Fintech Firm Zopa Bank Completes Its First-Ever Bond Listing, Raising £80 Million
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Zopa Bank has announced that it has completed its first-ever bond listing on the London Stock Exchange (LSE). The bank noted that it generated £80 million from the listing, as it prepares to launch its current accounts for users.
The fintech firm also revealed that after the completion of the transaction, it will move to an unlisted public company within six months. The platform is also planning a float on the London Stock Exchange.
The London Stock Exchange Faces Backlash Due To Its Lack Of Liquidity
Zopa’s fundraising is coming after reports emerged that the Treasury wants to boost listing by courting fintechs unicorns. Economic secretary to the Treasury, Emma Reynolds, has met with the bosses of Revolut, OakNorth, and ClearScore as it continues to seek more participation from financial technology firms.
Zopa’s cash fundraise is also coming when the London Stock Exchange is facing a turbulent time. The London Stock Exchange has been experiencing a stormy period amid dissatisfaction from some firms regarding its liquidity issues.
Nik Storonsky, Revolut’s Chief Executive Officer, had previously called out the exchange for its lack of liquidity when compared to the US. However, the additional capital fundraising by Zopa is an indication that more financial technology firms are having more appetite in the market.
Zopa Strengthens Its Financial Capabilities
The fundraising was oversubscribed, and the deal was done on the International Securities Market (ISM) of the LSE.
Additionally, the extra funding will enable the firm to strengthen its financial capabilities as it sells social bonds that can caution against losses in unstable market periods.
The funding is coming at a time when Zopa is experiencing an impressive upsurge in client numbers and revenues. The fintech lender reported a pre-tax profit of £34.2 million in the 2024 financial year. This represents a 100% increase from the figures for the previous financial year. The platform is also planning to expand its presence to other markets to meet increased user demand.
The bank said the revenue increase was driven by an over 50% surge in its deposit base to £5.5 billion. Zopa’s finance boss, Steve Hulme, commented on the recent development.
“Our latest capital raise is another strong vote of confidence in Zopa’s momentum and mode, he said.
The firm also completed a successful equity round in the fourth quarter of 2024. This capital and the recent funding addition will strengthen the firm’s push to maintain a robust platform. Hulme added that the non-dilutive capital strengthens the firm’s balance sheet, positioning it firmly to successfully launch its bank accounts.
