House of Fraser has put the brakes on a multi-million pound investment in UK digital-only challenger Tandem Bank. It had been due to stump up £29 million to bolster the new entrant’s capital requirements for launching as a full bank, but Sanpower, the Chinese conglomerate which owns House of Fraser, has pulled back, concerned about the increasing limitations placed on Chinese firms investing money abroad.
As a result, Tandem has decided to pause plans to offer savings accounts to customers. “This will not delay our launch to the market, with the app – which will allow customers to view all their money in one place and optimise their finances – still launching to the public in the coming months followed by credit cards later this year, subject to regulatory approval,” it says. “We will add saving accounts and current accounts back into the range of services we provide as soon as we feel the time is right for our customers and our business.”
A fresh deal has not been ruled out. House of Fraser remains a minority shareholder after putting £6 million into the startup at the end of last year, whilst a plan to roll-out financial services products to its customer base “remains a priority for both House of Fraser and ourselves.”
Tandem’s funding stands at £39 million to date from the likes of Omidyar Network, eBay founder Pierre Omidyar’s venture capital firm, and Route 66 Ventures. It has also raised £1 million via crowdfunding.