Atom Bank raises £100M at a lower valuation
U.K.-based digital challenger Atom Bank raised £100 million in new equity financing from inside investors but took a valuation hit in the process, the FT reports.
Why it matters: Amidst a slowdown in fintech funding, more late-stage startups face a choice between down rounds or structured rounds to stay afloat.
Details: The new funding, which comes from existing investors BBVA, Toscafund and Infinity Investment Partners, values Atom Bank at £362 million, according to the report.
- That's down from the £435 million valuation the company received as part of a £75 million fundraising round in February 2022.
Between the lines: Atom Bank has long been considered an IPO candidate, with CEO Mark Mullen initially targeting a 2022 or 2023 listing.
- With the IPO market frozen, however, that target had shifted to a potential public offering in 2024 or 2025.
By the numbers: In its most recent annual report, Atom Bank reported its first annual operating profit of £4m and a near doubling of customer accounts to 224,000.
- Revenue grew 62% year over year, and savings deposits rose to £6.6 billion for the fiscal year.
- Now the bank says its current quarterly run rate is generating more than £100 million of annualized net interest income and £25 million of operating profit.
Of note: Atom competitor Monzo, which reported 7.2 million customers and £214.5 million in annual operating income in May, is reportedly raising £300 million in new funding at a £3.5 billion valuation.