Zopa raises £75m debt as it awaits ‘right market conditions’ for IPO

Challenger bank Zopa has raised £75m in debt funding as it waits for the “right macroeconomic and market conditions” to IPO.

The tier two debt funding comes from prior investors, a Zopa spokesperson told UKTN, and is for “rapid growth without diluting the equity position of its shareholders”.

The spokesperson added that opting for debt over selling further stakes in the company will “enhance the returns we achieve on equity”.

The bank, which now has more than one million customers, has been making preparations ahead of an anticipated public listing.

“We still plan to IPO and can be ready in a short time, however we will not be rushed to make hasty decisions; we will wait for the right macroeconomic and market conditions,” the spokesperson added.

Zopa’s latest raise brings its total funding to £530m. It follows another £75m raise from existing investors back in February.

The London-based company provides financing and savings accounts. It uses AI and machine learning in the underwriting models of its services.

Zopa’s financial results, published last month, showed that it halved pre-tax losses to £23.8m.

Jaidev Janardana, CEO of Zopa Bank said: “We 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.”

Zopa has bolstered its executive team in preparation for its public listing, recruiting a CTO and COO in June as well as an ex-Deutsche Bank executive to its board.

Zopa in February acquired the Staffordshire BNPL firm DivideBuy for an undisclosed sum.