That’s according to a report Monday (June 28) from the Financial Times (FT), which says an auction for Atom Bank failed to attract bids at the 600 million pound ($756 million) range hoped for by the company’s backers.
Now, investors in the bank are considering pausing the sale due to a lack of interest, sources familiar with the matter told the FT.
Among the bidders was private equity firm Pollen Street Capital, though the sources said its offer was below the asking price, adding that the company was unlikely to significantly raise that bid. Pollen Street already owns digital lender Tandem, the news outlet added.
Atom’s management could face pressure if the sale falls apart, the report added, with two sources saying shareholders might seek a leadership shakeup.
The news follows a report from last month which said a pair of U.K. building societies were considering a bid. Now, those lenders — Yorkshire Building Society and Leeds Building Society — have chosen not to pursue a purchase, sources told the FT.
Founded in 2014, Atom Bank has around 200,000 customers and was one of the first English digital banks with no brick-and-mortar branches.
While other neobanks serve mainly as payments platforms, the FT added, Atom has a more traditional banking business. The report notes that it received its banking license in 2015, while the U.K.’s largest FinTech, Revolut, took roughly a decade to win similar accreditation.
In other digital banking news, recent PYMNTS Intelligence research has found that these institutions’ customers are doing more than simply experimenting with new payment methods.
“They are increasingly reshaping what mainstream payments behavior looks like, particularly as mobile-first consumers lean into digital wallets and become more comfortable moving money directly from bank accounts,” PYMNTS wrote last month.
A PYMNTS Intelligence report, “Pay by Bank Deep Dive: Digital Bank Users Are Ready to Switch,” found that people who patronize digital-first financial institutions already display many of the behaviors related to Pay by Bank adoption, like a reliance on tokenized payments, mobile commerce and login-based authentication flows.
The report, compiled in partnership with Trustly, found that digital bank users are not entirely rejecting traditional payment methods.
“But they are significantly more likely than other consumers to embrace alternatives to physical cards when incentives and protections are in place,” PYMNTS added.
