Atom Bank mulls listing via Spac ahead of IPO plans

Atom Bank has held discussions with financial advisers about whether it might go public via a Spac, as the UK digital bank weighs its options ahead of a planned initial public offering of its shares.

“It’s an interesting and intriguing vehicle, it’s on our radar,” the bank’s chief executive and co-founder Mark Mullen told Financial News, adding the fintech firm has had early-stage discussions exploring growing its business using a special purpose acquisition company. 

Mullen, who launched Atom Bank in 2014, said the bank’s primary strategy for going public is “still the orthodox IPO”, because of the lack of Spacs currently present in the London market. The City has so far attracted just one Spac IPO out of around 300 listings globally so far this year, according to data from Dealogic.

“Right now we’re more focused on what might be described as a more traditional route but… you better believe Spacs are on our radar — at the moment not in the UK, because they’re not here, but I kind of think they will be,” he said.

The banking boss added that a Spac route would help speed up Atom’s listing timeline, which is currently forecast for the financial year 2022/23. The digital bank closed a £40m private fundraising effort in April, with shares priced approximately 40% lower than the £530m valuation that the startup received in mid-2019.

The UK’s attractiveness as a destination for startups to list is in the process of a makeover, as the government attempts to woo tech founders away from going public in popular locations such as New York or Amsterdam. While reports suggest fintech starlet Wise may choose London for its listing plans, online brokerage eToro recently opted for a Spac listing in New York.

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However, Mullen said it was important for Atom shares to be available for UK investors, with recent proposals to overhaul the country’s listing regime by Lord Jonathan Hill, a former European commissioner for financial services, making the City “frankly more attractive” to startup bosses.

Mullen said an international listing would be undesirable for Atom because of ongoing tensions between the UK and EU over financial services, investment and markets regulation, and would be a particularly bad look for a UK-founded business.

“We want no part of being in the middle of that. Is it helpful for us to say, I’ll tell you what, we don’t like the look of London?” he said. “We’re a company that is founded in the UK, our customers are in the UK… I think it would be strange for us to say, I’ll tell you what we’d like to do, we’d like to list in Amsterdam.”

READ  Atom Bank sets sights on IPO by 2023 amid £40m fundraising

A spokesperson for Atom told FN that the company is now valued at £300m, with its investors including BBVA and Toscafund. Mullen said he was largely unconcerned about the lower valuation, as there is still a lengthy runway to the point at which it becomes more relevant for a public listing of its shares.

Schroders is also an investor in Atom after it took over a stake previously managed by Woodford Patient Capital Trust when the latter collapsed in 2019. Mullen confirmed that Schroders chose not to participate in the latest round, allowing Toscafund to increase its shareholdings in the bank.

An Audience with Mark Mullen will be published in April.

To contact the author of this story with feedback or news, email Emily Nicolle

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