LONDON — App-only startup bank Tandem recently made around 10 staff redundant in a bid to bring down its cash burn rate, according to two sources.
The redundancies follow a £35 million cash injection from House of Fraser in December.
According to the two sources that spoke to Business Insider, House of Fraser wanted Tandem to lower its overheads. House of Fraser declined to comment.
The startup bank, which is pre-revenue, had around 120 staff prior to the redundancies.
Tandem made a loss of £6.4 million in 2015, the most recent year accounts are available for. The company had an average of 26 employees in that year and spent £2.6 million on personnel expenses according to filings with Companies House, including salaries, social security contributions, and employee share schemes.
CEO Peter Herbert recently left the business, to be replaced by founder Ricky Knox. The company said at the time that he was retiring and reiterated this when asked by Business Insider on Monday if Herbert’s departure was related to the redundancies.
A spokesperson for Tandem declined to talk about the specifics of the House of Fraser investment but told BI:
“As we announced in February, Ricky Knox is our new CEO, subject to regulatory approval. This is following the retirement of Peter Herbert. We wish Peter well and again thank him for his guidance and knowledge since we received its banking licence in 2015.
“As we continue to drive towards a public launch this year, a strategic review of the business led to the absorption of a small number of roles.”
Tandem was founded in 2013 by serial tech entrepreneur Ricky Knox and Capital One cofounder Matt Cooper. The startup gained its banking licence in late 2015 and has raised over £50 million from investors including eBay founder Pierre Omidyar.
Tandem is one of a number of so-called “neobanks” that have sprung up across Europe over the last two years — apps that offer banking or bank-like services. Others in Britain include Monzo, Starling, and Atom.
Tandem has yet to fully launch to the public. It plans to launch credit and debit products later this year, which will include tools to help people switch tariffs and service providers within the app to the best rate for them.
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