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UK’s app-based bank Atom to raise £40M as it prepares for IPO in 2022

Atom

UK’s first app-based bank Atom is all set to raise £40M from existing shareholders. This comes at a time when the company is focusing to move from mortgage and business lending to profitability within a year and to float its shares the year after.

Revenues growing constantly

Atom is witnessing strong growth in revenue and is all set to achieve 100bps of Net Interest Margin (NIM) by the end of March this year. Also, the company will grow its lending to SMEs on its balance sheet to more than £700M by the end of this March. In the last 12 months, it has tripled its business loans as well. This massive growth has been achieved both within the Coronavirus Business Interruption Loan Scheme and also independent of government schemes.

Also, Atom has seen strong and profitable growth in its mortgage portfolio having already added £362M of mortgages in the second half of its financial year 2020/21. Since its debut, Atom has loaned £2.8B to UK mortgage customers.

As a result of this growth, the Durham-based lender confirmed its place in the secondary markets for UK mortgages issuing a £775M prime mortgage securitisation last year.

Launches new Instant Saver

Atom’s award-winning savings products are hosted on UK fintech Thought Machine’s transformational ‘Vault’ platform. This is a part of a transformation to real-time cloud-native technology across all of Atom’s technology stack that has also been completed last year.

Furthermore, Atom launched a new Instant Saver in September 2020 to very strong reviews, and has added £0.6B of Instant Saver balances to its existing £1.7B of fixed-rate savings.

Mark Mullen, Chief Executive Officer at Atom said: “We think of Atom as an exceptionally engaging and efficient banking machine that helps and supports customers to own their homes or build their businesses. We’ve been there for new and existing customers during the pandemic, and in a year when we have held our operating costs constant I’m delighted that we have coupled substantial income growth with an enviable record of customer experience.”

Asked about the future and the possibility of an IPO for Atom, Mullen said: “We turn to our shareholders for capital as and when we need it to drive growth. Despite it being a difficult environment for all companies that need to raise funding, this capital raise will allow us to continue to progress towards profitability and ever-improving levels of efficiency and engagement. The team retains an IPO as our objective and we’ll take the business there when we and the markets are ready. After the year that’s just gone I’m not going to claim perfect foresight, but we’re looking at the financial year 2022/23 as our IPO target.”