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Atom Bank’s sale process is on the brink of collapse as the auction for the digital lender failed to garner bids at its backers’ desired price of £600mn.
Investors in the Newcastle-based bank, which include Spanish bank BBVA and fund manager Toscafund, are considering halting the sale process because of a lack of interest from potential suitors, according to people familiar with the matter.
Private equity group Pollen Street Capital made a bid for Atom but its offer was below the asking price, the people said. Pollen Street has since withdrawn from the process, they added.
A Pollen Street takeover would have opened the door to a merger of Atom with Tandem, another digital lender already owned by the private equity group.
A collapse of the sale process would heap pressure on Atom’s management, with two people familiar with the matter saying that some shareholders would push for a shake-up if no buyer were found.
Changes could include the departure of chief executive Mark Mullen, who has led the company for 12 years, the people added. One person close to Atom said Mullen had the support of many of the bank’s large shareholders.
Atom Bank, BBVA, Toscafund and Pollen Street declined to comment.
Yorkshire Building Society and Leeds Building Society had also considered bids for Atom Bank, which has 250,000 customers, but ultimately decided not to pursue a takeover, the people added. Several other banks also ran the rule over Atom Bank but decided not to bid.
Leeds Building Society declined to comment. Yorkshire Building Society did not immediately respond to a request for comment.
Atom Bank, which employs 600 people, was founded in 2014 and was among the UK’s first digital banks without any branches.
Unlike other neobanks that function mainly as payments apps, Atom built a more traditional banking operation, with a large savings business and mortgage book. It was granted a banking licence in 2015 while Britain’s biggest fintech Revolut, valued at $75bn in a recent share sale, took about a decade to secure a similar accreditation.
However, Atom has also lagged behind rival retail fintechs such as Revolut or Monzo, which have 70mn and 15mn customers, respectively.
The ambitious attempt to sell Atom Bank at a £600mn valuation came after a fundraising round last year valuing the business at £350mn, down from £459mn in 2022.
The group, which since 2021 has allowed staff to work four-day weeks on full pay, previously counted former star fund manager Neil Woodford among its shareholders through his group Woodford Investment Management.
Atom had initially intended to pursue a stock market listing but pushed back the plans several times before opting for a sale process instead.
The group generated £5.1mn in pre-tax profits in the year to March 2025, down from £6.7mn in the previous period, according to its latest financial accounts published at Companies House. The results also show that the group had £4.2bn in mortgage balances and £7.5bn in customer deposits.
