The British digital bank Starling has decided to withdraw from the competition for a European banking licence, which is a major setback for the company’s plans for global expansion.
Four years after beginning the process, the company informed its personnel on Monday that it had withdrawn its application for a bank licence from the Irish central bank. The Covid-19 pandemic caused the digital lender to briefly halt negotiations with regulators in 2020, which was a setback for Starling’s application at the time.
CEO Anne Boden informed colleagues in a memo on Monday that Starling will instead concentrate on marketing its software-as-a-service product and growing into new lending sectors in order to assist banks with their digital transformation goals. The message was first reported by Sky News, and a Starling spokeswoman later confirmed it to CNBC.
The information is disappointing for Starling’s intentions to grow across Europe. Starling has attracted funding from such well-known investors as Goldman Sachs and Qatar’s sovereign wealth fund on the premise that it can succeed outside of its home market.
One of the biggest online-only banks in the U.K., Starling has more than 3 million customers, 500,000 of which are businesses. It faces opposition from a number of well-known fintech companies operating in the nation, including Revolut and Monzo, as well as from its backer Goldman, which provides savings accounts through a digital banking brand known as Marcus.
The privately held company’s most recent valuation, which was $3 billion ($2.5 billion) in April, was double what it was in a 2021 fundraising round.
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