Fintech

Starling Bank snaps up UK accounting startup Ember

Starling's acquisition of Ember marks its first since it acquired Fleet Mortgages in 2021.

Starling Bank is buying a UK accounting startup, as it looks to provide a beefed-up offering for its small business customers.

London-based Ember, founded in 2018, provides tax and bookkeeping software.

Ember is backed by N26 investor Valar Ventures, fintech investor Viola Fintech and European fintech investor Shapers.

The deal is said to be worth less than £10 million, according to Bloomberg.

Starling, one of the UK's most prominent challenger banks, said the deal, its first since it acquired Fleet Mortgages in 2021, would mean it could now offer its 500,000 SME customers an "all-in-one solution to manage their finances, from bank transactions to tax submission”.

Starting’s purchase of Ember comes ahead of new rules coming in next year, known as "Making Tax Digital", which means businesses with a gross income of above £50,000 have to report their income and expenditure every quarter, rather than yearly, to HMRC.

Starling plans to integrate Ember’s software by the end of 2025, to help those businesses comply with the new rules.

Starling says it has a nine per cent market share for small business banking in the UK.

Ember's current clients includes the customers of HSBC, Revolut, Barclays and Lloyds but Starling says its software will now become exclusive to Starling and will discontinue Ember’s advisory services.

Adeel Hyder, Starling Bank’s managing director, SME Banking, said: “Ember’s platform is beautifully designed to simplify complex accounting tasks through a user-friendly interface.”

Daniel Hogan and Aaron Shaw, co-founders of Ember, said: “We created Ember to take the pain out of accounting for small businesses - to help people make faster, clearer financial decisions without the stress.

"Making Tax Digital has created a real call to action for SMEs and Ember provides the solution to this. Our deal with Starling Group will mean that we’re setting a new standard for how banking and accounting should work together — seamlessly integrated and refreshingly simple.”