Starling Bank has acquired Fleet Mortgages for £50m in cash plus a share deal.

The move will see Starling act as the only funder for the buy-to-let deals Fleet specialises in.

Starling’s latest trading update, published on 22 July this year, reports the bank having £5.8bn in deposits across 2.1m accounts – the former figure having grown by 500% on an annual basis.

Fleet will continue to operate under its own brand and the current management team remaining in place.

In mid-April, Starling raised £50m in funding from US banking giant Goldman Sachs.

Starling chief executive Anne Boden wrote in a letter in July that the firm is eyeing an initial public offering, “When it is right for our business, not just because it is fashionable to fit in with the pack.”

Fleet chief executive Bob Young says: “It is certainly exciting times ahead for everyone associated with Fleet and, with new, ambitious shareholders on board, it allows us to potentially move into new product sectors and further grow our market share. This acquisition opens up a range of opportunities that otherwise wouldn’t be available to us.

“Starling Bank will take over all of our funding, allowing us to focus on achieving our significant and ambitious lending and growth targets. This is a natural progression for our lending business, with both Starling and Fleet sharing a very similar cultural fit and provides us with a very strong lending base from which to work from and to deliver for our staff, our adviser partners and our landlord customers.”

And Boden comments: “The acquisition of Fleet Mortgages is the start of our move into mortgages as an asset class and builds on a number of forward-flow arrangements that we’re doing with leading non-bank lenders.

“Fleet’s existing management team will remain in place and Fleet will continue to operate as a stand-alone company, keeping the original name and brand.

“We’re buying Fleet because it is very good at what it does, not because we want to change it.”

There have been a number of acquisitions in the mortgage sector recently. On 15 July, Athene agreed to buy Foundation Home Loans and Better announced the acquisition of Trussle.