Start-up bank Tandem is raising $1.4M by crowdfunding
By Arjun Kharpal for CNBC
British “challenger” bank Tandem is to kick off a £1 million ($1.46 million) crowdfunding drive in a bid to get more people involved in the start-up’s upcoming launch and attract customers.
The British start-up lender received its banking license at the end of 2015 and is set to launch later this year. It is part of the wave on online-only banks attempting to challenge the giants of the industry.
Tandem has previously raised “tens of millions of pounds”, according to founder Ricky Knox, but has never disclosed the actual figure. Pierre Omidyar, the founder of auction site eBay is among the investors. The crowdfunding round is part of the company’s “co-founders” program, allowing people to own shares in the bank.
Earlier this month, Tandem handed out free shares to people, worth about 5 percent of the business, in return for them offering advice and product feedback.
While the latest round is not a large sum of money, the main aim is to get people involved in the bank’s launch and hopefully turn them into customers.
“Part of ‘co-founders’ is building a group of advocates. This is a group of people who have been involved. One of the things about the new generation growing up is that people want to come along and participate,” Ricky Knox, founder of Tandem, told CNBC in a phone interview.
“We get them involved and we hope they will be customers and they will bring all their mates too.”
Knox said the company now has 5,000 co-founders that participate in different parts of development from coming to the office and doing events to offering feedback.
‘Save dollars’
Tandem is pitting itself against established banks as well as rival start-ups including Atom, which received a £45 million investment from Spain’s BBVA last year. Mondo, another competitor, did its own £1 million crowdfunding round earlier this year in which it reached its target in 96 seconds, highlighting the appetite for these new lenders.
Knox said that the crowdfunding page will be on Tandem’s website and will begin sometime in mid-May. As of yet, the company has not unveiled its app or given a specific launch date.
The aim of Tandem, according to Knox, is not to be a “massive price disruptor” but to “help customers with their finances, help improve relationship with money, make them better off and save them dollars”.
Knox said that Tandem will be a “full service retail bank” with a range of products from current accounts to mortgages which will roll out at different stages.
“We will be looking at how we can find solutions to things in your life you find irritating, such as being ripped off when going abroad and using credit card,” Knox told CNBC.
“The key is more around the piece that stitches that together, a robo adviser for your finances, the intelligence that sits in the middle and looking at how to do stuff better and do it for you. We are building an app that will intelligently making you better off.”
‘New champions’
Many financial technology or fintech start-ups have begun to partner with larger institutions. Atom for example took funding from BBVA, while the Spanish bank also acquired Finnish challenger Holvi. But that’s not something Knox sees for Tandem.
“You won’t find me cuddling up to the major high street banks.
“You’ve got the bank lobbing money through their accelerators. If you are a little fintech startup it is awesome to get a bank to give you 200 grand. Those guys won’t attack the hand that feeds them. The banks aren’t’ all going to die, the big ones will survive, there will be new champions that will thrive.”
First appeared at CNBC
