Digital challenger bank Tandem has agreed to acquire Harrods Bank, the banking division owned by the London-based luxury department store, in a ‘multi-million pound’ deal.
The FinTech firm, which has so far raised $77.8m (£60m) since bursting on the scene four years ago says it will operate the whole business under its brand once the deal is finalised.
Tandem said in a statement that the acquisition would help it “grow faster than ever”.
“We’ve agreed a deal to acquire 100% of Harrods Bank, subject to regulatory approval, which brings around £80m of capital into the business … We can accelerate our launch plans and start offering saving accounts soon. We will continue developing and rolling out our app and credit card as planned, with a little more spring in our step,” reads the company-issued statement.
Ricky Knox, Tandem’s founder, added: “Tandem has been built from the ground-up with the help of over 11,000 co-founders, who have helped us shape products and services that really make a difference to their lives. This acquisition will allow us to scale the business and ensure we can introduce as many people as possible to a new way of banking.”
The news comes after the challenger bank lost out on a £29m investment after existing backer House of Fraser decided to pull out of a proposed deal, meaning that Tandem missed the deadline for the submission of its banking license application.
Bought by Chinese company Sanpower for £480m, House of Fraser said at the time that the decision was based on limitations being placed on Chinese firms investing money abroad amid stalling growth at home.
Tandem, which is competing against other challenger banks such as Atom, Tide, Monzo, Revolut and Starling Bank, reportedly made 10 redundancies in an attempt to lower its cash burn rate earlier this year.