Mobile-only Starling Bank is looking for a further £80m ($106m) in funding.
Founded by Anne Boden, the challenger bank wants to raise new funding to help support its newly launched business banking account. To date, Starling had been solely funded by hedge fund manager Harald McPike who handed over £48m and owns over 50% of the firm.
Starling is also competing for a £120m grant from RBS’ Capability and Innovation Fund, which was a condition of the incumbent bank’s £45bn bailout.
It is rumoured to be up against TSB, Santander, Metro Bank and Clydesdale Bank for the grant. Boden has previously been vocal about how handing the money over to a larger, incumbent bank would merely entrench the bigger banks, rather than help innovation.
In addition, Starling has ended its partnership with TransferWise as they were both operating in similar areas in payments. Boden believed her bank could “provide a better user experience by doing it ourselves”.