Zopa raises 75 million pounds in a debt fundraise amid a funding winter

Zopa, a UK-based neobank, has raised 75 million pounds ($93 million) in a recent debt fundraise. Amid the ongoing funding winter, more startups are opting for debt funding rather than equity-based funding. Having hit the mark of 1 million customers, Zopa seeks to use the amount to fund more acquisitions, launch more products, and shore up its finances.

Zopa’s debt fundraise

Zopa’s debt fundraise comes as it continues to anticipate an IPO. The neobank, which was launched in 2004, expected to go public by 2022. This is after the big investment from SoftBank in 2021 that had its value rise to $1 billion.

The fundraise in question has been led by IAG SilverStripe with other investors as participants. Earlier in the year, the same company backed Zopa’s equity tranche of 75 million pounds. Since its launch, it has secured 530 million pounds.

Notably, Zopa’s focus is on the UK. In fact, it doesn’t have plans to expand beyond this region at least in the short term.

In an interview, Zopa’s CEO, Jaidev Janardana stated, “There is so much opportunity in the UK today that we don’t need to go international in the near term”. Since the beginning of the year, the company has launched two more products in the UK; a BNPL service and long-term savings account. While it continues to anticipate an IPO, it has plans to introduce two more offerings in the next year.

After reporting a deficit of 34.2 million pounds for the full year in 2021, it cut its losses after tax to 26 million in 2022. It also saw its total operating income grow by 131% to 151 million pounds. Amid the positive momentum, it is confident that it’s on track to report full-year profitability in 2023.