Atom Bank raises more than £75m to fuel growth as it heads toward IPO

By Joy Dumasia

Atom, the UK’s first app-based bank, has raised more than £75 million in new equity priced at 70p per share as it continues to grow its profitability and drive to IPO. The raise will be led by BBVA and Toscafund with co-investors Infinity Investment Partners and is now being opened to other existing shareholders. The announcement followed a £40 million raise in April 2021. The Durham-based digital lender has raised more than £115 million in the last 12 months. 

Atom’s focus on lending has come to fruition in the last 9 months, with both mortgage and business loans having grown by 30%. In 2021 Atom passed £3 billion of mortgage completions, with applications for its multi-award winning digital loans peaking at £315 million in Q3. Atom’s on-balance sheet lending to small businesses also surpassed £1 billion during 2021. 

Fuelled by the quality of its lending and a steady reduction in the bank’s cost of funds, margins and revenues have also continued to grow. Year to date, Atom’s interest margin has risen to 1.28% versus 0.51% in FY21. The bank delivered its first monthly operating profit during Q2 and has continued to grow its revenues throughout the year while maintaining tight control on its costs. 

2021 saw total customer deposits grow by 16% to £2.5 billion, with £1 billion of savings held in Atom’s award-winning Instant Saver. With this latest boost from investors, Atom will seek to grow deposits by a further £2 billion in FY23, bringing more value and competition to a savings market that has taken too long to respond to base rate changes and the needs of savers. Based on its commitments to value, speed and simplicity, Atom continued to foster an excellent reputation with its customers and had a Trustpilot rating of 4.8/5 for the period October to December 2021 and an overall Net Promoter Score of +82. 

In November, Atom became the largest company in the UK to introduce a four-day working week for all of its team, with no loss of pay. Atom has since seen a 500% increase in job applicants and substantial increases in staff engagement. 

Mark Mullen, Chief Executive Officer at Atom, 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.”