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Atom takes £30m loan: is it outpacing Monzo?

26 June 2017|by Beauhurst

For a comprehensive overview of UK fintech investment data, take a look at our guide.

On the 21st June 2017, challenger bank Atom received £30m from the investment arm of the British Business Bank, a government-backed initiative to support growing companies. 

This fundraising was not equity investment, as all of Atom's previous investment rounds have been, but a loan. It comes three months after Atom's largest funding round to date, of £83m (from investors including BBVA, Toscafund, and Woodford Investment Management):

atom valuation.png

Securing debt funding is often a sign that growing companies are approaching profitability, and Atom is the second major challenger bank to take a loan of this kind: part of Monzo's (much smaller) £4.8m deal last October was debt funding. The two other major players in this space are Starling Bank and Tandem. But how do the four compare? 


Despite Monzo's steady growth in popularity by search terms, Atom has raised by far the most capital. That said, Tandem Money has managed to close the most rounds – despite its recently thwarted attempt with Fraser Financial Services.

equity raised copy.pngEquity raised in £m, with number of rounds highlighted in white

Tandem is not, however, far behind on the valuation front, and comes second only to (the far-and-away market leader) Atom. Tandem and Atom are the two oldest companies in this selection: both were founded back in July 2013, so have a head-start on Monzo (Feb 2015) and Starling (July 2014).

valuations copy.pngValuations for each firm with the date calculated

The field is new, and there are plenty of incentives for traditional banks to lobby for regulatory pressure to dampen the enthusiasm of these young companies. The extent to which challenger banks will end up disrupting the high-street market remains to be seen. But with valuations already in the hundreds of millions, it is more than possible that we are looking at at least one unicorn foal in this cohort. 

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