Atom Bank, a UK-based startup that is pioneering a mobile-only bank targeting consumers between the ages of 18 and 34, has raked in another £83 million ($102 million) in funding led by BBVA, the Spanish bank and owner of Simple in the US. The funding lends Atom a post-money valuation of £261 million ($320 million), as confirmed by TechCrunch. BBVA was also leading in Atom’s previous $128 million round in November 2015.
The company plans to use the funding to keep building out its customer base and services, and also provide capital for lending: oficially launching in April 2016, Atom gives customers access to the services via iPhone and Android apps. Mortgages, Fixed Saver accounts and secured loans for small and medium-sized businesses are just some of the services it has on offer today.
BBVA was at the head of the round with an investment of £29.4 million, saying that this investment will help it maintain a 29.5 percent share of the startup post-money. In its last round, Atom was valued at £152.5 million (just over $200 million), making this a significant up-round. To date, the startup has now managed to raise £219 million ($268 million).
BBVA’s stake being just under 30 percent is calculated: as per UK law, if a company takes a 30 percent or higher share, it puts into motion regulatory requirement for that shareholder to make a mandatory takeover offer.
Fintech has been racing ahead as one of the strongest presences in the UK tech scene, with many startups hopping on to that bandwagon to provide products that use new channels like mobile and the internet to cut down the costs of offering service. Atom has found a way to woo early users by calling them “founders” in its promotional materials.
Although not disclosing any metrics about its usage, Atom still appears to be on the early and small side. According to the company, it now has 14,000 but is growing fast. Anthony Thomson, the founder and chairman of Atom (who previously founded another disruptive player in UK banking, Metro Bank) said:
We are very pleased with the response we have had from investors. Our customers benefit from the backing of highly reputable investors who are supportive of what we are doing. This is a great vote of confidence in our growth prospects and plans for the future. With the work we have done so far we are just beginning to see how transformational our new approach to banking can be. There is so much more to come from Atom in the coming months and years.
Others participating in this round include previous backers Woodford Investment Management, Toscafund Asset Management, as well as other unnamed investors.