Starling, the UK challenger Bank has raised a further £75 million investment. The funding is for expansion plans in Europe.

Starling raised  £15 million from an unknown existing investor and £60 million in a Series C round led by Merian Global Investors, including the Merian Chrysalis Investment Company.

Last month, Starling revealed its plans for the new year with a credit card release.

Nick Williamson, Merian Chrysalis co-portfolio manager, adds: “The Starling team has developed a highly impressive and efficient platform, which we believe positions it well to continue to take share in core banking markets, as well as the ability to offer innovative new services in the future.”

Anne Boden, founder and chief executive of Starling Bank, says: “Building our platform and launching in the UK to provide genuine choice to retail, SME and Banking-as-a-Service customers was just the first step. Our ambition is to use our technology to build a next-generation global, digital banking platform, starting with our launch across Europe this year.”

Starling was also getting ready for its Irish licence and Brexit with the launch of euro accounts to provide its UK customers with a way to hold, send and receive the currency for free.

Starling launched its app in May 2017 and says it has built up a customer base of 460,000 personal current accounts and 30,000 SME accounts.

The bank expects to hit one million customers by the end of 2019.

The funding will be used to invest in Starling’s financial products in retail and SME banking as well as banking services in the UK.

How Starling Bank started.

In 2012 the woman who would go on to found Starling Bank, a digital start-up, was on her way to interview for the most high-profile job of her career so far.  Chief operating officer of Allied Irish Bank.

Anne Boden, founder of Starling said:

“I got into a taxi and the driver asked me what I did. I said I was going to see a bank I wanted to work for and the atmosphere changed, he just stopped talking to me.”

“It dawned on me then how much pain the banks had caused. After that, I took the view that you just don’t say you’re a banker, particularly in Ireland. I just told people I worked in technology.”

That wasn’t actually so far from the truth. She had also trained as a computer scientist at university.

Boden would get the job overseeing Allied Irish’s systems

Despite public outrage at the reckless lending, mis-selling and boardroom greed that triggered the great crash of 2008, the banking industry did not seem to want to put customers back at the heart of their operations.

Boden continued, “Banks were so focused on getting rid of their bad loans and reducing their staff headcount that they’d forgotten about customers. Customers had changed, but banks hadn’t noticed.”

By 2014, she had quit Allied Irish and sold her house to fund the launch of Starling.

“Banking was broken and I couldn’t fix the old system, so I decided to build a new one,” she says.

First and foremost, she says, Starling must push the boundaries of what customers can do.

Its smartphone app already shows the bank’s 460,000 current account customers how and where they spend money each month.

Boden is excited about the idea of customers being able to talk to the app using devices such as Amazon Alexa, the digital home assistant. And she can envisage customers one day doing their banking on the road by talking to self-driving cars.

She is certain big banks will fail to keep up. “I used to code programs for the Lloyds bank systems,” she says.

“As the banks got bigger, they bolted on new things on to their old systems – a new software package, or a new business they’d acquired.”

“And the structures became so complex that it became difficult to change anything. It was like spaghetti – if you pull one string, it gets stuck. You can’t untangle it.”