Starling’s results are more proof that high interest rates could be a boon for fintech


Earlier this month, we noticed that several popular American fintech companies were seeing rapid revenue growth thanks to high interest rates. Basically, interest-driven revenue was helping offset declines in consumer trading activity at Coinbase and Robinhood as people pulled back from active trading when the economy soured.


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Part of that economic spoiling was caused by interest rates rising around the world, but with countries taking a more measured approach to interest rate hikes, you could argue that we’re nearing the current economic cycle’s peak rate environment. Regardless, this increase in interest rates has created a massive growth opportunity for fintechs, both public and private.

Enter Starling, a UK-based neobank that has raised $1.1 billion to-date, per Crunchbase. The company’s in the news today due to its long-time CEO and founder Anne Boden stepping down. As TechCrunch’s own Ingrid Lunden pointed out in her piece, if “there is an underlying story behind the timing of the departure, it’s not completely clear what it is.”

But I have a hypothesis. Reading the company’s latest annual report, it’s clear that the neobank is on improving financial footing. For a long-time founder, getting their company to the point of clear success is a reasonable time to take some a break. That’s my guess.

And what is driving Starling’s strong results? There are several contributing factors, but chief among them is — you guessed it — rising interest-based income. Let’s peek at the numbers this morning to see if we can expect other neobanks to enjoy similar gains.

Starling takes flight

In the financial year ended March 31, Starling reported total income of £414.8 million on revenue of £452.8 million. If you’re wondering as to the accuracy of those numbers, rest assured they’re correct. Total income at Starling is the sum of net interest income, net fees and commissions, and other income. Net revenue, meanwhile, is the combination of net interest income, fees and commissions, and other income.

In short, revenue doesn’t discount fees and commissions expenses, which totaled £38 million in the year.



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