Starling Bank Acquires UK Fintech Firm for Small Business Expansion

Starling Bank has snapped up its UK fintech peer Ember in a bid to ramp up its services for small business customers.

The London-based firm said as part of the takeover, Ember’s tax and bookkeeping software will be built into Starling’s app and online bank.

The deal, which Starling did not disclose the price of, will make Ember’s HMRC-recognised software exclusive to the fintech. Ember serves the customers of banking giants including HSBC, Revolut, Barclays and Lloyds.

Declan Ferguson, Starling’s chief financial officer, said the takeover represented Starling’s role as a “natural fintech consolidator”.

He added the “targeted acquisition” of Ember was a part of the group’s wider strategy for UK development and pushing its banking-as-a-service product Engine overseas.

Small business banking soars

The fresh takeover comes as neobanks expand into the small business banking space in recent years, as traditional lenders turn away.

Starling has a nine per cent share in the space and faces competition from the likes of Allica Bank and OakNorth. High street lender Metro Bank has also announced a recent pivot from retail banking towards specialist lending with a target of small- and medium-sized enterprises (SMEs).

Research from the British Business Bank in March revealed challenger banks make up around 60 per cent of gross lending, compared to nearly two decades ago where the four largest banks made up 90 per cent of SME lending.

But recent data from banking industry body UK Finance suggested legacy lenders may be looking to make their return as loans from high street banks to small businesses reached their highest since 2022 in the first quarter of 2025 at £4.6bn. This marked a 14 per cent year-on-year jump.

Starling’s acquisition of Ember also comes as fintechs across the UK look to diversify their revenue streams in a bid to become less reliant on net interest income.

Monzo confirmed this week it is exploring plans for mobile phone service, which follows suit with rivals Revolut and Klarna.