Tandem, a British startup challenger bank, is set to launch a crowdfunding campaign with the hope of raising $1.44 million (£1 million). The British lender aims to involve as many people as possible, and hopefully convert them into true digitally-banking customers.
The startup was granted its banking license last year by the Bank of England. It has joined other digital challenger banks that are going head-to-head with the mammoth bank establishments of the industry.
Ricky Knox, founder of Tandem, said that the startup had previously raised an undisclosed amount of money (tens of millions of pounds). One of the investors is the founder of eBay, Pierre Omidyar. The crowdfunding round is a program of the company’s co-founders who want people to own shares in the bank.
In early April, the bank issued free shares worth around 5% of the business. The shares were exchanged for product feedback and strategy advice.
According to Knox, the firm now has a total of 5,000 co-founders who are committed to building a group of stable financial backers.
Tandem is competing against established banks, as well as other bank challenger startups such as Atom Bank and Mondo. Atom received equity investment of $64.8 million (£45 million) last year from BBVA – Spain’s biggest financial institution. Also, earlier this year, Mondo closed a $1.44M (£1 million) equity crowdfunding campaign in 96 seconds, a record time.
Tandem’s campaign is set to launch in mid-May, and the crowdfunding page has been put up on the company website.
Knox said that the aim of Tandem is not to disrupt prices, but to assist customers with their money and help improve their financial status. Tandem will provide any and all services offered by traditional retail banks, which includes current accounts and mortgages.
Even though some fintech startups have started partnering with bigger institutions, Knox said that this is something he won’t do for Tandem. All lenders, whether big or small, must be prepared for the competition. He added that all major high street banks are inclined to survive, but the new digital mobile-only banks are the champions who will thrive.