Banking startup Tide raised $14 million in one of the largest Series A funding rounds closed by a fintech company this year.
Tide, a digital-only banking app aimed at small businesses, has also partnered with online lender iwoca, in a move to allow small companies access to loans of up to £100,000.
The funding round was led by specialist fintech investor Anthemis, along with Passion Capital, LocalGlobe and Creandum, the company that backed Spotify.
Tide plans to almost double its London team by the end of the year, and develop more features to make online banking for small and medium sized businesses (SMEs) more efficient.
Some of these features, says Founder and CEO George Bevis, will include things that people “have not seen before.”
“Our investors believe there is a real opportunity to support and champion small and medium-sized companies in the wake of Brexit,” says Bevis. “Britain’s smaller firms have been let down by traditional banks, which often charge vulnerable companies eye-watering fees and keep them waiting weeks to open a business account.”
Tide launched last year shortly after securing £1.5 million in investments – an unusually high sum for a company yet to launch – having worked on the product in secret for over a year.
Customers can open a Tide account in minutes, using only their passport or driving license. Intelligent features aim to automate routine administrative tasks – the app can read invoices that are uploaded, and work out who and how much to pay – and accounts can be multi-user and as well multi-currency. Users can also integrate Tide with other fintech services, like currency exchanges.
Ultimately, says Bevis, Tide aims to “give small businesses back their time.”
Unlike other banking startups like Monzo, Tide does not have a full banking licence – nor does it plan to get one. Instead, the money is held by Barclays with Tide handling the transactions.
“Having a full license would be bad for our members,” says Bevis. Not having a full license, he says, means “we can’t take risks with our members’ money,” which provides a level of comfort to members that they might not otherwise have.
A full license would also cause a “management distraction,” says Bevis, since Tide would need to hire many more people to carry out all the additional tasks traditional banks perform. Without this, he says, Tide is free to focus on the development of unique tools and features.
The partnership with iwoca is also new. The lender aims to grant loans to SMEs that aren’t eligible for traditional bank loans, in a matter of minutes.
“Credit is fuel for growth for small businesses,” says Bevis. But, he says, SMEs have historically had to go through lengthy and often unsuccessful applications for loans, at banks that don’t understand their business models.
“Access to financial services on demand has become a basic expectation of businesses, which until now has been unrealistic. With Tide, that has changed,” says Tide’s chair and joint investor Passion Capital’s co-founder Eileen Burbidge.
Tide is free to download and costs 20p per bank charge and £1 per ATM withdrawal.