Brexit concerns derail the Spanish giant’s takeover plans, leaving the UK start up looking for funds.
Digital lender Atom Bank is preparing to launch a £50m fundraising after its largest shareholder decided against mounting a takeover bid for the business amid Brexit uncertainty.
The app-only lender has now begun talking to investors to raise this sum, after Spanish banking giant BBVA deciding against making a full-scale bid for the three-year-old start up.
BBVA’s board is concerned about the ongoing impact of Brexit on a slowing UK economy, said Sky News without citing sources. The Spanish lender owns almost 40 per cent of the bank, registered in Durham.
Reports first surfaced in January that BBVA planned to takeover Atom, after appointing US rival Citi as an advisor.
Atom raised almost £150m around a year ago, with BBVA leading that investment round. The bank has long-term plans to launch an initial public offering in 2022. The start up has taken in over £1.3bn in customer deposits since it was founded in 2016.
The bank competes against a host of UK-based digital lenders, such as Monzo, Revolut and Starling Bank, who have raised hundreds of millions of pounds from investors by convincing them their lean operations can challenge the dominance of high street banks.
Most of these services are loss-making and are fighting to add users, which they later hope to turn into profitable customers.
Atom signed an eye-catching deal with the rapper and producer Will.i.am to act as a technology consultant and spokesman for the bank in 2017.
Atom declined to comment.