The cash injection will be used to continue the bank's investment in technology as it prepares to adopt a cloud-based IT model and to launch new products using smart contract core banking technology from Thought Machine.

Thought Machine's Vault product comes with a full suite of retail banking products that are implemented via a system of smart contracts and has cryptographic ledgers for watertight security.

The bank is also working with Newcastle University to develop a blockchain-based system for mortgage applications.

Mark Mullen, chief executive officer at Atom says: "We’re 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 Atom’s role to drive positive change in UK banking.”

Atom launched its first mobile mortgage product in December 2016 and has taken £1.8bn in deposits and lent over £2.4bn to small businesses and homeowners. The challenger says it is welcoming up to £20m of business and £10m of residential mortgage applications each week.

In June last year, BBVA completed an £85.4m investment into Atom, increasing its stake to 39% and prompting speculation that it was preparing for a full-scale takeover as the bank suffered in a contracting market.

However, Woodford Patient Capital Trust, set up by former star trader Neil Woodford still maintains an 18% stake following the latest funding round, in which he invested a further £10 million. The trader transferred his initial stake in the bank out of his beleaguered Equity Income Fund earlier this year, before it was suspended following a rush from investors taking their money out.

Today's round takes the loss-making challenger's total funding to £450 million.