Digital-first bank Atom has closed a £75m funding round which values the firm at £435m as it gears up for a potential flotation on the stock exchange.
The Durham-headquartered firm has raised the funds from its two biggest shareholders, BBVA, the Spanish Banking Group and Toscafund, the investment manager, as well as now opening the round to other existing investors.
The bank is now mulling an initial public offering as it head towards profitability, with boss Mark Mullen indicating it could happen as soon as next year.
“This capital will allow Atom to build on the progress we have made, and to keep offering real competition for people who want to own their own home, grow their own businesses and – at a time of rapidly rising costs – save for the future.” he said.
“It is also a fundamental next step on our journey toward IPO.”
City AM understands that no decision has been made on where the firm will float, but Atom is likely to come under political pressure to go public in London.
Downing Street has been looking to woo fintech firms into London listings in recent weeks, with John Glen, economic secretary to the Treasury, recently meeting with tech bosses to discuss how to make the UK an attractive environment for fintech firms to float.
Atom Bank, which offers savings accounts, mortgages and business loans and employs around 470 staff, is closing in on making a profit for the first time since launching to the public in 2016.
The firm’s latest financing round bring the amount raised by Atom to around £500m, and represents a resurgence in its valuation after it fell from £555m in 2019 to £300m in a funding round last year.
Mullen said that the three months to the end of December marked the firm’s first full quarter of operating profits, which comes as he rolled out a four-day working week to employees with no loss of pay.
Mullen indicated that the move was going “extremely well” for the firm, and the bank had seen improvements in days lost to sickness and in employee retention.