UK-based digital bank Starling Bank has explored the case for a US IPO as it expands into the states.
The fintech expects to potentially get a higher valuation if it lists in New York, as it observes similar scenarios with its peers on a global scale in terms of the two regions’ stock markets. However, the decision regarding a potential listing is not final, and the company is in no rush to float.
US vs UK IPO
Choosing a New York listing is a change of perspective for Starling Bank, as in 2024, it was committed to an IPO in London for a domestic listing. While a US IPO might help boost the fintech’s valuation, the company was first focusing on expanding its US operations. According to Bloomberg, the bank wanted to purchase a bank in the states.
In 2022, Starling Bank was valued at GBP 2.5 billion. After Jupiter, a fund manager, sold its shares in 2023, Starling’s valuation lowered to GBP 1.5 billion. Getting further away from a domestic IPO can further negatively impact the London Stock Exchange, which has experienced fewer IPOs in recent years. Wise mentioned last month that it would move its primary listing from the UK in the US. Revolut also favours New York over London, as it is trying to increase its presence in the region, together with Monzo.
However, the bank deems it unwise to list in the US for a higher valuation without first growing a US business. The fintech wants to expand its brand in the region, making sure that the Us IPO is the right choice for it, and it expands for the right reasons. In May, Starling reported that its pre-tax profit dropped by more than a quarter to GBP 223 million in the 12 months to the end of March, as it put aside money to cover potential compliance issues with government-backed loans during the coronavirus pandemic.
