Starling Bank has withdrawn its application for a banking licence in Ireland at the eleventh hour due to a change in its international expansion strategy, media reports suggest.

The UK bank founded and led by former AIB senior executive Anne Boden had been working with the Central Bank of Ireland on its application since as early as 2018.

Boden reportedly told Starling Bank’s 2,000 employees in a memo today (19 July) that the company had decided to pursue other projects that would yield more value.

“Sometimes changing course is the right option. My job as CEO is to constantly test our thinking against evolving circumstances and to make sure that we are delivering value and maximising potential for growth,” Boden told employees, Sky News reported.

“Ultimately, we felt that an Irish subsidiary would not deliver the added value we are seeking.”

The fintech challenger bank was founded in 2014 and started operations in the UK in 2016. In April 2022, Starling was valued at a whopping £2.5bn after it completed a £130.5m internal fundraising round.

Last March, Starling was valued at £1.1bn following a £272m Series D funding round.

The intention to launch services in Ireland was first made public in 2017, when Boden revealed that Starling was coming to Ireland in the first quarter of 2018. The aim was to use Ireland and a gateway to expansion in Europe. However, the plan was upended by the pandemic.

Starling has been focusing on rolling out its SaaS platform Engine and using a war chest of surplus capital to acquire portfolios of mortgage assets, Sky News reported. It is now likely to acquire a European bank to obtain a licence instead of applying in each country individually.

“We’ll now be focusing on taking our software to banks around the globe through our Software as a Service subsidiary, Engine, and by expanding our lending across a range of asset classes, including through targeted M&A activity,” Boden wrote in the memo.

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