The British fintech Tide has made the jump across the British Channel. The platform is now also offering its services to German customers. Interested parties can sign up to the waiting list on the website. CEO Oliver Prill is targeting business customers who do not have their own finance department. Tide is operating profitably in the UK.

„When Tide started in 2017, the share of so-called challenger banks – essentially fintechs – in business accounts in the UK was less than 1%,“ says Prill. His company estimates that market penetration is now 35% to 40%. „So there is an incredible amount of progress in the market. From our perspective, Germany is roughly where it was in the UK in 2018.“ Tide estimates the market share of all fintechs for business accounts in the German market at 3% to 5%. Is Germany ready now? „Basically, we see the following dynamic everywhere: people are not satisfied with their house bank, want to switch, but don't do it because the offer is undifferentiated.“

In the UK, Tide has a market share of 10%. „Tide is not a bank,“ says Prill. „We are a platform that covers everything to do with finance and administration.“ He explains the business model: „In the UK, I can write my invoices via Tide. I can invoice these invoices. Because the business account is with us, we know whether the money has been received. We automatically send reminders if it doesn't arrive. If it is received, we add it to the invoice with the customer's data and pass it all on to the accounting system. Put simply, we are the outsourced financial administration of a tradesman, restaurant or hairdressing business.“

The sub-products are provided by service providers through „headless integration“. In the UK, Tide works with Clearbank, which has a banking license and offers banking-as-a-service. The company itself has a Mastercard license and can issue its own cards. Prominent names such as Adyen and Edenred take care of card acceptance and processing. Sage is the basis for Tide Accounting. These service providers „represent the product in a deeper sense,“ says Prill. „But everything that is on the platform, how the product is configured, how it is displayed, how it interacts, that is what we do.“

Tide's investors include Apax Digital, Augmentum, SBI Group, Speedinvest and Tencent. „Because Tide is profitable in the UK, we have money for international expansion,“ says Prill. „In this respect, there is no need to raise further funds from the company's perspective.“ Unexpectedly good business in Germany is conceivable, so that Tide could „really step on the gas“ or make an acquisition. „Then we might approach investors again.“ Of course, investors could also sell their shares.

Sky News reported earlier this month on preparations for a secondary market transaction in which existing shares are to be sold. According to the report, the price corresponds to a premium of around 30% on the latest financing round. This brings a valuation of 1 billion dollars within reach.

Tide wants to start with the business account and the card in Germany. All other products are set to go live in the coming months and quarters. „Achieving a 10% market share in Germany would be very ambitious,“ says Prill. „Our goal is to establish ourselves well in Germany and become profitable there too. That won't be as difficult as in the UK because we can also use many of the investments we have made in the platform in Germany.“

In the UK, Tide also arranges loans for its business customers. „A year and a half ago, we bought Funding Options, the largest loan broker in the UK,“ says Prill. The company works with 120 lenders, from major banks to specialist lenders. „We have all the customer data and can help our customers find the right lender.“

Crypto, on the other hand, is not an issue for him: „So far, there is no crypto use case in the business customer segment that we recognize as legitimate.“

Small businesses are often very busy with their core business. Borrowing often fails because the finances are not properly prepared. „That's what we do,“ says Prill. „The customer does all their finances with us. So we can provide them with a complete package. Of course, we only do that if he agrees to it. We won't offer it to them speculatively.“ Tide has 35 different loan products in the UK, from commercial real estate financing to export financing. „What is important for borrowers and lenders is that we pre-select who is relevant for whom.“

„You don't need to approach a major bank with a high-risk customer. That's a lot of effort for both sides, a lot of frustration, and will lead to rejection.“ The offer will ultimately also come to Germany. „From our point of view, this is the right approach in the corporate credit segment,“ says Prill.

„In the segment in which we operate, there is roughly a third that wants credit and is also creditworthy,“ explains the Tide CEO. „Then there is a third that is not actually creditworthy and should not be given credit because otherwise you would drive them to ruin. We are very careful here.“ We help this third to become creditworthy. „And then there are a lot of entrepreneurs who have a lot of money,“ says Prill. „A third are doing very well financially and have billions in deposits with us, which we manage.“ These are law firms, small tax consulting firms, or small IT service providers.

There is no need to worry about data being leaked to third countries. „The software runs in London for the UK, in Mumbai for India and in Frankfurt for Germany,“ says Prill. „The data is separate, it's local. But the platform is basically the same as far as the software code is concerned.“