Fintech start-up Tide is to raise £60 million from investors after winning a multimillion-pound grant last month aimed at breaking the oligopoly of the big high street banks.
Tide, along with is partner ClearBank, won £60 million from the Royal Bank of Scotland’s (RBS) competition remedies fund and is aiming to match this with a cash injection from new and existing investors.
The company said that in addition to its current backers, which include Anthemis, Augmentum, Creandum, Goodwater, LocalGlobe, Passion Capital and SpeedInvest, it has received interest from 70 venture capital funds.
Tide provides bank accounts and services to small and medium sized enterprises (SMEs) and said it will use the funds raised from the grant to help it grow. It is aiming to capture at least 8% of the SME market by 2023.
The company, which operates solely via its app, currently has around 70,000 customers which equates to about 1.2% of the market.
Oliver Prill, Tide’s chief executive, said: “This new investment plan will help Tide accelerate its strategy to capture a significant share of the SME banking market. It will allow us to reach our goal of becoming the leading business banking challenger in the UK.
“We want to create a genuine scale challenger to the oligopoly that has dominated and failed SMEs for too long. SMEs should have the option of a dedicated and focused banking partner that will help them grow their business.”
Tide, which does not have a banking licence, applied for one of the larger pots of the fund with ClearBank, the first clearing bank to launch in Britain for 250 years which does have a licence.
The fund is part of conditions attached to RBS’s £45 billion bailout a decade ago at the height of the financial crisis. It is aimed at boosting competition in the banking sector which is dominated by the big lenders and helping smaller firms develop their services to SMEs.
Metro Bank won the lion’s share of the fund with £120 million and digital-only challenger bank Starling was awarded £100 million.