Durham-based Atom bank, the UK’s first app based bank, has raised more than £100m of funding.

The new equity capital from long-term shareholders BBVA, Toscafund and Infinity Investment Partners is believed to be the largest private capital raise by a digital bank in the UK this year, and the funds will be used to accelerate lending following a period of record growth.

 Atom recently announced its first full year of operating profit, with the FY23 results showing revenue growth of 62%, customer numbers doubling to 224,000, and savings deposits rising to £6.6bn.

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Atom has already eclipsed that figure for operating profit this financial year, with current quarterly run-rate generating +£100m of annualised net interest income and +£25m of operating profit.

Atom has already loaned more than £4bn to UK homeowners, and over £1bn to small businesses since launch, with the funds enabling the digital bank to further ramp up lending activity.

The capital raise process started early this year, and forms part of Atom’s long-term strategy.  

 Mark Mullen, Chief Executive Officer at Atom, said: “I’m delighted with this vote of confidence in Atom from our investors, and to have their ongoing backing is a fantastic boost.

“Atom continues to grow strongly and sustainably. We are a cautious bank with an excellent track record of lending responsibly and successfully. We have a compact business model and we keep tight control over our costs. We look after our customers by offering them consistently great value and treating them fairly.

“This money will be put to work to drive growth and to fuel the development of our franchise. UK customers need better outcomes and better banks. Our vision remains as valid today as it was when we founded the company – change banking for good, for the better, for everyone.

The bank launched operations in April 2016, and offers mortgages and savings through its app, alongside secured business lending for small and medium-sized enterprises.

With a team of more than 500 people, Atom also has some of the best customer service credentials in the UK, having achieved 5-star ratings on both the iOS and Android App Stores, and on Trustpilot, whilst consistently delivering Net Promoter Scores (NPS) in the high 80s.

In 2022 Atom signed a five-year Memorandum of Understanding with Durham University to progress key research and diversity initiatives.

The region has one of the highest levels of youth unemployment in the UK and Atom wants to address the critical digital skills gap and helping develop young people and other groups that are under-represented within the industry.

All employees enjoy a four-day working week, after Atom became the largest company - and only bank - in Britain to introduce the policy for all employees, with no reduction in salary.

CEO Mark Mullen has 30 years’ experience in the sector and was previously CEO at the multi- award-winning telephone and internet bank first direct. The team is supported by a strong non-exec board, chaired by Lee Rochford.