Funding Options Acquisition: Key Details, Impact, and What Comes Next

Tide's acquisition of Funding Options marks a significant move in the fintech industry. By integrating Funding Options' extensive lender network, Tide aims to enhance credit access for its 475,000 members. This strategic acquisition not only strengthens Tide's market position but also promises to simplify the financing process for small businesses, addressing a critical industry challenge.

What Is Funding Options?

Founded in 2011, Funding Options is a leading UK marketplace for business finance. It offers a variety of financial products, including business loans, asset finance, and invoice finance. Unique in the market, Funding Options connects businesses with over 120 lenders without impacting their credit scores. The platform also features the "Funding Cloud," which uses advanced technology to streamline the funding process. Additionally, it emphasizes sustainability through its green finance initiative.

Who Acquired Funding Options?

Tide Business operates as a financial services platform tailored for small and medium-sized enterprises (SMEs). It offers a range of products, including free business accounts, financial management tools, and various borrowing options like business loans and asset finance. Additionally, Tide provides services such as invoicing, accounting software, and company formation assistance. Serving over 10% of UK SMEs, Tide is a significant player in the SME financial services market, known for its comprehensive suite of tools and reliable service.

When Was Funding Options Acquired?

Tide announced its acquisition of Funding Options on 29 November 2022, and the deal was completed on 9 February 2023. This acquisition comes at a crucial time when easy access to funding is vital for the growth of small businesses, especially during challenging economic conditions. The move aligns with the broader trend of consolidation in the fintech industry, where companies are merging to expand their service offerings and market reach, addressing the significant SME funding gap in the UK.

Why Was Funding Options Acquired?

• Market Expansion: The acquisition allows Tide to provide its 475,000 members with more credit options and access to Funding Options’ panel of over 120 lender partners, creating a major new marketplace for SME credit in the UK. Additionally, Tide aims to expand in the UK and globally, considering further acquisitions to accelerate growth and add to the services and products offered to its members.
• Technology Integration: Funding Options’ technology and data-driven lending platform, Funding Cloud™, will be integrated into Tide's services. This platform uses data analytics, open banking APIs, and Artificial Intelligence to auto-decision loan approvals, providing real-time access to competitive funding options and near-instant credit decisions. The integration will enable faster decision-making and broader distribution of funding options.
• Competitive Advantage: The acquisition positions Tide as a more comprehensive financial platform by combining its existing services with Funding Options’ extensive lender network and advanced lending technology. Funding Options’ established reputation and technology will enhance Tide’s ability to offer efficient, low-cost customer acquisition and high-quality service at scale. The combined entity will leverage Funding Options’ expertise and technology to provide a seamless and efficient funding experience, giving Tide a competitive edge in the SME lending market.

Acquisition Terms

• Acquisition Price: The terms were not publicly disclosed.
• Payment Method: The terms were not publicly disclosed.
• Key Conditions or Agreements:
  • The acquisition is subject to FCA (Financial Conduct Authority) approval.
  • Funding Options will continue to operate as a separate brand within Tide.
  • Tide’s existing credit intermediation business will merge with Funding Options, led by Simon Cureton, CEO of Funding Options.
  • The combined entity aims to provide more credit options to Tide’s members through a panel of over 120 lender partners.

Impact on Funding Options

The acquisition of Funding Options by Tide has led to significant operational changes. Funding Options will continue to operate as a separate brand within Tide, with its CEO, Simon Cureton, leading the combined credit intermediation business. This merger aims to leverage the strengths of both companies, integrating Tide’s existing credit services with Funding Options’ advanced lending technology. The combined entity, now known as Tide Partner Credit Services, is set to create one of the UK's largest marketplaces for SME credit, offering enhanced access to funding for small businesses.

In terms of product offerings, the acquisition promises to expand the range of financial services available to Tide’s 475,000 members. By incorporating Funding Options’ panel of over 120 lender partners and its data-driven lending platform, Funding Cloud™, members will benefit from real-time access to competitive funding options and near-instant credit decisions. While specific employee reactions have not been detailed, the strategic move is expected to positively impact customer experience by simplifying the process of securing finance. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly and efficiently.