By Chris Dorrell
Atom Bank has completed a £100m equity raise from its long-term shareholders as the digital lender prepares for a likely London IPO.
The backing from its shareholders, including Spanish bank BBVA and private equity firm Toscafund, will help Atom to ramp up its lending to businesses and households.
The bank said the capital, the last it will be raised before a flotation, will be used to accelerate balance sheet growth, offer savers better rates and enable more lending to SMEs, first time buyers and homeowners.
Chief executive Mark Mullen said he was “delighted with this vote of confidence” from Atom’s investors.
“This money will be put to work to drive growth and to fuel the development of our franchise. UK customers need better outcomes and better banks,” he said.
Despite the £100m in backing, the Financial Times reported that the funding round valued the challenger at £362m, down from £435m at the start of the year.
Atom was founded in 2014 by Anthony Thomson, co-founder of Metro Bank, and Mullen, a former senior executive at HSBC and First Direct.
The branchless digital lender won its full banking licence in the UK back in 2016 becoming one of the UK’s first app-based banks.
Over the summer the Durham-based challenger reported a £4m operating profit in the 2023 financial year, up from a loss of £2m the year before. It remains deeply on the red on a statutory basis.
The capital raise will add to speculation that Atom Bank is on its way to an IPO in the not-too-distant future. It shelved plans for a London IPO last year due to volatile market conditions but Mullen has been open about his ambition to list in London.
