Zopa is reportedly on the cusp of agreeing a £130m cash injection that will help the peer-to-peer lending giant meet regulatory capital requirements.
The fintech firm is in advanced talks to secure a major lifeline with an entity connected to US-based private investment firm IAG Capital Partners and its UK arm Silverstripe.
Over the weekend sources told Sky News, which first reported the deal, that an agreement was expected to be inked at the start of this week, coming days before Zopa’s banking licence-with-restrictions expires a year on from being granted.
Read more: Zopa makes banking debut as pressure mounts
Insiders told the broadcaster that the funding was negotiated at a steep discount to Zopa’s most recent capital-raising in 2018.
The move, which would reportedly give IAG Capital a majority stake in Zopa, would help the fintech group in its goal of becoming a challenger in Britain’s banking sector.
The scramble for funding at Zopa, which allows lenders and borrowers to deal directly with one another, comes amid increasing investor caution over the “P2P” industry.
The value of Funding Circle’s shares has crashed more than 70 per cent since it listed with a £1.5bn valuation last year.
In July Funding Circle said an “uncertain economic environment” had damaged demand for loans and warned that revenues would grow by 20 per cent this year, marking a drop from 40 per cent in its previous forecast.
Zopa declined to comment.