County Durham challenger bank Atom has raised more than £75m from its two largest shareholders as it heads towards flotation.
Atom, the UK’s first app-based bank which has its headquarters in Aykley Heads, Durham, announced it raised the sum in new equity priced at 70p per share from shareholders BBVA, the Spanish banking group, and Toscafund, the British investment manager. It is also opening the round to its other existing investors.
The fundraise follows a £40m raise last April, bringing the digital lender’s total to more than £115m in the last 12 months.
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It comes three months after Atom became the largest company in the UK to introduce a four-day working week, with no loss of pay, for all of its team. Atom has since seen a 500% increase in job applicants, and substantial increases in staff engagement since adopting the new working pattern.
Chief executive Mark Mullen said the bank is moving into profitability and planning an IPO process to take place next year.
He said: “It has been a year of excellent progress for Atom. We’ve achieved a number of important financial milestones, maintained our excellent reputation with our customers and with the introduction of our shorter 4-day working week (with no loss of pay), we’re pioneering the future of work.
“Our investors are now backing our continued growth. This capital will allow Atom to build on the progress we have made, and to keep offering real competition for people who want to own their own home, grow their own businesses and - at a time of rapidly rising costs - save for the future. It is also a fundamental next step on our journey toward IPO.”
The company said its focus on lending has seen both mortgage and business loans grow by 30% in the last nine months.
In 2021 Atom passed £3bn of mortgage completions, with applications for its digital loans peaking at £315m in the third quarter. Its lending to small businesses also surpassed £1bn during 2021.
It said margins and revenues have also continued to grow, with its year to date interest margin rising to 1.28% compared to 0.51% in the financial year 2021. The bank delivered its first monthly operating profit during the second quarter and has continued to grow its revenues.
Last year saw total customer deposits grow by 16% to £2.5bn, with £1bn of savings held in Atom’s award-winning Instant Saver.
Atom said it will use the latest fundraise from investors to grow deposits by a further £2bn in financial year 2023.
