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Atom Bank's valuation set to halve on latest funding round

Atom Bank's valuation set to halve on latest funding round

Atom Bank's pitch to raise £40 million from existing investors is likely to lead to a sharply discounted valuation for the app-based lender, underscoring the difficulties faced by neo banking startups in attracting investors.

Sky News has learnt that the Durham-based startup is close to concluding a £40 million fund raise at 60p-a-share, just under half the price at which it raised equity in 2019.

Atom trailed the news last month, but made no reference to its steeply discounted price.

If the deal goes through, it is expected to further concentrate the bank's ownership in the hands of just two shareholders: BBVA, which owns just 40%, and Toscafund, which is likely to see its stake rise from 29% to 33%.

Atom Bank is not the only digital banking upstart feeling the pinch from a more critical funding community.

Loss-making UK challenger Monzo has been forced to swallow a 40% discount on £175 million in funding since the start of the pandemic, cutting its valuation from £2 billion to £1.2 billion.

Comments: (1)

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 12 March, 2021, 09:47Be the first to give this comment the thumbs up 0 likes

This article should really put into perspective what a fab milestone Anne and Starling have acheived. Being a digital only challenger bank that makes a profit! I think it shows if anything that the Starling valuation is under where it really should be.