The fintech firm led by Anne Boden has raised more than £270m from investors as it prepares for expansion into the European market.
Fintech challenger Starling Bank has raised £272m in a funding round that values the company at £1.1bn.
The Series D round has been led by Fidelity Investments, with Qatar Investment Authority, railways pension scheme manager Railpen, and Millennium Management all participating in the raise.
The London-based bank, which has 2m accounts, plans to invest heavily in growth through both international expansion and acquisitions.
Led by former AIB chief operating officer Anne Boden, Starling Bank has been one of the core players in the British fintech scene along with Monzo and Revolut. But unlike its rivals, Starling has focused only on its home market so far.
That is about to change it is pursuing a banking licence from the Central Bank of Ireland that would allow it to operate around the EU. Starling had planned to be operational in Ireland several years ago, however plans have hit a few snags and delays along the way.
The company has also placed a lot of attention on business banking and has 300,000 small business accounts.
According to Starling, it booked revenues of £12m in the month of January and is profitable with monthly net income of more than £1.5m. It expects to close the year with a profit. Its gross lending is now more than £2bn while it holds deposits over £5.4bn.
Boden said that digital banking has now reached a “tipping point”.
“Customers now expect a fairer, smarter and more human alternative to the banks of the past and that is what we are giving them at Starling as we continue to grow and add new products and services,” she said.
“Our new investors will bring a wealth of experience as we enter the next stage of growth, while the continued support of our existing backers represents a huge vote of confidence.”