UK’s Atom Bank raises another $206M led by BBVA for millennial and SMB financial services

Atom Bank, the startup based out of Durham, England that operates a mobile-only bank targeting consumers between the ages of 18 and 34, has raised another big round of funding. The company today announced another £149 million ($206 million) in funding to double down on its existing business — focused currently on savings accounts, mortgages and small business loans — as well as to build out more products for the future.

As with its previous several rounds, this latest investment was led by BBVA, the Spanish bank that has backed a number of fintech startups, and acquired Simple in the US several years ago to help break into North America.

BBVA itself accounted for £85.4 million of this latest round and now has a 39 percent share of the bank. Notably, the company has confirmed to me that BBVA will not be launching a takeover offer for Atom Bank.

Under UK law, if a company takes a 30 percent or higher share, it triggers a regulatory requirement for the shareholder to make a mandatory takeover offer. “BBVA have sought and been granted permission from the Taveover Panel to own more the 30% of the bank without having to make a bid to buy Atom,” a spokesperson confirmed to us.

Toscafund is investing £54.4 million and is also upping its stake in the bank.

The company has not disclosed its valuation, but based on our calculations — its previous funding of $102 million a year ago valued it at $320 million — this round will value the company at at least $526 million if it’s anything other than a down round. BBVA notes that its 39 percent stake equates to £167 million. Doing the straight math on that brings the total valuation to $593 million (£428 million).

Atom has definitely grown in the last year, when it was less than a year old (it launched in April 2016, and was founded in 2014). The company — which interfaces with customers via the web but also through iPhone and Android apps — says it now has £1.3 billion in deposits, and it has loaned £1.2 billion in the form of mortgages and SMB loans.

“Atom is a rapidly growing, ambitious and vibrant business that is founded on the unique fit of our shareholders, our team and our partners,” said Bridget Rosewell, Atom bank’s chair, in a statement. “I am delighted that our investors have decided to back the bank with such a significant injection of capital to fuel our mission to change banking permanently for the better.”

Atom has now raised close to £400 million, with other investors in the past including Anthemis Group and Woodford.

The startup is tapping into an ongoing strong streak for fintech out of the UK, and specifically in a new wave of startups that have been building banking infrastructure for younger adults and others who are looking for alternatives to more traditional banks — which can have more onerous requirements for doing business by comparison. Others also competing against Atom in Europe include Monzo, Starling, Tandem and N26.

“We are very proud of what we have achieved in the Atom journey to date and we are excited about our plans for the future,” said Atom bank’s CEO, Mark Mullen. “This further significant injection of capital secures the bank’s place as a disruptive force in the mainstream of UK banking. We will continue to invest in growth, in our technology and in our products as we continue to push ahead with the support of our investors.”