UK-based digital bank Starling Bank has considered the possibility of an Initial Public Offering (IPO) in the US as it expands its operations into the American market.

The fintech believes that a New York listing could potentially fetch a higher valuation for the company. This is similar to what Starling observes among its peers when comparing the two regions’ stock markets. However, the final decision on an IPO remains undetermined, and Starling has no immediate urgency to go public.

US vs UK IPO

Starling Bank’s perspective shifted from a planned London listing in 2024 to considering a US IPO. The bank aimed initially for a domestic market IPO but now sees opportunities in the United States, given that it intends to purchase a bank there.

In 2022, Starling Bank was valued at GBP 2.5 billion. Following the sale of shares by Jupiter, a fund manager, its valuation dropped to GBP 1.5 billion in 2023. This decrease in valuation could further impact the London Stock Exchange, which has seen fewer IPOs recently.

Companies like Wise and Revolut have also expressed preferences for listing in the US over the UK as they seek to strengthen their presence in North America along with Monzo.

However, Starling Bank is cautious about pursuing a higher valuation through an American IPO without first establishing a robust US business. The company aims to grow its brand and ensure that any potential IPO will be well-timed and justified by significant growth.

Financial Overview

In May 2024, Starling reported a 27% drop in pre-tax profits to GBP 223 million for the fiscal year ending March. This decline reflects efforts taken to cover potential compliance issues related to government-backed loans during the coronavirus pandemic.