Peer to peer lending platform Zopa raised £140 million, the company’s largest funding round since launch.
According to a note from Zopa, the additional capital will enable Zopa’s banking entity to “fulfill its regulatory capital requirements.” This is key to removing its current restrictions on its bank license. Zopa reports that the investment is subject to final approvals, including regulatory change of control.
Zopa adds that it continues to hold its banking license, with restrictions, and is working with the regulator to obtain its full licence.
The investment is from IAG Silverstripe, an investment arm of IAG Capital, the private investment group specialising in digital and technology-led businesses. IAG Silverstripe is currently a minority investor in Zopa.
Jaidev Janardana, Zopa CEO, issued the following statement:
“This new funding means we have concluded the fundraising phase of our bank mobilisation. Definitive agreements to provide the funding have been finalised and are subject to final approvals including regulatory change of control. We continue to hold our bank licence with restrictions and are working closely with the regulators to gain our full licence. We are excited that that once approved, Zopa will be able to launch its bank alongside its peer-to-peer business and offer a broader set of products to our customers.”
Since launch in 2005, Zopa has lent £5 billion in unsecured personal loans to customers in the UK. Zopa was the first P2P lender to launch in the UK thus helping to trailblaze the sector of Fintech.
By moving into banking, Zopa will be able to provide a far broader portfolio of services while continuing to grow its online lending vertical.
Zopa plans to launch a “next generation bank,” that makes people feel good about money, providing simple, fair products that are easy to manage and using its tech know-how to provide a bank that’s fit for the future. The UK is the leading market for digital challenger banks and Zopa will need to compete with established names like N26, Monzo and Revolut.