Digital bank Tandem has unveiled plans to float on the stock market within the next five years, as interest in fintech companies continues to swell. Tandem said an initial public offering would “make sense” and that there was “clearly potential for multiple unicorn valuations in the digital banking space, as evidenced by recent capital raises”.
Earlier in the day, the company’s product and marketing director Matthew Ford had told the Press Association that an initial public offering was “probably one [path] that aligns closest to our mission”. “We want to build this customer-centric business and then an IPO makes perfect sense, having the public buy into that business and it grow further,” he said.
A listing on the stock market is likely to happen within the next three to five years, although Mr Ford said “you kind of read the market as you go”. The comments come after a strong year of growth for Tandem, in which it officially launched its service and rolled out six new products, including a cash-back credit card and savings accounts.
At the end of 2018, Tandem had almost 500,000 customers, smashing the company’s earlier expectations of having around 150,000 customers by the end of the year. “We have grown incredibly quickly. I don’t think there’s any bank in the UK that has rolled out six financial products in a year. It’s been unbelievable if you think about it,” Mr Ford said.
Tandem is one of a growing number of online challenger banks, alongside Starling, Revolut and Monzo, which sprung up in the wake of the financial crisis. Even though those banks are increasingly drawing customers in with their apps offering more online tools to manage money, they say there is still plenty of room to grow.
In the UK, the six largest lenders hold around 87pc of current accounts, whereas in the US, the six largest banks control 54pc. Investor interest in financial technology companies has been booming over the past year, and Monzo recently achieved “unicorn” status, as its valuation hit more than $1bn. British peer-to-peer lender Funding Circle also became a “unicorn” when it floated on the London Stock Exchange last year.