The lending platform posted losses of £4.2mln for the year ended 31 December 2017, down from £6.5mln a year ago, as it invested in technology for its financial services division.
Zopa is currently pursuing a banking licence for its financial services arm after which it plans to offer savings and credit products to consumers.
Revenue for the year increased 40% to £46.5mln from £33.2mln a year ago, although it marked a slowdown from the 60% growth posted in 2016.
Its peer-to-peer lending business generated profit after tax of £1.5mln, the first time the division has achieved profits since 2012, on the back of efforts aimed at increasing new customer numbers.
The company said revenue growth reflected a 43% increase in loan origination to £1bn and the generation of inter-group revenue.
"Consumer demand for credit continues to be healthy, and consumers continue to shift towards digital channels, with more of them looking for alternatives to their banks on comparison sites," Zopa said.
"The company benefits from this trend owing to its strong digital offering and seamless loan application process."
Zopa closed a fundraising round of £44mln from undisclosed investors earlier this year. The financial results showed the proceeds were used to build its digital bank.
Rival Funding Circle had a rough start to trading on the London Stock Exchange earlier this week.
Despite setting its flotation price at the lower end of its indicated range, at 440p, the fintech firm’s shares have since fallen to 340p at the time of writing.