Durham-based digital bank Atom Bank has raised over £100m in fresh equity from shareholders BBVA (BME:BBVA), Toscafund, and Infinity Investment Partners, marking the largest private capital raise by a UK digital bank this year. The funds are intended to accelerate lending and enhance services for savers, homeowners, first-time buyers, and SMEs as part of a broader expansion strategy.
The bank, under the leadership of CEO Mark Mullen (NASDAQ:MULN), has seen significant growth. Atom Bank recently celebrated its first full year of operating profit, accompanied by a 62% rise in revenues. The customer base doubled to 224,000 and savings deposits surged to £6.6bn. For the current financial year, the bank is already outperforming these numbers with over £100m in annualized net interest income and more than £25m in operating profit.
Despite the recent success, Atom Bank's valuation saw a drop from an initial £435m to £362m last year. However, the new funding round suggests a potential postponement in its hinted Initial Public Offering (IPO). Initially, CEO Mark Mullen suggested a liquidity event within 2024-2025, but it now appears to be part of an undefined long-term strategy.
The funds raised will not only boost the balance sheet growth but also ensure profitability as Atom Bank continues to navigate the competitive landscape of digital banking. This fundraising forms an integral part of Atom's future-oriented strategy, setting the stage for a potential liquidity event down the line.
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