Augmentum Fintech has announced its plans to conduct a placing of new ordinary shares to raise £28m for future investments.
The Zopa backer, which is the UK’s only publicly-listed fintech investment company, has also launched a retail offer which will allow retail investors to participate in this equity fundraising alongside its institutional investors.
Retail shares will be offered on a ‘first come, first served’ basis, and the offer will close at 5pm on Thursday 29 October.
The retail offer is available commission-free through the PrimaryBid platform and mobile app.
Augmentum expects to raise approximately £28m through the retail offer and new share placing, which will be used to “fund investments selected from the company’s near-term qualified pipeline”, according to a company statement.
Augmentum’s existing portfolio includes an allocation of 5.8 per cent to peer-to-peer lending platform Zopa, as well as a 5.4 per cent allocation to European business lender Iwoca.
In a recent market filing, Augmentum admitted that Iwoca’s business had suffered due to the bounce back loan scheme, which “significantly reduced demand for Iwoca’s Flexi-Loan leading to lower than expected revenues.”
However, it noted that Zopa has “successfully” launched a new bank with a fixed term savings product and a credit card since the start of 2020. Augmentum also highlighted that “demand has returned for unsecured personal loans, the core of Zopa’s current lending business.”
“The combination of new product growth and the resurgence of demand in its core category means that Zopa is now adding more new customers per month than pre-Covid, albeit still early days for the “new strategy,” Augmentum added.
“With more than £5bn lent in personal loans since inception, and £1bn in 2019 alone, Zopa’s P2P business has been profitable since 2016. The new bank leverages Zopa’s strong lending track record, management experience, data, technology and people to create a multi-product offering.”
Augmentum’s portfolio consists of 18 private fintech companies which are “built upon innovative technologies and are overhead-light, with lean and efficient operations.”
“The trend towards a digital economy has accelerated as a result of the change in life and work routines over the past year,” said Neil England, chairman of Augmentum Fintech
“The fintech sector has been a beneficiary of this acceleration. Augmentum is unique as a fintech specialist with a closed end structure offering patient capital to companies as they scale-up.
“We are well positioned in the sector with strong access to dealflow and our near term pipeline continues to grow. We believe there are further opportunities for the company to deliver attractive returns for its shareholders.”