Starling Bank has raised £40m from investors as small businesses turn to lenders for support during the Covid-19 crisis.
The digital bank said it has seen a “robust” number of new customers setting up accounts.
Many of these have been businesses, with an acceleration in daily sign-ups since the beginning of the year. “The lockdown has accelerated the shift to digital channels,” app-based Starling said.
The business said it will use its funding to help small firms get through the crisis, which may be of interest to events businesses yet to secure emergency funding. “The new funding will enable the bank to continue its rapid growth and help it provide much-needed support to small business customers who have been hit by the coronavirus emergency,” it said.
Chief executive Anne Boden said: “This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever.”
Starling is lending money to businesses under the government’s coronavirus business interruption loan scheme (CBILS) and the bounce-back loan scheme.
The cash the bank raised comes just months after another fundraising push in February won it £60m from investors. The funding round was led by investment firms JTC and Merian Chrysalis Investment Company Limited. It brings the total raised by Starling to £363m since it was launched in 2014.
Starling, which claims the title of Europe’s fastest growing bank for small and medium-sized enterprises, has captured 2.6% of the SME market in the UK. It has lent almost £500m to small firms, and further commitments will double this to nearly £1bn. It has over 1.4m current accounts, 155,000 of which are held by businesses.
The app launched in May 2017, and it has more than £2.4bn on deposit.