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News

Zopa raises GBP 75 million to accelerate growth

Friday 8 September 2023 12:12 CET | News

Zopa, a digital bank, has raised GBP 75 million in Tier 2 capital, aiming to further accelerate its mission of growth. 

According to the press release, this funding will be used to fuel Zopa’s growth and expansion. It brings the total capital raised by Zopa Bank to GBP 530 million, with GBP 150 million raised in 2023 alone. 

Zopa Bank’s capabilities enable customers to improve their financial health, gain access to better priced credit, access saving products, and transfer card balances in a way that helps pay down credit, faster. 

Its underwriting models use AI and machine learning algorithms that have been optimised over the last eight years, helping Zopa in its mission to deliver stable and improved credit performance through these uncertain times. 

Zopa, a digital bank, has raised GBP 75 million in Tier 2 capital, aiming to further accelerate its mission of growth.

Zopa Bank's strategy  

As per the press release, Zopa Bank draws on from both digital and legacy banks, combining its digital capabilities with several years of lending experience and GBP 8 billion in personal loans approved. 

With its banking licence, Zopa is held to the same standards as major high-street banks in terms of how customers are safeguarded. For instance, its deposits are protected by the Financial Services Compensation Scheme (FSCS) up to GBP 85,000. 

In 2023, Zopa Bank developed a regulated BNPL product which offers a responsible alternative to existing providers, and the Smart ISA which allows savers to keep more of their hard-earned returns. 

Moreover, since launching in 2020, the bank has attracted GBP 3.5 billion in deposits, more than GBP 2 billion in loans on its balance sheet, and issued 470,000 credit cards. Building on its foundations, today Zopa Bank has 1 million customers generating an annualised revenue run rate of GBP 250 million and is expected to serve 5 million customers by 2027. 

Zopa Bank's recent development 

In February 2023, Zopa announced it secured GBP 75 million in funding from existing investors to accelerate growth and explore potential mergers and acquisitions. The deal was believed to help cement and enhance the bank’s unicorn status. Having hit a valuation of USD 1 billion in 2021, the company has since been on a journey to reach profitability which happened within 21 months of the bank having been awarded a banking licence and exited the peer-to-peer lending space. 

In February 2023, Zopa announced its decision to acquire DivideBuy’s POS finance technology and lending platform. The deal was focused on offering customers and companies a sustainable Buy Now, Pay Later suite of services. The `BNPL 2.0` is set to combine multiple tools and solutions, which will use efficient fintech technology. The product would enable customers to make instant decisions as well as be fully protected from online threats. Furthermore, clients would also be able to make credit checks and safeguards of a regulated bank while using this service. 

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Keywords: funding, expansion, digital banking, investment, financial services
Categories: Banking & Fintech
Companies: Accel, Arc, BSP, Capital, epay, Further, ING, ION, Target, Zopa
Countries: United Kingdom
This article is part of category

Banking & Fintech

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Accel

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Arc

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BSP

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Capital

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epay

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Further

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ING

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Target

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Zopa

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