Digital business bank Tide says it has received expressions of interest from 70 VCs worldwide over plans to raise funds matching the £60 million grant recently awarded to clearing bank partner ClearBank by the Banking Competition Remedies Board.
The handouts from the Capability and Innovation Fund Pool A are designed to promote competition in the market for banking services to SMEs in the United Kingdom.
Metro Bank was granted the largest slice of the pie at £120 million, followed by Starling at £100 million. ClearBank, which is collaborating with SME banking startup Tide, walked away with £60 million.
Tide says the total £120 million war chest will enable it to meet its goal of capturing an eight percent market share by 2023. The challenger currently claims nearly 70,000 customers, equating to a 1.2% share of the UK's 5.7 million SMEs.
To secure the additional £60 million funding, Tide is planning Series B and C investment rounds in the next two years.
The funding will be focused on driving awareness of the Tide brand, overcoming switching friction, and creating new products and services such as payroll tools, expense cards and multi-business banking.
Oliver Prill, CEO of Tide, says: “We want to create a genuine scale challenger to the oligopoly that has dominated and failed SMEs for too long. SMEs should have the option of a dedicated and focused banking partner that will help them grow their business. With a clear plan for growth in the UK backed by significant investment, and our platform established and proven, we are ready for an exciting future.”
Separately, Starling bank has revealed plans to open a new office in Southampton, where it plans recruit up to 50 software engineers and up to 100 customer service team members as part of its move into the business banking market.
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