In 2021, UK neobank Zopa, which has been around since 2004, jumped to a $1 billion valuation on the back of a big investment from SoftBank and a plan to go public in 2022. Now it’s 2023, and Zopa today announced another fundraising of a different kind as it continues to wait for the IPO markets to reopen.
The startup has raised £75 million ($93 million), a debt collection plan that will be used to increase its finances, look at some acquisitions and continue to develop more products with loans. , savings and deposits, BNPL and other services used by. 1 million of its customers.
The funding is led by IAG Silverstripe with participation from other investors, and it comes about seven months after the startup raised an equity tranche, also worth £75 million, led by the same backer. It has raised £530 million to date.
Many startups looking for new equity investors may still feel the chill of the funding winter, but things continue to heat up in the world of debt. A report from earlier this year said that debt, as of May, had just tipped (50.5%) to be the largest source of funding for startups and was generally in a stronger growth curve than equity based funds.
Some may choose debt as a faster way to secure financing, or as a way to secure money without giving up equity.
Zopa is leaning on one of the other common reasons: it has already generated money and it is growing, so it has a strong case for paying whatever it wants to get from the line of credit. It is now ebitda positive and said it is on track to make a full-year profit for the first time this year.
Specifically, the company said it is now on track to make £250 million ($312 million) this year at an annualized run rate.
There are no forward plans for launching services outside the UK
“There’s a lot of opportunity in the UK right now without having to go international in the near term,” Jaidev Janardana, the CEO, said in an interview. The company has launched two new products this year – a BNPL service and a long-term savings account popular in the UK called an ISA – and Janardana said the plan is to launch two more next year. year as it continues to wait for the IPO to heat waters. upwards.
