P2P lending pioneer Zopa has raised more than $57 million in funding (£44 million) to support the launch of its challenger bank. The financing represents the first part of its current fundraising round, according to a post at the company blog, and comes amid reported strong growth for the sector and the company – including full-year profitability in Zopa’s P2P business in 2017.
The company’s intention to join the challenger bank revolution was signaled when it applied for a banking license in 2016. With growing concern from regulatory authorities such as the Financial Conduct Authority over the appropriateness of loan-based crowdfunding and P2P lending as an investment for average investors, adding retail deposits via a challenger bank would provide additional funding support for Zopa’s operations.
And while the bank would be initially limited to savings products like deposit accounts, Zopa expects credit and unsecured debt products to follow soon thereafter. “We aim to be the best place for money in the U.K. and we believe that launching our bank is a key next step,” Zopa CEO Jaidev Janardana said. “It allows us to offer a wider choice of products and to help our customers make smarter choices with their money.”
Named to the Financial Times’ FT 1000 list of Europe’s fastest growing companies, Zopa announced a major milestone in February, when its investor community lent its three billionth pound to U.K. customers. Re-opening to new investors at the beginning of the year, Zopa also started 2018 by beefing up its executive ranks. The company added new Chief Financial Officer, Steve Hulme; Chief Risk Officer, Phillip Dransfield; and Chief Customer Officer, Clare Gambardella.
London, U.K.-based Zopa has now raised a total of more than $169 million in funding. The company’s investors include Bessemer Venture Partners, Northzone, Augmentum Capital, and Wadhawan Global Capital. Zopa is one of Finovate’s earliest alums, having demonstrated its platform at FinovateSpring 2008.