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Starling Bank is examining the case for listing in New York, as the UK digital bank presses ahead with an expansion into the US.
Declan Ferguson, the chief financial officer of the London-based fintech, told the Financial Times that Starling was currently weighing a US listing, where it could potentially achieve a higher valuation.
“We continue to observe what is happening externally with our peers, and also what is happening on the global stage in terms of the UK versus US [stock markets],” he said.
When asked whether the company would be better suited on a US exchange, Ferguson said that Starling had not formed a “concrete view”, and that the final decision over where any potential listing would take place was still “in flux”. He cautioned that the company was in no rush to float.
The possibility of listing in New York would be a shift for Starling. Last year, the bank’s former interim chief executive John Mountain said that the fintech was “very committed” to listing in London, which he described as the company’s “natural home”.
Ferguson, who has been at Starling since 2017, said that while a New York listing might help boost its valuation, the company was first concentrating on growing its US business.
Bloomberg previously reported that Starling is trying to buy a bank in the US.
Starling was founded in 2014 by Anne Boden, the former chief operating officer of Allied Irish Banks. Raman Bhatia took over as group CEO last year.
Starling was valued at £2.5bn in its most recent funding round in 2022.
Boden clashed with investors over fund manager Jupiter’s decision in 2023 to sell its holding at a price that cut Starling’s valuation from £2.5bn to £1bn-£1.5bn, the FT previously reported.
A US listing for Starling would deal a further blow to the London Stock Exchange, which in recent years has suffered from a dearth of listings. Wise, the UK fintech, said last month that it would move its primary listing from London to New York.
Revolut, Starling’s larger rival — which is being valued at $65bn in its latest fundraising round — favours a listing in New York over London.
Revolut and Monzo, another UK digital bank, are also trying to increase their footprints in the US.
Ferguson said that Starling’s attempt to crack the US was, in part, to build “as much optionality as possible” when considering a listing. He said it would be unwise to list in the US for a higher valuation without first growing a US business.
“You have to have a brand there, you have to have presence there, you have to have US revenues there. I think lots of people are talking about it [listing in the US], the challenge is are they doing it for the right reasons?” he added. “For us that is something that is still an emerging view.”
In May, Starling reported that its pre-tax profit dropped by more than a quarter to £223mn in the 12 months to the end of March, as it put aside money to cover potential compliance issues with government-backed loans during the coronavirus pandemic.