Digital bank Zopa has raised £80 million in additional tier 1 capital from existing and new investors.

The funding follows a successful €80 million equity fundraise in November 2024.

The challenger, which has a full banking licence, said the investment will be used to strengthen its balance sheet without "diluting shareholders" as the bank prepares to enter everyday banking with launch of its flagship current account.

Following the transaction, Zopa Group will be re-registered as an unlisted, public company (PLC) within six months.

The move comes after Zopa doubled its full-year pre-tax profits to £34.2 million in its most recent financial year.

The online bank recently partnered with Britain’s largest 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.

Zopa, which currently has 1.3 million UK customers, achieved its first full year of profitability in 2023, swinging to a pre-tax profit of £15.8 million.

“Our latest capital raise is another strong vote of confidence in Zopa’s momentum and model," said Steve Hulme, chief financial officer, Zopa Bank. "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."

Since its launch in 2020, Zopa has attracted £5.5 billion in deposits, with the company currently holding just over £3 billion loans on balance sheet.

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