Digital bank Zopa has raised another 拢75 million in debt financing as it waits for the IPO market to warm up.
The company, founded as a peer-to-peer (P2P) lender but which now offers bank accounts and Buy Now Pay later services, recently appointed Peter Donlon and Kate Erb as CTO and COO respectively as it plots a pathway to IPO.聽
It had originally planned to list before the end of 2022, but falling valuations and a string of high-profile failures in the market has caused it to take its time.
It raised 拢75m in equity funding six months ago, led by IAG SilverStripe, and the same firm has led this debt round. It has raised 拢530m to date.
Zopa is on track to make 拢250 million this year on an annualised run rate, while losses narrowed to 拢24m in 2022. It achieved monthly profitability this year and has just hit its millionth customer.
CEO Jaidev Janardana said it has no plans to launch overseas as the opportunity in the UK is great.
鈥淭oday鈥檚 financing is a clear market validation of Zopa Bank鈥檚 financial performance, pointing to strong investor confidence in its growth and in its ability to deliver strong financial performance despite the economic uncertainty,” he said.
鈥淎s a profitable business, it is also a seal of approval for our responsible and sustainable business model, our strong unit economics, and our vision to build Britain鈥檚 best bank.
鈥淲e are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories as we get even closer to reaching full-year profitability in 2023 for the first time.鈥�
Zopa’s loan book is around 拢2 billion and it has issued more than 400,000 credit cards.
The company says the new funding will strengthen its balance sheet and enable it to make acquisitions.