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Startup bank Tandem blames Brexit vote for trouble raising money

Tandem CEO Ricky
Knox.
Tandem

Brexit referendum “considerably impacted control’s
talent to lift investment when deliberate”;

Fintech startup misplaced £20.four million because it spent closely
creating generation;

The contemporary takeover of loss-making Harrods Bank brings
£80 million investment, securing long term, CEO says.

LONDON — Startup bank Tandem says ultimate yr’s Brexit vote made it
“significantly” tougher to lift money.

Last June’s vote to depart the European Union “considerably
impacted control’s talent to lift investment when deliberate,”
Tandem says in its 2016 accounts, which have been filed with Companies
House this week.

Founded in 2015 by means of serial tech entrepreneur Ricky Knox and
Capital One cofounder Matt Cooper, Tandem is making an attempt to construct an
app-only bank pitched at millennials. The corporate has but to
release to the general public and has spent two years creating its
generation.

Tandem raised £28.2 million in fairness investment ultimate yr,
together with £1 million thru crowdfunding, and £1.2 million
in subordinated debt, accounts display.

However, intensive funding in tech and product construction
driven it to a £20.four million loss ultimate yr, up from a £6.four
million loss in 2015. Tandem had no source of revenue in 2016 and used to be left
with £7.three million of money within the bank on the finish.

Tandem idea it had
secured £35 million in December ultimate yr in a take care of
House of Fraser that may have funded the release of its app-only
bank account. But that deal
fell thru in March after the app-only bank had won simply
£6 million.

The investment setback led Tandem to lose its banking licence and
pressured it to lengthen and reduce release plans,
lay off group of workers, and search further investment. As Business
Insider prior to now reported,
the startup raised £three.6 million in April promoting stocks at a
bargain.

‘No additional money is wanted for the time being’

Tandem’s long term seems were secured by means of a share-for-share
takeover of the loss-making Harrods Bank, introduced in
August. Tandem won a £10 million money injection from
“existing and new investors” as a part of the deal and can get a
additional £70 million as soon as the deal is authorized by means of regulators.

However, auditors PwC position an “emphasis of matter” on Tandem’s
going fear foundation within the accounts, suggesting it’s involved
in regards to the corporate’s talent to live to tell the tale. PwC says Tandem’s want to
carry further investment “would possibly solid vital doubt on in regards to the
corporate’s talent to proceed as a going fear.”

Tandem CEO Ricky Knox informed Business Insider: “The Harrods Bank
acquisition brings £80m of latest capital into the blended Tandem
and Harrods Bank trade, because of this no additional money is wanted
for the time being.

“PwC is highlighting a chance solely within the case that the purchase
doesn’t shut for the reason that it’s nonetheless topic to regulatory
approval. Tandem stays absolutely assured that the deal will pass
forward.”

He added: “Tandem want to upload an investor or two that they
suppose can deliver strategic price to the trade, but when they
can’t in finding someone suitable then present traders will absolutely
fund the spherical.”

Tandem has raised as regards to £40 million from traders together with
eBay founder Pierre Omidyar, Direction66 Ventures, and crowdfunding
traders on Seedrs.

Despite its licensing setback, Tandem asserts in its accounts
that its “aim is to regain a deposit-taking licence and
succeed in its unique strategic goals.”

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