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U.K. neobank Zopa raises £75 million

Illustration of a handshake forming part of the Union Jack.

Illustration: Shoshana Gordon/Axios

U.K. neobank Zopa has raised £75 million in debt financing from IAG SilverStripe.

Why it matters: Late-stage fintechs are increasingly opting for debt as an alternative to equity.

Context: The Tier 2 capital fundraise follows a £75 million all-equity financing deal — also led by IAG SilverStripe — announced in February.

  • Altogether, the company has raised £530 million from investors that include SoftBank, Augmentum Fintech, Northzone Ventures, Volution Ventures, Chimera Capital Management, Davidson Kempner and Silverstripe Investment Management.

By the numbers: Zopa Bank, which launched in 2020, now touts 1 million customers and an annualized revenue run rate of £250 million.

  • The company claims £3.5 billion in deposits and more than £2 billion of loans on its balance sheet and says it has issued 470,000 credit cards.

What they're saying: "Today's financing is a clear market validation of Zopa Bank's financial performance, pointing to strong investor confidence in its growth and in its ability to deliver strong financial performance despite the economic uncertainty," CEO Jaidev Janardana said in a statement.

  • "As 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's best bank," he says.
  • Zopa expects to hit full-year profitability for the first time in 2023.
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