LONDON — Investors in startup bank Tandem stepped in to provide
an emergency cash injection for the startup earlier this year
when a funding deal collapsed.
Tandem’s investors put £3.6 million into the company in April,
documents filed with Companies House on Friday show. The
after a £35 million investment from House of Fraser
fell through at the end of March after only £6 million had
Investors who put money in received a big discount on Tandem’s
share price. Tandem, which has not yet launched to the public,
sold shares to House of Fraser at £15.20 in December but
investors who stepped in to help in April bought shares for £5.56
— almost a third of December’s price.
A spokesperson for Tandem told Business Insider:
“The share filing that has just been undertaken relates to an
investment that existing investors made in Tandem immediately
after the funding from House of Fraser was cancelled due to
uncertainty about whether China’s State Administration of Foreign
Exchange would approve the transaction.
“The investment was made at short notice at a time when Tandem
had a less certain future than it had previously. The fact that
existing investors continued to support the business demonstrates
their faith in its potential, but Tandem decided that it was
appropriate to offer a discounted price given the circumstances.”
The spokesperson wouldn’t give details on which specific
investors backed Tandem in the fundraising. Tandem has
raised over £25 million to date from investors including eBay
founder Pierre Omidyar, Route 66 Ventures, and e.ventures.
The banking startup also
raised £1 million through crowdfunding
on Seedrs last year.
The funding setback led Tandem to lose its banking license as it
no longer met capital requirements. The startup, founded in 2014,
reduced total staffing numbers from around 120 to 80.
Tandem announced earlier this week that it is buying
loss-making Harrods Bank, a deal that will see Harrods’
Qatari owners inject £80 million of new capital. Tandem said in a
blog post announcing the deal that the transaction means its
“future is secured.”
Tandem’s funding setback and licensing issue have delayed the
launch of its savings account, but Tandem said this week that the
deal should help accelerate the launch, allowing it to happen by
the end of the year.
Last month Tandem launched its app to its community of
“co-founders.” It allows people to view all their bank accounts
in one place and monitor spending. Tandem is also testing its
credit cards internally, with plans to launch to the public later
Tandem, founded in 2014, is one of a number of app-only banks set
up in Britain in recent years. Others include Monzo, Atom, and