A London-based tech founder has blasted Starling Bank as “not startup friendly” after claiming her company’s account was closed due to a “worrying” policy from the fintech.
Flown founder and CEO Alicia Navarro said the bank cited the startup having shareholders that are companies as the reason for the closure, despite having used the account for years for her businsess.
According to Navarro, Starling Bank called her this week to say that these shareholders, which she said were venture capital investors, meant the account was in breach of the bank’s terms and would have to be closed.
“I’m astounded,” she wrote in a LinkedIn post. “We’ve been banking with Starling from the beginning, for four years, and have always had VCs as investors. When I said this to them, they said that it is how that we are becoming larger and more successful that they have noticed us.”
Under the terms and conditions of Starling’s business bank accounts, “limited companies and LLPs need all persons of significant control to be a UK resident and natural persons (i.e. no corporate shareholders)”.
Navarro argued that this policy would affect “literally every VC-backed startup in the UK”, to which she said Starling replied, “they can’t do anything. It is now their policy”.
“So… dear startup friends: If you bank with Starling now, you might want to take your money elsewhere before they kick you out unceremoniously,” wrote Navarro.
The Flown founder added that this sends “another worrying message to small businesses setting up shop in the UK”.
UK banking requirements require companies to declare their ultimate human beneficial owner, known as a person with significant control.
This year, fast fashion group Shein got into hot water for failing to disclose its ultimate ownership.
Self-described as the ‘Peloton’ for virtual workspaces, Flown is a hybrid working platform that simulates office environments. The company received a £2.5m seed investment in 2022.
UKTN has contacted Starling Bank for comment.
One of the UK’s biggest challenger banks, Starling has routinely ranked highly in customer satisfaction for both its business and personal accounts in the Competition and Markets Authority (CMA)’s league table.
Starling has, however, come under scrutiny recently, having been handed a £29m fine by regulators in October for inadequate financial crime prevention systems.
Register for Free
Get daily updates and enjoy an ad-reduced experience.
Already have an account? Log in
