There's a new digital-only bank and its CEO says Brexit is the 'perfect scenario' to launch
Tide is launching to the public today after bagging the funding in the last few weeks. It is an unusually large funding round for a startup that has yet to launch its product.
The startup's investor list reads like a who's who list of London tech. Backers include: LocalGlobe, the VC firm set up by renowned London investors father and son Robin and Saul Klein; well-known early stage fund Passion Capital, where TechCity UK chair and government advisor Eileen Burbidge is a partner; Zoopla founder Alex Chesterman; LoveFilm cofounder William Reeve; Greg Marsh, founder from One Fine Stay; Songkick's cofounder Ian Hogarth; serial fintech investor and Wonga founder Errol Damelin; and Jason Goodman, founder of digital agency Albion.
Tide founder George Bevis says that although he supported the Remain campaign: "Brexit is a perfect scenario for us to launch. There's no question that at a time of insecurity, cost effective financial services for entrepreneurs are going to be more valuable at a time when entrepreneurs were experiencing a greater degree of comfort.
"It's an old cliche but the best startups launch in situations of adversity and we think that'll be true for us."
Tide is an app-focused bank pitched at small businesses, aiming to take the pain out of running the finances at a startup. There's no single killer feature but the startup tries to eliminate all the minor hassles that add up to a major headache for a business owner.
Founder and CEO George Bevis told BI: "What you end up with is an environment where people may well sign up for it thinking this is slightly a better current account but they're not going to feel like that after using it for a while because it ends up being a completely new experience of doing all the dull financial services things that you hate. You just get it done in seconds."
Passion Capital partner Eileen Burbidge, who is an investor and also chairs Tide, told BI: "What we see at Passion having invested in 50-plus businesses over the past few years is that the single biggest pain point is setting up your business banking account and getting reliable and efficient services."
As an example of what Tide can do, Bevis says: "If you've got a new business you can open an account with us in 3 minutes on our app. Normally it takes weeks and weeks and weeks with a traditional bank."
Other features include APIs that let you build Tide's services into your own apps, integration with other fintech businesses for things like credit, foreign exchange, and card payments, and the ability to set payment limits for team members on the app.
It's free for businesses to sign up to Tide and the company only charges a 20p fee for every payment that is processed through the account. Bevis says Tide plans to make most of its money by selling on third-party products to customers through the app.
He says: "We are currently in deep partnership discussions with a range of companies across access to credit, forex, taking card payments etc. etc."
The $2 million Tide has raised will go on building out the product and marketing, Bevis says.
Bevis has been working on Tide since early 2015. Prior to starting the business, he worked at peer-to-peer lender Zopa and Barclaycard, getting a taste for both traditional finance and the world of fintech startups.
Tide is one of a number of app-only banks being set up around Europe at the moment. Others include Mondo, Starling, and Atom in the UK, and Number26 in Germany.
Unlike all of the above, Tide is not an actual bank but in fact a layer that sits on top of a traditional bank. Customers of Tide will actually be dealing with FCA-licensed Prepaid Solutions, which holds the funds in a Barclays account. But it's Tide that acts as the translator, enabling a quick and easy transaction where you'd normally find a thorny, time-wasting problem. At least that's the idea.
Bevis says Tide has no plans to go for a banking licence itself, preferring a lean mean model: "We are lucky to be able to take quite substantial revenues without needing to manufacture and of the core banking products."