Tandem announced that Fraser Financial Services Limited is cancelling the second tranche of investment "due to uncertainty about whether China’s State Administration of Foreign Exchange would approve the transaction." Sanpower is reportedly concerned about the Chinese government restricting outbound investment.
Beijing signalled plans to curb Chinese firms’ investment in foreign assets shortly after the Tandem deal was announced in December. Chinese companies invested GBP 130 billion abroad last year but domestic economic growth is slowing, prompting the government to encourage more inward investment.
The financial service arm of department store House of Fraser has already invested GBP 6 million in Tandem but it will leave the startup bank with a funding shortfall of GBP 29 million. It means Tandem will miss the deadline for some requirements of its banking licence and have to reapply, reports City AM
As a result, Tandem is delaying the launch of its savings product, which was expected imminently. The startup bank will shortly release an app to help people manage their money and credit cards are still expected later this year.
More than that, Tandem is looking for new investors after the pulling of the House of Fraser funding, which reportedly happened over the weekend. Tandem has raised GBP 39 million to date from investors including eBay founder Pierre Omidyar.
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