One of the UK’s top digital challenger banks, Atom, is gearing up to raise fresh funding from investors as it eyes £1bn of deposit holdings, City A.M. can exclusively reveal.
The app-only bank, which boasts music superstar Will.i.am, Neil Woodford and Spanish bank BBVA among high profile backers, has already raised more than £200m to date.
The three-year-old startup is now looking to raise fresh cash to sustain its rapid growth, largely from existing investors but which could also include new ones, a spokesperson for the bank confirmed.
BBVA is Atom's biggest backer, holding a 30 per cent stake, followed by Woodford and Toscafund. All three made an equity investment in February as part of a massive £113m fundraise - one of the biggest to date for a digital challenger.
Early backers of Atom also include private equity veteran Jon Moulton and Jim O’Neill, the former chairman of Goldman Sachs Asset Management. It also raised £30m in debt financing from the British Business Bank over the summer.
Founded by the former chairman of Metro Bank, Anthony Thomson, and the ex-chief executive of First Direct, Mark Mullen, Atom offers savings, mortgages and small business lending. Saving deposits at the bank grew from just over £500m at the end of March to £900m in October and are poised to surpass the £1bn mark.
Plans for current accounts were paused over the summer, but remain in Atom's plans. It is waiting to see the outcome of Open Banking, which will bring in a standard for banks to share data with startups.
Atom's latest funding round, expected to close next year, follows a fresh injection of cash for rival digital banks and a wider boom in fintech funding. Monzo raised £71m and is eyeing a further £30m via crowdfunding next year, while Starling is seeking to raise £40m. And Revolut has applied to become a fully licensed bank.