Atom Bank is planning a final private equity raise of at least £50m next year after being forced to delay its stock market debut.
The digital bank, which launched in 2016, is trying to raise money from new investors and is currently in discussions with a number of interested companies, including private equity firms, according to a person familiar with the situation.
The fundraising, expected in the first half of next year, is likely to be the final stage before the mobile app-based bank floats on the London Stock Exchange.
Atom, headquartered in Durham, England, was forced to delay its initial public offering this year as a result of a tough market environment that caused a number of companies to shelve their IPOs.
Atom hopes to take off in 2024 after new shareholders come on board, a person familiar with the bank’s plans said. Atom declined to comment.
The bank, which is yet to post an annual profit, announced on Friday a £30m funding round from existing investors to support growth until it raises bigger funds next year.
BBVA, one of Spain’s biggest banks, private equity firm Toscafund and London-based Infinity Investment Partners were part of the £30m raise, valuing the bank at around £460m.
Mark Mullen, chief executive of Atom Bank, said: “In recent weeks we have made waves with our fixed and instant depositor rates, surpassing £4.5bn in retail deposits and creating a gap between banks like Atom that pay a fair return. deposits and those that simply do not respond to the market.
Atom was one of the first mobile-only banks to launch in the UK, winning its own banking license ahead of rivals Monzo and Starling.
However, it has not evolved as rapidly as its digital peers. Atom’s first plan to open a current account fell apart after being hit by numerous delays.
Gary Greenwood, an analyst at Shore Capital, said: “They can run a business with deposits. They also have an operational advantage in terms of costs, being digital only without a branch network.”
Digital banks are also struggling with strict capital requirements from regulators, which they argue are stifling their ability to lend.
Atom reported an operating loss of £2m last year, but is set to turn a monthly profit from June 2021.
The bank was founded by Anthony Thomson, who inspired the name, and Mullen, who was previously chief marketing officer at First Direct.
Atom provides savings, mortgages and loans to small businesses. According to its latest annual report, the bank has lent 3.3 billion pounds.