House of Fraser to invest £35m in challenger bank app Tandem

3 Jan 2017

The move by House of Fraser could see the department store become a trailblazer for a new wave of neobanking services championed by retailers. Image: Lukasz Pajor/Shutterstock

UK department store giant House of Fraser is to invest £35m in fintech player Tandem, an app-only challenger bank.

The move will enable House of Fraser to offer online banking services to shoppers.

The retail chain sees it as a way of differentiating the kinds of services it offers customers.

Tandem, which received its UK banking licence a year ago, has raised over $30m from investors, including eBay co-founder Pierre Omidyar.

Founded in 2014, Tandem raised £1m last year in a crowdfunding campaign, valuing it at £65m.

House of Fraser spearheads the fintech future of shopping

“House of Fraser is one of the great loved retail giants, with a customer-centric heritage that aligns closely with Tandem’s mission and values,” said Ricky Knox, founder and deputy CEO of Tandem.

“We’re excited about the opportunity to help their loyal customers with their financial lives.”

Tandem competes with other newly minted neobanks, including Monzo, Starling and Atom.

House of Fraser was acquired by Chinese conglomerate Sanpower in a £480m deal in 2014.

While the company already offers credit and loyalty cards through NewDay, the ability to offer app-only online banking services is a departure that could see other UK retail multiples follow suit.

The Christmas lights decorations outside House Of Fraser on Oxford Street. Image: Lukasz Pajor/Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years