UPDATED 15:13 EDT / JULY 12 2021

APPS

Fintech startup Tide reels in $100M for its business banking platform

U.K.-based financial technology startup Tide Platform Ltd. today announced that it has raised $100 million to broaden the adoption of its namesake business banking service, which helps small and midsized companies manage their finances.

The round gives the startup a $468 million valuation. Private equity firm Apax Partners was the lead investor.

Tide enables small and midsized companies to open a business bank account they can manage via a mobile app or a web console. Alongside standard features such as the ability to transfer funds to other accounts, Tide provides an array of tools aimed at making it easier to manage a business’ day-to-day expenses.

Through Tide’s interface, companies can issue corporate payment cards to let their employees easily pay for work-related expenses. For larger purchases, there’s an invoice payment tool that a firm can use to pay suppliers. Companies can also schedule recurring payments, for example if they buy a subscription to a software product, and a receipt upload tool makes it possible to sync cash-based purchases to the expense log as well. 

Tide can be configured to organize each new expense by category automatically. According to the startup, this feature reduces the amount of manual work required to organize a company’s transactions and thereby speeds up bookkeeping. In the same spirit, Tide provides integrations with accounting platforms such as QuickBooks that it says streamlines the task of syncing transactions from a company’s account.

Besides established companies, Tide also targets individual entrepreneurs as part of its go-to-market strategy. The startup offers a business incorporation service that promises to reduce administrative work for users. According to Tide, the service allows entrepreneurs to submit the necessary paperwork in a few minutes and pays the business incorporation fee on their behalf. 

The startup claims that more than 350,000 customers have used its platform so far to open about 400,000 business accounts. The startup plans to continue growing its user base using the new $100 million funding round it announced this morning. “Partnering with Apax Digital validates Tide’s potential to continue our growth trajectory and gain traction in global markets,” Tide Chief Executive Officer Oliver Prill said in a statement.

Tide is the latest in a series of digital banking providers that have raised capital recently. Denmark-based Lunar AS this morning announced that it has raised the equivalent of 210 million euros, or about $249 million, from investors. Novo Platform Inc. closed a $40.7 million investment last month.

Limited financial data shared by a few of the digital banking segment’s largest players suggests that the market is growing rapidly. As a result, more emerging startups can likely be expected to announce funding rounds in the coming quarters, while established market players might seek to raise additional capital to strengthen their competitive positions.

Venture capital firms’ interest in the market mirrors the broader investor enthusiasm about the growth prospects of fintech. The fintech market has produced some of the tech industry’s most valuable startups, such as payment processing provider Stripe Inc., which achieved a mammoth $95 billion valuation in May after closing a $500 million funding round. 

Image: Tide

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