The Zip Co Ltd (ASX: Z1P) share price has started the week in the red.
In morning trade the payments company's shares are trading 3.5% lower at $3.78.
This follows the successful completion of its placement to institutional, sophisticated, and professional investors.
What did Zip Co raise?
This morning Zip Co announced that it has received firm commitments to raise $60 million before costs via a placement of 16,216,216 ordinary shares.
This was $10 million more than the previously announced placement target of $50 million. Management explained that it decided to increase the placement size in response to significant investor demand.
These funds were raised at $3.70 per share. This represents a 5.6% discount to the last close price and a 4.7% discount to its 10-day volume weighted average price.
Zip's Managing Director and CEO, Larry Diamond, was pleased with the outcome of the placement.
He said: "We are grateful for the support of many existing shareholders that participated in the successful Placement, together with a number of new shareholders that have joined our register, as we strive towards our mission of becoming the first payment choice everywhere and every day."
"The additional equity capital will support the launch and growth of Zip's UK operations, the roll-out of Zip Biz, increased investment in product, technology and data sciences as well as strengthening the Company's balance sheet – helping us to continue delivering outstanding results for our shareholders," he added.
Share purchase plan.
Zip Co will now push ahead with its share purchase plan to raise a further $10 million.
Eligible shareholders will be given the opportunity to subscribe for up to $27,000 of shares at the same price of $3.70 per share.
As with its placement, management advised that it may increase this cap and accept oversubscriptions. It may also scale back applications if it sees a need.
Also trading lower today is the Afterpay Touch Group Ltd (ASX: APT). Weekend media reports around surcharges being added to buy now pay later providers could be weighing on its shares today.
