Anne Bowden nearly lost her grip on Starling Bank years ago when the neobank was in the midst of a coup attempt led by its CTO, but now it looks like Bowden is walking away. The outspoken founder of Starling Bank — which was last valued at more than $3 billion, is profitable and has 3.6 million customers — announced today that she will step down as the company’s CEO but will remain on the board.
The statement was made to coincide with the company posting its annual results, which showed growth in revenue, profit, deposit and loan book as compared to the year-ago period. The departure is sudden enough that he’s being replaced only by what the company is describing as an interim CEO: COO John Mountain, a longtime employee of the company, is taking over that role.
Bowden said in a statement that the reason for the move is that, as the bank grows, it makes sense for the leader to step aside from someone who is a major shareholder.
“I have spent almost a decade here as both founder and CEO, a dual role that is unique in UK banking. It has been all taking and I have loved every minute of it,” she said. “Now that we have grown from an aspiring challenger to an established bank, it is clear that the roles and priorities of a CEO and a large shareholder ultimately differ and require different approaches. As Sterling develops and growth continues, it is in the best interests of the Bank to separate my two roles. By handing over my responsibilities to John Mountain, I will be able to focus on my position as a shareholder, championing Starling and ensuring that That we stay true to our values and vision to transform banking for the better.
We’ve asked the company to confirm how much of Starling’s stake Bowden currently holds.
The company has raised over $1 billion in the past few years. Its last round was in April 2022, when it raised £130.5 million ($160 million at current rates) from Chrysalis, Fidelity and Altered Capital at a valuation of £2.5 billion ($3 billion at current rates).
Other investors include Qatar Investment Authority (QIA); RPMI Railpen (Railpen), the investment manager for the £31 billion railway pension scheme; and global investment firms Millennium Management (who backed the company in a 2022 round led by Fidelity), Goldman Sachs and JTC.
If there’s an underlying story behind the timing of the departure, it’s not entirely clear what it is. Starling competes against existing banks as well as other neobanks that include Revolut and Monzo (started by Starling’s former CTO and the focus of that dramatic coup; that founder, Tom Blomfield, himself was spun off years ago. And coincidentally was announced shortly before today as the newest participant at Y Combinator).
The COVID-19 pandemic and the subsequent economic environment in general have presented a challenge to all businesses in the finance sector when it comes to growth.
The company has established an established business in the UK, but its international ambitions have never materialised. In July last year, the company suspended a four-year effort to obtain a banking license in Ireland – which would have given the company a chance to launch more widely across Europe. The delay was partly due to the Covid-19 pandemic, and while it is slowly working through the approval process, Starling also said that international expansion is “no longer a top priority.”
“Sometimes changing course is the right choice,” Bowden wrote at the time.
The news was timed to coincide with the reporting of the company’s annual results. Over the past several years the market has been flooded with neobanks that rely on technology to create more dynamic and personalized experiences for customers, either looking for a change from existing ones, or using banking services for the first time. are coming Among those challenger banks, Starling has been an example of how to build one that doesn’t have the scale of an incumbent, but is still solid.
For the year ended 31 March, it posted revenue of £453 million ($560 million), compared with £216 million for the year before. Pre-tax profit for the period also increased to £195 million, compared to £32 million for the same period a year earlier. It also noted that its loan book is now £4.9 billion versus £3.3 billion, with deposits up 17% to £10.6 billion.
We’ll update this post as we learn more.