LONDON – Startup bank Starling spent £8 million last year building its app-only banking platform, accounts revealed.
Starling spent £8.3 million in the year to November 2016, most of which went on “designing, building, and testing the software to support the banking platform,” according to accounts filed with Companies House last week.
Starling is one of a number of so-called “neobanking” startups in the UK that are aiming to build an app-only bank. Others include Monzo, Revolut, and Tandem.
Starling values the platform it has built at £5 million, according to the accounts. Total assets for the year were £15.3 million, while liabilities were £2.3 million.
- READ: ‘Big banks want to come see us every week’: Starling CEO Anne Boden on building a bank from scratch
Starling launched to the public in March of this year and the accounts show the startup made a pre-tax loss of £4.3 million in 2016 and had an income of just £12,834, mainly from interest on balances held at other banks.
Despite the high costs and low income, Starling’s directors say in the “Going concern” section of accounts that they have “reasonable expectations” that the company can continue. The bank says it has the continued support of its main investor, US quant trader Harold McPike.
Starling says in its account that it had a “significant further capital investment has been raised” from McPike that is in escrow that will be released when Starling is granted its full banking licence from Britain’s watchdog, the Prudential Regulation Authority (PRA).
- Starling Bank
The PRA lifted restrictions in April and Starling’s CEO and founder Anne Boden confirmed to Business Insider that McPike injected £30 million into the business at the time. That sum is part of the $70 million McPike invested in January 2016 and that has been vesting in tranches since then.
“We have plenty of money in the Bank of England and everything is fine and on schedule,” Boden told Business Insider.
£1 million of McPike’s funding injection will go towards paying bills Starling incurred in preparing its banking licence application, accounts show.
Starling received a restricted banking licence last July and began rolling out current accounts to staff and friends earlier this year. CEO Anne Boden told Business Insider in April that the bank had around 500 customers.
Starling spent £3.2 million on staffing costs in the year to November 2016, with an average of 31 employees working for the company over the period. The startup’s highest paid director, who is not named, made £172,880 in wages and social security contributions.
Starling’s accounts also show that CEO Anne Boden, who owns 29% of the company’s stock, is still owed an interest-free loan of £253,564, made prior to 2015.