Sanpower Pulls Investment In Digital Challenger Bank Tandem


The Chinese conglomerate which owns House of Fraser, Sanpower, has been forced to pull back on a multimillion pound investment in Tandem, a digital challenger bank.

A £29 million tranche of cash that was set to bolster the capital requirements of the startup for launching as a full bank has been stalled over some concerns that Chinese authorities are imposing restrictions over outbound investments.

Ricky Knox, the founder and incoming chief executive of the company, said that the startup will still continue with its plans for launching the Tandem app with more features. However, he expressed his disappointment since the hopes of launching the firm as a full bank had been dashed.

The app is set to launch without a planned savings product which will require some capital to hold deposits. However, Knox said that there would be no other effect on what customers will be getting from the app. Any early users who will be testing the savings product will have their deposits returned.

The bank is now set to miss a deadline for fulfilling some of the requirements of its banking license that is authorised by the Prudential Regulation Authority. However, Knox said that the startup will reapply in due course. He also said that he anticipated that the process to be expedited when it does. The activities of Tandem will still be regulated under the Financial Conduct Authority at launch.

The startup will fall back on the existing investors for some of the cash, however, it is open to looking for new investors in order to make up for the shortfall from the nixed deal. It is understood that a new deal with Sanpower in future has not been ruled out. Also, a partnership with House of Fraser that will offer Tandem services to its shoppers is expected to continue.

House of Fraser continues to be a minority shareholder after investing £6 million into the startup at the end of 2017.

To date, funding for the startup stands at £39 million from top names including Route 66 Ventures, eBay founder Pierre Omidyar’s venture capital firm, and Omidyar Network. It also raised £1 million through crowdfunding.

Tandem recently announced the retirement of Peter Herbert, its chief executive. It is expected to launch in the coming months and will close to co-founders on the 12th May in preparation. Co-founders are now around 10,000 are the early users who were part of a beta testing and contributed to its development. They will also get an early access to the app, as well as new products and features.