Tide buoyant after fundraising success
Start-up mobile-only bank Tide, which operates for SME customers, has doubled its number of users following an £8 million round of fundraising.
The number of account holders using Tide amounts to 56,000 at this point, around 1% of all SME bank accounts in the UK. Tide was founded in 2016, and now has a team of around 80 working at its London office.
In December they reported that around one-tenth of all new business current accounts being opened were with Tide, and say one SME signs up every eight minutes.
It hit a difficult patch early in 2018, when its founder, George Bevis, stepped down as chief executive, though he remained as majority shareholder. His eventual replacement, Oliver Prill, started in August.
That same month, Tide campaigned for top-up investment and achieved £8 million - with Augmentum, Europe-wide Fintech backers, joining the ranks of venture capital firms behind the bank.
Prill said, “We were always for SMEs. All the other fintechs have a very rich agenda with a limited number of resources. You can spread yourself quite thinly. Here everyone is completely focused.”
Challengers within the highly competitive industry include Monzo and Revolut, both of which are now worth more than £1 billion. They have acquired millions of consumer users, and only recently Monzo raised one of the largest crowdfunding sums ever, achieving £20 million.
Tide’s team have placed their confidence in a smaller number of higher-value users who rely on the ease-of-use of the app and banking service. It takes less than five minutes to set up a Tide account, doesn’t charge any periodical or card usage fees, and offers administrative and invoicing tools for users.
While the big names may have made it to “millions” of accounts, says Prill, “the average balance or transaction volume is actually quite limited.”