Zopa Bank: UK fintech raises £80m with its first LSE bond listing
Zopa Bank has raised £80m in its first-ever London Stock Exchange bond listing as it gears up to launch current accounts.
The fintech will transfer to an unlisted public company within six months following the transaction as it inches closer to the possibility of a float on the LSE.
The oversubscribed fundraise was completed on the International Securities Market (ISM) of the London Stock Exchange.
The Additional Tier 1 (AT1) capital raise lets the company boost its financial strength by selling special bonds that can absorb losses in difficult periods.
This follows a period of rapid acceleration for the lender, where pre-tax profit doubled to £34.2m in the 2024 financial year. The firm has also set out plans to double its office foot print in a move to canary wharf.
Revenue grew 30.2 per cent to £303.4m. This was driven by an over 60 per cent surge in its deposits base to £5.5bn.
Steve Hulme, Zopa’s finance boss, told Morning Wire: “Our latest capital raise is another strong vote of confidence in Zopa’s momentum and model.
“Following a successful equity round just six months ago, this non-dilutive capital strengthens our balance sheet and positions us firmly on the starting line for our bank account launch.”
Treasury makes play for fintech IPOs
Zopa’s fundraise follows reports on Tuesday the Treasury was courting fintech unicorns in a bid to boost listings.
Emma Reynolds, economic secretary to the Treasury, met with bosses from ClearScore, Monzo, OakNorth and Revolut.
Zopa’s cash raise comes amid a turbulent period for the London Stock Exchange. Revolut’s boss Nik Storonsky had previously blasted the exchange for its lack of liquidity compared to the US.
But, Zopa’s fresh capital fundraise indicates an investor appetite for fintech.
Hulme reiterated a listing was not a priority or imminent plan for Zopa, but described London as the logical choice.
Jaidev Janardana, chief executive at Zopa Bank, previously told Morning Wire: “We do not have a timeline. We’re just really focussed on building the business.”
Zopa struck a deal with Britain’s electricity supplier, Octopus Energy, to enter the UK’s £23bn renewable energy market in 2024 and joined retail giant John Lewis to offer personal loans to its 23m customers.
Hulme said partnerships would continue to be a crucial part of the fintech’s operations as they entered a new period of “rapid acceleration”.