Tide Joins the Unicorn Club: A Deep Dive into the U.K.-Based Fintech’s Journey

U.K.-based fintech Tide has recently made headlines by securing a substantial $120 million in funding, propelling the startup into the coveted unicorn club with a valuation of $1.5 billion. This funding round, led by TPG through its impact investment vehicle, The Rise Fund, marks a significant milestone for Tide, which now serves over 1.6 million micro and small enterprises globally. Notably, more than half of these businesses are located in India, the company’s largest and fastest-growing market.

Funding Details and Valuation

The latest funding round comprises a mix of primary and secondary investments, although Tide has opted not to disclose the exact breakdown. Alongside TPG, existing investor Apax Digital Funds also participated in this round, which included share sales from employees, early angel investors, and a few minority stakeholders. This influx of capital is expected to bolster Tide’s growth trajectory and enhance its service offerings.

Addressing the Needs of Micro and Small Enterprises

Micro and small enterprises, including freelancers, contractors, and solopreneurs, often find themselves bogged down by business management tasks such as accounting, invoicing, and securing loans. While traditional banks and other fintech solutions exist, many are not tailored to meet the unique needs of these businesses. Tide aims to fill this gap with a unified business platform that offers a suite of tools designed specifically for small enterprises. These include:

• Accounting integrations
• Invoicing
• Business loans
• Asset finance
• Payroll services
• Expense cards
• Company registration

By providing these tailored solutions, Tide seeks to streamline operations for its members, allowing them to focus on what truly matters: growing their businesses.

Expansion into India

Initially launched in the U.K. in 2017, Tide expanded into India in December 2022, recognizing the vast potential within the country’s small business landscape. According to recent government data, India is home to around 60 million micro and small enterprises, employing over 250 million people. Since its entry, Tide has successfully onboarded over 800,000 Indian businesses, surpassing its U.K. member base, which stands at nearly 800,000. In the U.K., Tide already serves about 14% of the small and medium business market and is profitable.

The Challenge of Cash

Oliver Prill, CEO of Tide, emphasizes that the biggest challenge facing the company is not competition but rather the prevalence of cash transactions. He notes, “There is a huge trend to formalization,” indicating that many businesses still operate outside the formal financial system. This presents an opportunity for Tide to encourage businesses to transition to digital solutions.

Growth Potential in India

Despite a slight slowdown in growth rates, India remains a promising market for Tide. The startup estimates that around 4 million micro and small businesses are launched in India each year. These businesses often seek assistance with accessing formal credit, accepting payments via the Indian government-backed Unified Payments Interface (UPI), and navigating the Goods and Services Tax system. Tide’s digital platform, available on both iOS and Android, aims to address these needs effectively.

Targeting Tier-3 Cities

Tide is particularly focused on expanding its reach in tier-3 cities—smaller towns with limited digital and financial infrastructure. Gurjodhpal Singh, CEO of Tide India, has noted strong demand from these areas, with the company aiming to onboard 1 million businesses in India by the end of the year.

Collaborations and Services

In India, Tide collaborates with around 25 lenders to facilitate credit for small businesses, tailoring recommendations based on individual business needs. The platform also offers a variety of services, including:

• Fixed deposits
• Bill payments
• Bank transfers
• Cash withdrawals through ATMs

Geographic Expansion and Future Plans

Beyond the U.K. and India, Tide has also launched operations in Germany in May 2024 and expanded into France earlier this month. The startup is committed to providing a tailored experience in each market, including local language support.

With the recent funding, Tide plans to further expand geographically, enhance its product offerings, and invest in agentic AI. While the startup already covers a wide range of finance and administrative services, there are still gaps to fill. Prill hints at “major developments” in the coming months, driven by the latest funding round.

Workforce and Global Operations

Currently, Tide employs over 2,500 people across its global operations, reflecting its rapid growth and commitment to serving micro and small enterprises effectively. The company’s focus on innovation and customer-centric solutions positions it well for continued success in the competitive fintech landscape.