Another hopeful among Europes so-called challenger banks startups taking on the big names in consumer banking by targeting niche groups of users with a more modern set of tools to manage users money has raised a sizeable round of funding to expand its business.Atom Bank which targets mainly millennial-aged consumers (current slogan: Its all about you, you, you) with mobile-first savings accounts and mortgages as well as small business loans has raised a further 50 million in funding.
Its not disclosing its valuation officially, but sources confirm its 530 million (or around $660 million at current rates), up from 450 million previously.Whats important to customers is good products, good service and good value so thats where weve spent the majority of our time and energy, said Mark Mullen, Atoms CEO, in a statement.
Were growing our team here in the North East and will add 50 new roles this year to help us expand the range of products and services we offer, starting with Instant Access savings in the autumn.
More than ever we are convinced of the importance of Atoms role to drive positive change in UK banking.This latest round included investments from banking giant BBVA which led its last round of 149 million in 2018 as well as Toscafund, Woodford Patient Capital Trust and funds advised by Perscitus LLP.
Other high-profile investors have included the likes of musician and embracer of all things future technology, will.i.am.The startup was co-founded by one of the industrys earlier banking disruptors Anthony Thomson, who previously co-founded one of the first entities to challenge the dominance of High Street banks in the U.K., Metro Bank.
Atoms rise mirrors a larger trend in Europe, and especially in the U.K., of what are collectively referred to as challenger banks.Atom, founded several years ago, was one of the first, but there are now a number of others building banking offerings sometimes on top of more legacy infrastructure, which they take as white-label services that appeal to younger earners and savers because of lower fees, more flexibility in how money can be moved and borrowed and perks aimed specifically at their demographic.
Others include Monese, Monzo, Revolut, Starling, N26 and Tandem.Atom says that in the last year its total lending, covering both homeowners and small businesses, was up by 76%, to 2.4 billion, with deposings accounting for 1.8 billion of that (up from 1.4 billion).
Atom says it gets applications of up to 20 million of business loans and 10 million of residential mortgage each week.All good signs, but the crowded market of challengers, alongside bigger banks finally getting their new business strategies in order, is in part what is spurring this investment and what the company plans to do with it.In November 2018, Atom announced that it would be partnering with a fintech startup called Thought Machine founded by an ex-Googler several years ago to migrate all of its banking technology to Thought Machines Blockchain-based platform called Vault.
The plan has been to move Atoms operations into the cloud, and to a much more modern set of infrastructure, to reduce the costs to run it, and also to start to introduce new services although Atom doesnt specify when.Still, it appears that the companys current metrics and the progress its had so far in its Thought Machine migration is encouraging investors.This latest raise recognises the enormous progress that we have made on our journey to disrupt UK banking, and is a clear signal of our investors support for our future plans, said Bridget Rosewell, Atoms chairwoman, in a statement.