Atom Bank has raised over £100 million in new equity capital from long-term shareholders BBVA, Toscafund and Infinity Investment Partners.
Atom recently announced its first full year of operating profit. The FY23 results saw revenue growth of 62%, customer numbers doubling to 224,000, and savings deposits rising to £6.6 billion.
It says it has already eclipsed that figure for operating profit this financial year, with current quarterly run-rate generating more than £100m of annualised net interest income and more than £25m of operating profit.
The app-based bank said the funds will be used to accelerate lending following the period of record growth.
Durham-based Atom raised more than £75m last year in a funding round that valued it around £435m. The Financial Times reports that the latest investment values it at £362m amid high interest rates and more cautious investor sentiment in the overall market.
The capital will enable Atom to accelerate balance sheet growth, and create an even more compelling proposition for savers, homeowners, first time buyers, and SMEs, which is faster, easier and better value than what is offered by competitors and the high street banks.
Atom has already loaned more than £4bn to UK homeowners, and over £1bn to small businesses since launch, with the funds enabling the digital bank to further ramp up lending activity.
The capital raise process started early this year, and forms part of Atom’s long-term strategy to deliver a liquidity event in the future, it says.
CEO Mark Mullen, who described last year’s funding as “a fundamental next step on our journey toward IPO”, described the latest funding as a “vote of confidence in Atom from our investors”.
“Atom continues to grow strongly and sustainably. We are a cautious bank with an excellent track record of lending responsibly and successfully,” he added.
“We have a compact business model and we keep tight control over our costs. We look after our customers by offering them consistently great value and treating them fairly.
“This money will be put to work to drive growth and to fuel the development of our franchise. UK customers need better outcomes and better banks.
“Our vision remains as valid today as it was when we founded the company – change banking for good, for the better, for everyone.”