Spain's second-largest bank splashed out £45m on a 29.5 per cent stake in the bank which got the thumbs up from regulators back in June.
Atom, set up by former Metro Bank chairman Anthony Thomson and First Direct chief executive Mark Mullen, will soon launch with an app and be initially mobile-only.
The new investment gives BBVA a majority stake in the Durham-based startup. Toscafund is also a shareholder.
"We’re excited by BBVA’s decision to invest in Atom, an excitement that’s about more than money," said Mullen in a blog post.
"Don’t get me wrong, it’s a lot of money and of course the money is important but it’s only one of the things we need to help us build our business. BBVA has lots of banking experience and they also have access to considerable financial and material resources, but the real reasons we are enthusiastic about this deal are much, much simpler."
"First up, they get what we are tying to achieve here in Atom (because as far as we can tell they’re trying to do something similar themselves) and second, we really like their people."
Several challenger banks have sprung up in recent years to challenge the big high-street banks, with Shawbrook and Aldermore floating. Metro Bank turned to private lending pushing back a slated IPO.