UK challenger Atom Bank has closed a £40m fund raise at 60p-a-share, which is just under half the price it raised equity in in 2019.
Atom previously stated last year it was eyeing an equity investment of between £50m and £150m via a share sale. However, due to a shareholder diversifying their assets away from Atom, the higher-end raise did not materialise.
The recent raise was led by Spanish firm BBVA – a company that owns around 40% of Atom – as well as Toscafund Asset Management. In 2018, these same two firms raised £149m for the challenger bank.
Atom offers a mobile app where consumers can access saving accounts, apply for mortgages or take out personal loans.
According to Atom, despite the steeply discounted valuation it claims it has seen its ‘best ever year’ and is preparing for an IPO at some point in the next four years. In addition, the firm said its revenues are growing strongly and is on course to achieve over 100bps of net interest margin by the end of March.
Atom also remarked lending to small-and-medium sized enterprises on its balance sheet has tripled over the past year to £700m, whole it has taken over £400m of mortgage applications in the second half of the 2020/21 financial year.
Atom CEO Mark Mullen said, “On the back of our best year ever and with really strong momentum baked into the business, this raise will accelerate our progress even further during 2021 and prepare us for the next stage in our growth and development prior to IPO, which we anticipate taking place in the next two years or so.”
In October 2020, Atom picked regtech SurePay to help the app-based bank to fight fraud and prevent misdirected online payments with its Confirmation of Payee solution.
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