Startup bank Tandem smashes its £1 million crowdfunding target - but people are complaining about glitches

Startup app-only bank Tandem smashed through its £1 million ($1.46 million) crowdfunding target in around 15 minutes on Thursday, despite only opening it up to a closed group of pre-registered investors.

Tandem was set to fully launch its crowdfunding campaign on Friday but on Thursday at 12 p.m. BST, it opened it up to investors who had expressed interest by signing up to its email list ahead of time.

The company, which is valued at £65 million in the round, met with such demand that it raised its entire investment sum in around 10 minutes. A source close to the company, who did not want to be named, told Business Insider that Tandem hit 85% of its funding goal in around two minutes.

An hour after opening, just over £2.4 million of investment has been pledged by investors towards the bank. But a spokesperson for Tandem told BI that one investor had accidentally invested £1 million rather than £100,000. This error is being corrected by Seedrs, meaning the real total is likely to be closer to £1.5 million.

Tandem has signalled that it will sell more equity to meet investor demand tomorrow. It's not clear at the moment how much.

But the surge of demand also led to glitches on Seedrs, the crowdfunding platform that Tandem used for the funding raise. Several would-be investors tweeted their frustration at being unable to access the deal.

The incident is reminiscent of rival app-only bank Mondo, which initially crashed crowdfunding platform Crowdcube with demand from investors. It went on to raise £1 million in just 96 seconds.

Tandem says it is trying to build "a good bank," using data analytics to help make customers better off by recommending the best deals on things like mobile phone tariffs and gas bills. Earlier this year it gave away 5,000 single shares in the company in a bid to build a "cofounder community" that could help it design the bank.

Cofounder Ricky Knox told BI last month: "The point for us is we're not designed for finance geeks who already are on top of their finances. They've already got plenty of places they can go, they can hang out on MoneySupermarket.com.

"What you really want to know is 'am I going to run out of money this month and if I am, what can I do about it?' Let's face it, 90% of the UK runs out of money at the end of the month. That's the problem."

Tandem has yet to launch but plans to launch its products later this year. It was the second app-only bank to be licensed in the UK last year.