Anne Boden nearly lost a grip on Starling Bank years ago when the neobank was in the middle of a coup effort led by its CTO, but now it looks like Boden who is doing the walking away. The outspoken founder of Starling Bank — which was last valued at over $3 billion, is profitable and has 3.6 million customers — today announced that she would be stepping down as CEO of the company, but would remain on the board.
The statement was made to coincide with the company posting annual results, which showed a rise in revenue, profits, deposits and the loan book compared to the year before. The departure is sudden enough that she is being replaced only by what the company is describing as an interim CEO: COO John Mountain, a longtime employee of the company, is taking on that role.
Boden said in a statement that the reason for the move is because, as the bank grows, it makes sense for the leader to be distinct from someone who is a major shareholder.
“I have spent nearly a decade here as both the founder and CEO, a dual role which is unique in UK banking. It’s been all-consuming and I’ve loved every minute of it,” she said. “Now that we have grown from being an aspiring challenger to an established bank, it is clear the roles and priorities of a CEO and a large shareholder ultimately differ and require distinct approaches. As Starling continues to evolve and grow, separating my two roles is in the bank’s best interests. Handing over my responsibilities to John Mountain will enable me to focus on my position as a shareholder, championing Starling and ensuring we hold true to our values and vision of changing banking for the better.”
We have asked the company to confirm what stake of Starling is currently held by Boden.
The company has raised over $1 billion over the 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 Railways Pension Scheme; and global investment firm Millennium Management (who backed the company in a 2022 round led by Fidelity), Goldman Sachs and JTC.
If there is an underlying story behind the timing of the departure, it’s not completely clear what it is. Starling competes against incumbent banks as well as other neobanks that include the likes of Revolut and Monzo (started by Starling’s former CTO and the focus of that dramatic coup). Generally the Covid-19 pandemic and follow-up economic climate have presented a challenge to all finance-sector businesses when it comes to growth.
The company has built an established business in the U.K. but its international ambitions have never quite come to fruition. In July last year, the company shelved a four-year effort to get a banking license in Ireland — which would have given the company a shot at launching more widely across Europe. The delay was in part due to the Covid-19 pandemic, and while it was slowly working through the approvals process in the aftermath of that, Starling also made the call that international expansion was “no longer a top priority.”
“Sometimes changing course is the right option,” Boden wrote at the time.
The news was timed to coincide with the company reporting annual results. The market has been flooded with neobanks over the last several years that have been leaning on technology to build more dynamic and personalized experiences for customers either looking of a change from the incumbents, or coming to using banking services for the first time. Among those challenger banks, Starling has been an example of how to build that might not have the scale of an incumbent, but is solid nonetheless.
For the year that ended March 31, it posted revenues of £453 million ($560 million), versus £216 million for the year before. Pre-tax profits for the period also grew to £195 million, versus £32 million for same period a year before. It also noted that its lending book now stands at £4.9 billion versus £3.3 billion, with deposits up 17% to £10.6 billion
We’ll update this post as we learn more.