Monday 22 July 2019 7:00 am

Woodford props up £50m funding for Atom Bank

Digital banking stalwart Atom Bank has today raised £50m from its existing investors, including former star fund manager Neil Woodford.

Woodford, who previously held a stake in Atom through his beleaguered Equity Income fund, has invested £10m in the fintech firm through his other listed entity Woodford Patient Capital Trust.

The trader transferred his stake into the trust earlier this year, ahead of the Equity Income fund being suspended following a rush from investors taking their money out.

Other participating backers in the round included Spanish banking giant BBVA, London-based investment firm Toscafund and funds advised by Perscitus. BBVA holds a 39 per cent stake in Atom, while Woodford now holds roughly 18 per cent.

The fintech startup, which itself has been subject to reports of financial difficulties, said the new capital would be used to fund further growth and product development. It will also add 50 new roles to its 350-strong headquarters in Durham.

Chief executive Mark Mullen told City A.M. that suggestions the bank had slowed down lending were “concerning”, adding it had increased lending 76 per cent in the last year alone.

Mullen said the bank has “a very clear plan” to pursue a public listing between April 2021 and March 2022, if market conditions were suitable.

He added Atom remains in “growth mode”, after filing a £53m loss last year.

“We’re not oblivious to profitability, [but] like any bank, we have to pay our way,” he said.

“We’re raising less than our original funding targets right now… The original plan would have seen us raise capital earlier, and we’ve not needed to do that.”

Atom, which counts US rapper among its advisers, last raised £149m in March last year. Today’s round, first reported by the Sunday Times, takes its total amount raised to just over £450m.

Main image credit: Atom Bank