Digital bank Zopa has reportedly raised £80 million in Additional Tier 1 (AT1) capital from existing and new investors ahead of a period of growth.
According to the announcement from UK‘s digital bank Zopa It follows a EUR 80 million equity fundraise “executed 6 months ago, in November 2024.”
The funds will be used to strengthen Zopa’s balance sheet without diluting shareholders as the bank “prepares to enter everyday banking with the imminent launch of its flagship current account.”
The transaction was completed on the International Securities Market (ISM) of the London Stock Exchange and was “oversubscribed by over two times from 20+ investors.”
Following the transaction, Zopa Group Limited will “be re-registered as an unlisted, public company (PLC) within 6 months.”
The ISM delivers access to high-quality issuers, robust transparency standards, and “the credibility of a London-listed bond—all in a market designed for institutional needs.”
Most recently Zopa Bank doubled (2x) its “full year profits before tax to £34.2 million for the financial year ending 31 Dec 2024 on a 30.2% revenue jump, underscoring its trajectory since launching in 2020.”
Some of Zopa’s interesting innovations to date “enable customers to improve their financial health, gain access to better priced credit, and to benefit from saving products.”
It partnered with Britain’s electricity supplier Octopus Energy to “enter the UK’s £23 billion renewable energy market, and with the retail giant John Lewis to offer personal loans directly to its 23 million customers.”
Steve Hulme, CFO at Zopa Bank said:
“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. With profits doubling, strategic partnerships scaling, and innovation firing on all cylinders we’re not just gaining speed—we’re shifting gears to become the go-to bank providing unmatched ease and value to millions of Britons”.
With profitable growth, Zopa Bank is soon set to launch the Zopa Bank Account, its current account.
Since launching its bank in 2020, Zopa has attracted “£5.5 billion in deposits and currently has just over £3 billion loans on balance sheet.”
Unlike various other fintechs or e-money institutions, Zopa holds a full banking license, ensuring it “adheres to the same regulatory standards as traditional banks.”
Customers’ deposits are safeguarded “by the Financial Services Compensation Scheme (FSCS), protecting up to £85,000 per account.”
Jefferies acted as Structuring Adviser and Sole Lead Manager to Zopa on the transaction.
Founded in 2020 with a full banking licence and backed by some of Silicon Valley’s investors, digital bank Zopa is building the “Home of Money.”
This is a place where financial products deliver value and “managing money is made effortless; deep and long-lasting relationships mean customers are left confident about their choices.”
Zopa blends the agility of digital banking with “20 years of lending expertise – having lent more than £13 billion to consumers in the UK to date.”
It is said to be as “reliable” as a big bank, as helpful as “a challenger bank but with more peace of mind than both.”
Zopa Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.