, and also what is happening on the global stage in terms of the UK versus US [stock markets],” he said.
With speculation mounting over when and where fellow UK neobank Revolut will IPO, CEO Nik Storonsky said that it was “not rational” to float in London.
Founded in 2014 by former banking veteran Anne Boden, Starling banks and lends to both retail customers and small and medium enterprises (SMEs) and is one of the UK’s largest neobanks, with more than 4m customers and £12.1bn in deposits.
The fintech has raised more than $1bn from investors including Goldman Sachs, Fidelity Investments and the Qatar Investment Authority.
A US listing would be a change of direction for Starling, with the bank’s former interim chief executive John Mountain saying last year that the neobank was committed to an IPO in London.
Unlike rivals Monzo and Revolut, Starling is yet to branch out to other countries. The fintech told Sifted in June it was exploring expanding to the US by obtaining a banking licence or acquiring a mid-tier bank, amid a loosening of regulation in the country.
The US push follows a tricky period for the neobank, which has seen its financial controls come under fire, resulting in a fall in profits in its latest annual results.
This was due to a £29m anti-money laundering fine levied by the UK’s financial regulatory body, and its involvement with a government-backed loan scheme during the Covid pandemic known as the Bounce Back Loan Scheme (BBLS).
In June, tech leaders told Sifted Wise’s ditching of its UK primary listing not only signalled to the struggles of Europe’s public markets, but could also impact already scarce late-stage funding in the region and force scaleups to consider relocation to the US earlier in their growth journeys.
“Wise shifting its primary listing to the US is not just a blow to London — it’s a signal that Europe as a whole is struggling to remain relevant in the next phase of global tech financing,” Claire Trachet, founder of advisory firm Trachet, said of Wise’s decision.
“If Europe can’t offer a viable, attractive path from Series A to IPO at scale, it won’t just lose listings — it will lose its pipeline of future champions and that’s the bigger risk.”
Read the orginal article: https://sifted.eu/articles/starling-mulls-us-listing/
