UK’s Digital Bank Zopa Acquires BNPL DivideBuy in 2023 Embedded Finance Push

Zopa has announced the acquisition of buy now – pay later (BNPL) platform  DivideBuy. Terms of the transaction were not immediately available. Zopa recently raised £75 million as it gears up for the possibility of more acquisitions.

The acquisition is expected to complete in the next few months.

Embedded finance is “a $7.2 trillion opportunity globally,” according to Dealroom. The deal is expected “to increase Zopa’s revenue by at least 20% in the next few years.”

This move is “a response to the consumer need to simplify their finances.”

Together, Zopa and DivideBuy will “bring a simple and fair solution for larger purchases (£250 – £30,000) that may otherwise take a customer months or years to save for.”

The BNPL 2.0 offering will “combine technology and fintech innovation to enable instant decisions and fully integrated consumer journeys with consumer protection, credit checks and safeguards of a regulated bank.”

Zopa’s BNPL 2.0 lending will aim to:

  • Only offer affordable credit by running credit checks and affordability assessments for all customers
  • Share data with credit rating agencies (CRAs) to give other lenders a full picture of people’s debt positions
  • Help customers to better consolidate, structure and pay down their debt using its proprietary tools
  • Enable users to build their credit profiles and improve their financial positions

Jaidev Janardana, CEO at Zopa, said:

“This acquisition helps us bring to life BNPL 2.0, an evolution of BNPL which we believe delivers the easy, integrated product which customers love whilst also addressing some of the issues around affordability and responsible lending which have plagued the sector. We are proud to be entering the POS space with DivideBuy, a market-leader with a standout product and technology stack, and a culture that is closely aligned to our values of fairness and customer centricity.”

As noted in the update

“Combining DivideBuy’s POS financing solution with Zopa’s best-in-class underwriting capabilities, regulatory permissions, and access to funding will enable digital-first journeys that bring new value to merchants and consistently delight customers. We are thrilled to welcome DivideBuy into the Zopa family.”

With DivideBuy, merchants can “offer their customers interest-free payment options at checkout.”

Shoppers can “spread the cost of their purchases over a 2-12-month period with over 400 merchants.”

The application process “is quick and easy, giving an instant credit decision without hidden fees or early repayment penalties.”

Some of the UK’s major consumer brands like Emma, Simba, Swyft, and Nectar already use DivideBuy “to offer customers more payment options and drive better outcomes for both them and their customers.”

Robert Flowers, CEO at DivideBuy said:

“We were delighted to be approached by Zopa in its search for a POS finance provider to support its vision of building Britain’s best bank. DivideBuy’s product, technology and culture align perfectly with Zopa’s values and brand strength, making this an ideal fit for the future of lending. Our LendTech solution will enable Zopa to leverage its core lending capabilities and build a market-leading POS finance solution.

As mentioned in the announcement:

“DivideBuy’s mission has always been to help make life more affordable. This deal with Zopa will bolster our current product suite to help us take POS finance further, faster – with ethical lending at the core. This approach will ensure we meet upcoming regulation head-on to deliver a BNPL 2.0 that’s better for everyone. We’re particularly excited for our people. Zopa and DivideBuy share a strong people-focused culture, and we’re committed to empowering our collective teams with new upskilling and career opportunities. We look forward to the next chapter of growth as part of the Zopa Group.”

Since launching in 2020, Zopa bank has “attracted £3 billion in deposits, more than £2bn of loans on balance sheet, and issued close to 400,000 credit cards.”


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