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Atom Bank plans £40m shareholder fundraise in prep for future IPO – FinTech Futures

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Atom Bank has announced a planned £40 million fundraising from its existing shareholders, as the UK direct bank gears up for an initial public offering (IPO).

Atom planned a similar £150m raise last year

The Durham-based bank expects its small and medium-sized enterprise (SME) lending business to have grown to more than £700 million by March 2021.

It saw numbers boosted by the UK government’s Coronavirus Business Interruption Loan Scheme (CBILS).

It also says it has seen “strong and profitable growth” in its mortgage operations.

CEO Mark Mullen says the funding is needed to drive growth, and hinted that the bank may go back to shareholders in future.

Atom originally planned a £150 million shareholder round in August 2020, reported at the time as preparation for the a 2022 IPO.

The bank has raised £429 million to date from eight funding rounds. Its largest investment arrived as £150 million from Spanish banking group BBVA, which retains a 40% stake in Atom.

BBVA even planned a takeover of the UK challenger. Rumours swirled in January 2019 that the Spanish giant had its eyes on Atom, but they never materialised.

Founded in 2014, Atom Bank opened for business in 2016. It claims to be the first challenger bank in the UK market.

It has a collection of technology platforms, including FIS’s Profile core banking system, Wolters Kluwer’s OneSumX for regulatory reporting, and Phoebus Software for secured business lending.

The bank’s total lending grew by 76% in 2019 to £2.4 billion, supported by growth in deposits from £1.4 billion to £1.8 billion.

In late 2019, the bank picked Google Cloud to underpin its application and product development. The bank had been using a third-party data centre since 2015.

Related: Starling set to raise £200m led by US investor Fidelity at $1.5bn valuation