Starling Bank applies for £35m grant from BCR
Starling Bank has applied for another £35 million from the Banking Competition Remedies (BCR), Yahoo Finance reports.
The UK challenger bank was awarded £100 million last year by the EU-backed competition fund.
It has applied for two separate grants, worth £25 million and £35 million respectively. The grants would come out of a new pool of funding offered by BCR.
Applications for grants opened two weeks ago, with recipients expected to be announced in September.
Other fintechs applying for grants include Tide and Clearbank, Trade Ledger and Equifax, and Funding Xchange.
Starling’s CEO, Anne Boden, tells Yahoo Finance that the grants would be used for to build new products for small and medium-sized enterprises (SMEs).
“We are doing well and therefore we believe it’s in the interest of competition in the UK for us to be given an additional grant of £35 million in order for us to be competitive in new sectors of SMEs,” says Boden.
To date, the start-up has raised more than £360 million in equity funding, and currently serves around 180,000 SMEs.
“We’re very pleased with what we’ve done,” Boden adds. “We’ve managed to build a very successful, high-growth SME business, we now have something like 3% of market share and we’re a safe pair of hands to be honest.
“We have over delivered on everything that we’ve promised, and we feel as if that next stage for us now is to put ourselves under the next level of scrutiny.”
If successful, the challenger hopes to build products which will tap harder to reach areas of the SME market, such as non-profits and companies with complex ownership structures.
BCR’s £775 million ‘alternative remedies’ fund was set up by RBS to boost competition in the UK’s banking sector.
Starling landed £100 million from this fund last year and said it would spend the fund over four years. It has already used some of the fund to build its marketplace and develop services such as cheque imaging.
Other recipients of BCR’s fund – namely – Metro Bank and Nationwide – had to hand back a collective £100 million.
Nationwide cited the current economic crisis. Metro Bank was still recovering from its accounting scandal.
“If you think, money has been given back by organisations that felt they couldn’t deliver,” Boden tells Yahoo Finance. “If you look at all the commitments, Starling has delivered everything it’s promised and therefore we’re a safe bet for the next award of money.”