Neil Woodford fund backs £50m fundraise by Atom Bank

Neil Woodford’s listed fund has backed a £50 million fundraise by Atom Bank to drive the start-up’s rapid growth.

Woodford Patient Capital Trust confirmed that it invested £10 million in the challenger bank, in its first major investment since its flagship sister fund was frozen last month.

The mobile-focused lender also secured investment from Spanish banking group BBVA, Toscafund and funds advised by Perscitus LLP.

Atom said the cash injection will be used to “fund further growth and to continue the bank’s investment in technology”.

The lender has grown rapidly since launching its first loans and savings account offering in 2016.

In the past year, the bank has seen lending, for homeowners and small businesses, jump by 76% to £2.4 billion.

The digital lender said it is currently attracting £20 million of business and £10 million of residential mortgage applications each week.

Mr Woodford’s stock-market-listed fund is pumping money into the lender to keep its stake at around 18%.

While the fund, which focuses on early stage companies, is not directly affected by the suspension of Mr Woodford’s Equity Income Fund, it has seen its share value slump by more than 30% since the freeze.

The Woodford Equity Income Fund was shuttered on June 3 after it was hit by a wave of customer withdrawals following a number of poor-performing investments.

Atom Bank was founded by former Metro Bank boss Anthony Thomson in 2014.

Mark Mullen, chief executive officer at Atom, said: “What’s important to customers is good products, good service and good value, so that’s where we’ve spent the majority of our time and energy.

“We’re growing our team here in the North East and will add 50 new roles this year to help us expand the range of products and services we offer, starting with Instant Access savings in the autumn.

“More than ever we are convinced of the importance of Atom’s role to drive positive change in UK banking.”