Digital challenger bank duo Tide and ClearBank have announced plans to co-invest at least £120 million in the UK over the next five years, with the aim of increasing business banking market share.

Tide is planning Series B and C investment rounds in the next two years to raise £60 million, stating that it has received expressions of investment interest from around 70 venture capital firms across the globe.

This funding will match the £60 million grant awarded to ClearBank by Banking Competition Remedies as part of the RBS Alternative Remedies Package. The two challenger banks had previously partnered to bid for the money.

The total £120 million investment will allow Tide and ClearBank to target a market share of at least eight per cent by 2023, according to the plan.

The funding will be focused on driving awareness of the brand and overcoming switching friction. Tide also stated it will launch new payroll tools, expense cards and multi-business banking.

Tide has around nearly 70,000 members, which equates to a 1.2 per cent share of the business banking market, which totals 5.7 million UK small and medium-sized businesses, according to the Department of Business Innovation and Skills.

Oliver Prill, chief executive of Tide, said: “We want to create a genuine scale challenger to the oligopoly that has dominated and failed SMEs for too long.

“With a clear plan for growth in the UK backed by significant investment, and our platform established and proven, we are ready for an exciting future.”

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