BBVA’s Majority Ownership of Atom Bank
Atom Bank – Britain’s first digital-only challenger bank – has just raised another £50m, this gives it a valuation of around £530m. Spanish banking giant BBVA is their main investor. BBVA invested 45m back in 2015 when Atom Bank was only 1 year old – they hadn’t even launched their app yet. BBVA had a 29.5% equity stake, this is because under UK law if a company takes a 30% or higher share, regulation requires that the shareholder must make a mandatory takeover bid. However, BBVA later sought and was granted permission by the Takeover Panel to own more than 30% without needing to make an offer to buy Atom Bank. BBVA then upped its stake to 39% in 2018, now they’re maintaining their 39% majority ownership with this recent £20m investment.
Atom Bank – Bringing the Future to the People
Atom Bank is the only European company to be consistently included in KPMG’s top 10 FinTechs in their annual ‘FinTech 100’ list for the past 4 years. This is due to Atom Bank’s futuristic approach to banking. Will.i.am, the quirky UK artist, tech investor and philanthropist, was intrigued by these futuristic aspects. His curiosity for the startup led him to become their strategic advisor – it is rumoured that this was part of a £4m shareholder deal.
“Our lives are faster than ever before, but the banking industry hasn’t kept up. The scale of Atom’s ambition to help people understand and manage their money better, and it’s clever use of technology to give people an entire bank on their phones is awesome.” – Will.i.am
As previously stated, Atom Bank was the UK’s first mobile-based challenger bank. Furthermore, Atom Bank has been using biometric technology – face and voice recognition – since their 2016 launch. They also have a very customer-centric approach with their slogan being “It’s all about you, you, you”. During this early period, a wave of competitors – Revolut, Monzo, Starling, and more – joined the FinTech race. However, Atom Bank doesn’t offer a current account, it offers savings accounts, business loans and mortgages with very competitive rates. In fact, their impressive rates are part of Atom Bank’s high-risk strategy to gain market share and brand recognition. This means that they will be lossmaking for a while. It is believed that they will seek another £175m in the near future, then in 2022 Atom Bank is expected to go public once they become more profitable.