Zip Co raises another $120m to fund overseas growth

Zip Co (ASX:Z1P) shares are up this morning after the fintech completed a fully unwritten placement, raising $120 million to fund its overseas growth in a sign the buy now, pay later sector shows no sign of cooling off.

The oversubscribed placement was underwritten by Merrill Lynch Equities with support by Shaw and Partners. The 22.5 million shares were issued at $5.34 per share, a 4.1 per cent discount to Wednesday’s closing price.

It’s the second capital raising in seven months for Zip, which issued $100 million in convertible notes earlier this year to fund its acquisition of QuadPay.

Zip’s retail shareholders will also have the option to subscribe for up to $30,000 of Zip shares to raise up to $30 million as part of the capital raising.

“The additional capital will enable Zip to capitalise on the successful acquisition of QuadPay in the US, scale Zip’s operations in the UK, lead the active pursuit of global growth opportunities and support the launch of Zip Business,” chief executive Larry Diamond said.

At 10.24am, Z1P shares were up 4.3 per cent to a two week high of $5.81.